The Debt Management Industry is to come under the scrutiny of the Office of Fair Trading. The announcement, made in November 2009, means a potential shake up for the so far unregulated industry.
It will be the first review of its kind since 2003 in an industry that has seen massive growth and change in the past six years. There has been a huge increase in internet based companies and a massive shift in emphasis onto online advertising. Given that the industry is not yet regulated by the Ministry of Justice (something that is widely anticipated to change in the near future), there is concern about the level of compliance to the OFT minimum standards.
The industry review will give debt management companies an opportunity to answer a questionnaire relating to their practices, advertising and overall service provided. The Office of Fair Trading will also consult with a number of debt charities on their view of debt management company compliance with the minimum standards set. Consumers will have the chance to have their say too, through a feedback form on the Office of Fair Trading website.
This review follows 24 companies having action taken against them by the OFT, including the revocation of credit licences, since April 2008.
It is hoped that the review will lead to an increase in standards across the entire industry, for both the creditors and consumers.
While the industry remains unregulated, there are organisations, such as the Debt Resolution Forum, promoting higher standards across the debt management sector. It is widely thought, however, that the result of an ongoing Ministry of Justice Consultation over debt management will mean that the industry is soon to become regulated.