Debt Advice Foundation responds to Government consultation on future of the Money Advice Service
In the March Budget, the Treasury announced that the Money Advice Service (MAS) is to be abolished.
The organisation has provided financial and debt advice to consumers since 2010 and will be replaced by a smaller advice body in 2018.
Debt Advice Foundation has responded to the Governments consultation on the future of the Money Advice Service, calling for the organisations free Debt Advice Locator Tool to remain when the new body comes into existence.
In the March Budget, the Treasury announced that the Money Advice Service (MAS) is to be abolished.
The organisation has provided financial and debt advice to consumers since 2010 and will be replaced by a smaller advice body in 2018.
Debt Advice Foundation has responded to the Governments consultation on the future of the Money Advice Service, calling for the organisations free Debt Advice Locator Tool to remain when the new body comes into existence.
David Rodger, CEO of Debt Advice Foundation said;
“MAS currently maintains an online register of credible, not-for-profit accredited organisations which enables consumers to access to free, tailored and good-quality advice. Without it, consumers with no prior knowledge of the sector cannot be expected to understand the differences between providers of debt advice and solutions. Hundreds of thousands of over-indebted borrowers have made use of the MAS Debt Locator Tool in the last year.
“As part of the accreditation process, firms are required to evidence that they provide advice of a good standard. The proposal to discard accreditation gives rise to concerns about the quality of the advice which might be offered to those people without clear guidance.
“Debt Advice Foundation believes that losing this central register of accredited agencies will lead to an increase in vulnerable, over-indebted borrowers flowing to the fee-charging sector and a commensurate increase in financial detriment, for example, a commercial debt management plan takes 17% longer on average to complete than a free plan provided by the not for profit sector, due to administration fees.
“MAS has made important headway in raising awareness of the free debt advice sector with both debtors and creditors. It would seem a backwards step to abandon the platform and undo this valuable work.
“It has been suggested that the new body will focus on digital tools. Online tools are already widely available in a number of locations on the internet and whilst Debt Advice Foundation feels that digital tools can be useful in assisting consumers in their financial knowledge, these types of tools are not a substitute for bespoke quality advice.”
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