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Citizens Advice responds to Debt and Personal Finance APPG

7 February 2012

Debt management companies

Gillian Guy, Chief Executive at national charity Citizens Advice said “Our evidence shows that consumers need greater protection from the serious ongoing failures in the fee-charging debt management market. In 2010/11 we dealt with over 3,000 enquiries involving such companies, many of which refused to observe cancellation rights, gave misleading information, poor advice and service, failed to deal with priority debts, and charged disproportionate and unclear fees.

We want to see a step-change in how this sector is overseen so that consumers are able to make better choices, are protected from unscrupulous firms entering the market and so that business practices are better supervised. We want to see measures taken to control the practice of unsolicited phone calls, texts and email marketing, and for up-front fees to be banned, or at least controlled.”

Payday loan industry

Gillian Guy, Chief Executive at national charity Citizens Advice said “As this industry grows, our evidence suggests that it’s consumers in long-term financial difficulty with other debts who are much more likely to take out a payday loan to try and deal with these problems.

We want payday lenders to ensure that people in financial difficulty are properly protected from a variety of unfair practices. For example, they must make sure borrowers can afford to pay back the loans without debts ballooning, and stop using harsh debt collection practices.

The Government must take urgent steps to ensure that regulation of debt management and payday loan services effectively protects financially vulnerable people from unmanageable debt.”

Notes to editors

  1. Anyone in debt should get free debt advice from their local Citizens Advice Bureaux as quickly as possible on how to sort out debts.
  2. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more information in England and Wales see www.citizensadvice.org.uk
  3. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality. For online advice and information see www.adviceguide.org.uk
  4. Citizens Advice Bureaux in England and Wales advised 2.1 million clients on 7.1 million problems from April 2010 to March 2011. For full 2010/2011 service statistics see: www.citizensadvice.org.uk/press_statistics
  5. Out of 22 national charities, the Citizens Advice service is ranked by the general public as being the most helpful, approachable, professional, informative, effective / cost effective, reputable and accountable. (nfpSynergy’s Brand Attributes survey, May 2010).
  6. Most Citizens Advice service staff are trained volunteers, working at around 3,300 service outlets across England and Wales.