Award-winning Manchester-based debt management company, The Debt Advisor, has been approved by the Approvals Committee headed up by Insolvency Service to undertake protocol compliant debt management plans (P-DMP).
Originally mooted by the Department for Business Innovation & Skills (BIS) in June 2012, the new plans seek to address the two main areas of concern regarding consumers in financial difficulty:
- That consumers do not always receive the most appropriate advice
- Fee charging debt management companies may not always provide debt solutions which are both sustainable and the most appropriate for the customer.
Officially announced by consumer affairs minister, Jo Swinson, earlier this year and launched today, the new protocol has been worked on for 12-18 months and finally agreed by both advisors and creditors. It will guarantee that consumers will not be charged any fees before signing a contract with a compliant company and will ensure that providers make plans more affordable and sustainable by spreading the recovery of their set-up fees over at least the first six months.
Managing director, Bev Budsworth said: “We are delighted that the approvals committee has sanctioned us to provide P-DMPS. It shows a real vote of confidence from them that all our systems are geared towards helping the customer clear their debts in 10 years.
“Of the 47 practices that are regulated by either DEMSA or DRF, only five have so far gained approval. Not all the regulated practices submitted their proposals for the first round of approvals. Those who did apply and did not gain approval will need to satisfy the approvals committee that they comply with the new guidelines at its next session.
“All practices who applied to offer P-DMPs had to undergo a strict audit to demonstrate how they would amend their systems and processes to ensure compliance with the new protocol. It’s fantastic news for us and is testament to the huge amount of effort that our team has put in over the past weeks and months.”
The P-DMP has been introduced to promote and protect the needs and best interests of customers who take out debt management plans and will also drive up standards in the much maligned debt management industry.
Bev concluded: “This new protocol will ensure that regulated companies who offer P-DMPs are subject to an annual audit where client’s accounts are checked, debt solution providers are mystery-shopped to combat mis-selling and, more generally, that the practice complies with all relevant rules and guidelines, including the ones for P-DMPs.
“Most importantly, it will ensure that those that choose a P-DMP will be assured of high standards of service that are demonstrably in their best interest.”