HC Deb 18 November 2003 vol 413 cc741-2W
Mr. Cousins

To ask the Secretary of State for Trade and Industry what plans she has for the statutory regulation of debt management companies. [139092]

Mr. Sutcliffe

Companies providing debt management services are required to be licensed under the Consumer Credit Act 1974. Under the Act the Chairman of the Office of Fair Trading (OFT) has a statutory duty to ensure applicants for a licence are fit to engage in the activities for which they are licensed.

In December 2001 the OFT issued guidelines to debt management companies to ensure they deal fairly and openly with consumers—the Debt Management Guidance (December 2001) OFT366. A copy of the guidance can be found in the Libraries of the House.

The guidance requires that companies offering debt management services should comply with the best practice identified in it. Where the OFT has evidence of practices breaching the guidelines they can take action to refuse or revoke the consumer credit licence, or take such other action as appropriate under other legislation (e.g. Unfair Terms in Consumer Contracts Regulations etc).

The Consumer Credit White Paper will set out Government measures for reform of the current licensing system in order to ensure it remains relevant in today's marketplace, enables consumers to make informed decisions through increasing transparency, and provides suitable enforcement measures to allow the OFT to deal with those companies who act in a manner inconsistent with the best practice laid out in the Act and Guidance.