June 2011

Upfront Fees For Loan Introductions – Know Your Rights

Debt Advice Foundation was one of two not-for-profit organisations/charities consulted by the OFT as part of its review of promoting and charging upfront fees for loans in what is known as the sub-prime market. Other organisations consulted included government departments and consumer bodies such as Which? and Citizens Advice.

Charity Supports All Party Parliamentary Group

Debt Advice Foundation has become a registered supporter of the All Party Parliamentary Group on Financial Education for Young People.

The group, which is chaired by Justin Tomlinson MP, aims to support schools in the delivery of financial capability and ensure young people are equipped to make informed financial decisions.

IMF Backs Government Deficit Reduction Policy

The IMF has come out in support of the Chancellor’s deficit reduction programme, although it did concede that the strategy carried with it significant risks to inflation and unemployment rates, both of which are key drivers of personal insolvency.  It said that whilst weak economic growth and rising inflation was “unexpected”, it believed this would be only temporary.

Debt Management Firms Withholding Debtor Payments

An investigation by the BBC has revealed that some debt management companies are withholding debtor payments rather than passing them through to their creditors, which they are mandated to do as part of the industry’s compliance code, the Office Of Fair Trading’s Debt Management Guidance. It is understood that the companies are keeping back the payments in order to accrue a settlement figure to offer to the creditors at a later date. However, in doing so, the client runs the risk of losing their money altogether if the company is wound up before any offer is made.