Why are we letting companies pretend to be debt advice charities online?

The Trust’s policy manager Meg van Rooyen highlights the issue of lead generation companies masquerading as free debt advice charities and what can be done to address the problem.

It is not just Martin Lewis having a problem with fake advertising.

If you try looking for free debt advice through an online search engine like Google, you will be lucky to find National Debtline, StepChange Debt Charity or Citizens Advice at the top of your search results. There are many companies out there using paid advertisements to give the misleading impression that they offer debt advice or to masquerade as free debt advice charities.

Google and the Google logo are registered trademarks of Google Inc., used with permission.

Google and the Google logo are registered trademarks of Google Inc., used with permission.

“Get expert debt help today”.  “Debt line help”.

“See if you can have 86% wiped off.”

“Step to change debt management.”

“Government debt write off UK.”

Even a search for the Money Advice Service brings up an advert inviting you to “wipe out your debts today” and find out within 2 minutes if you can write off up to 90% of your debts!”

People may be more susceptible to this type of messaging, which offers a quick solution to their debt issues, but it may lead them down a debt route unsuitable for their situation. When using an online search, it is crucial that the information people receive is accurate and unbiased.

A quick search on Google suggests this is currently not the case.

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Could the FCA have a role in the regulation of enforcement agencies?

shutterstock_254574685The Trust’s policy manager Meg van Rooyen explores one possibility for future regulation of enforcement agencies, as the advice sector’s Taking Control campaign for bailiff reform continues.

Reforms that came into effect in 2014 have seen some improvements for how enforcement agents (the new name for bailiffs) collect debts. The rules around entry have been clarified, the range of exempt goods widened, there is a clearer fee structure, the language has been modernised, with better signposting to sources of free debt advice.

However, as the sector’s Taking Control report showed, the reforms have not achieved their key objective: changing the behaviour of bailiffs and bailiff firms when dealing with vulnerable people in debt. We are pleased that the Ministry of Justice has listened, at least, to our continued concerns in announcing a new call for evidence on the impact of bailiff action on people in debt. However, these problems go beyond just a few rogue bailiffs – it is the system that needs reform.

That’s why we believe independent regulation and a free, independent complaints mechanism is crucial to bringing this about.

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A creditworthy approach from the FCA – but a bigger dilemma remains

cp17-27The Trust’s policy manager Meg van Rooyen considers the FCA’s recent consultation on creditworthiness, and the urgent need for public policy solution on affordable credit.

Today sees the close of the FCA’s consultation on its rules for assessing creditworthiness in consumer credit lending.

Here at the Trust, we have responded positively to the approach the FCA is taking in many ways. For instance, we support the regulator’s approach to clarifying the meaning of affordability and to make the definition explicit within the rules, and it is also welcome that the FCA is to make it clear within the rules that creditworthiness includes both the risk to the lender and affordability for the borrower.

There is a big dilemma here, however, for anyone who is concerned as we are about the huge problem of financial exclusion in the UK. There needs to be a balance between sensible requirements on lenders to assess affordability and the risk that more people on lower incomes will lose access to credit.

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Thoughts on the FCA’s credit card proposals

As this week’s Bank of England figures show, credit card balances continuing to surge, the Trust’s policy manager Meg van Rooyen reviews the Financial Conduct Authority’s new proposals on persistent debt and early intervention.

The latest lending figures from the Bank of England, out this week, show credit card balances are continuing to grow by half a billion pounds each month. With consumer credit across the board surging by 10 per cent a year, here at the Trust we continue to be concerned that many households are leaving themselves exposed to financial difficulty if their circumstances change.

Persistent credit card debt is a key feature of the UK’s household debt problem, with the FCA finding 1.6 million people repeatedly paying only the minimum payments on their credit cards.

In April 2017, the Financial Conduct Authority (FCA) made a series of proposals to address the issue of persistent credit card debt, as part of its overall package of remedies from its credit card market study.

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High hopes for the Goods Mortgage Bill – but the FCA should act now

shutterstock_258751613The Trust’s Policy Manager Meg van Rooyen looks at the new Goods Mortgage Bill included in the Queen’s Speech.

In an eventful few weeks at Westminster – to say the least – a new piece of legislation appeared in the Queen’s Speech designed to tackle a long-running cause for concern in the advice sector.

Why reform logbook loans?

Bills of sale are commonly used to secure a “logbook loan” on goods you already own, usually your car. This is a form of high-cost lending that has been a source of considerable problems and caused substantial consumer detriment. Based on legislation that dates back to the 19th century, bills of sale are an archaic lending vehicle with obscure and complex rules that has no place in a modern society. The lending products offered using bills of sale are both oppressive and enforced unfairly and the advice sector has repeatedly raised concerns about logbook loans. It seemed particularly unfair that people who have innocently bought a second hand car with no knowledge of an existing logbook loan attached to the car, can still lose the vehicle.

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