Call for personal debt sector reforms

Consumer debt advice organisation MoneyPlus is calling for further reforms in the personal debt advice sector.

Chris Davis, Chief Executive Officer at MoneyPlus, said “The country has now been in a cost-of-living crisis for more than two years and those who are struggling with debt need some reassurances that when the pressure is really on and they need debt advice, they have both choice and confidence in the support that is available from our sector. 

“Our view at MoneyPlus is that whether you’re a sole trader or a business of any size, if you’re providing debt advice, you must provide all personal debt related solutions. This means having the expertise, knowhow, and judgement to be able to help customers carefully navigate all FCA-regulated products and services. As things stand, there are still too many insolvency practices and debt management firms who offer customers just one or two debt management solutions, which in my mind creates a conflict that could and should be avoided.

“A key objective in addressing this issue, would be to reduce the high numbers of people who are reported to fail their IVAs according to the Insolvency Service. Nobody should be forced or misled into an IVA but unfortunately there are still some firms with bias on the products they offer because they’re incentivised to offer only one or two solutions.

“Although regulations now ban introducers from falsely advertising online, the practise of shoehorning customers into IVAs – when it’s not the right solution – is still happening. We’d like to see more rules put in place to protect the consumer on this issue and to ensure that when times are tough, they can have confidence in the choice and quality of debt management support that is available.”