Office of Fair Trading Consultation on Debt Management Guidance – ClearDebt Response

ClearDebt’s response to the Office of Fair Trading’s consultation on new debt management guidance.

We’ve published, below, ClearDebt’s response to the Office of Fair Trading’s just closed consultation on new guidance for debt management companies and charities.

Those of you who also read the Debt Resolution Forum’s (DRF) response will notice many similarities.

The two documents have been principally authored by the same people and the issues are, broadly, those on which most debt resolution companies would agree  (in the case of the DRF response, the views of members have been incorporated too).

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ClearDebt’s principal concerns lay in creating a level playing field between fee-charging and non fee-charging providers and also in the industry’s future freedom to market itself (ethically and transparently) on the internet. This topic is discussed in more detail in a recent article in the Daily Telegraph and in a response by our colleague and web marketing consultant, Paul Gailey which you can view here: Response to the OFT Debt Management Guidance.

The OFT consultation document can be found here.

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  1. I’m pleased to see Cleardebt challenging some of the propaganda and misinformation routinely put out about the fee-paying sector. As a small adjunct to that, Nick Pearson ( Paymex ) wrote earlier this year : “I have worked in both the free and fee-charging sectors at a senior level and have seen the data from lenders which is not in the public domain. On approx 93% plus of all debt handled by reputable ( commercial ) debt solutions providers all interest, charges and further action are suspended, a figure which is in excess of most free providers. Based on calculations I have done, the average person with average debt levels is actually better off paying a 2 months DI set up fee and monthly management fee as this is cheaper than the interest they will be charged if they go to a typical free debt advice provider who gets interest and charges frozen on approx 70% of debts. ”

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