10 June 2015
The Money Advice Service and StepChange Debt Charity have today announced a new partnership to help people who may be affected by changes to the debt-management sector.
Following the transfer of consumer credit regulation to the FCA in April 2014, a number of debt management firms have left the market. Existing debt management firms are currently in the process of applying for authorisation from the FCA. During this process the FCA will check that firms meet its standards. While it is not known whether further firms may leave the market, the Money Advice Service has put in place a prudent contingency plan to help any affected clients who may otherwise be left without a debt management provider.
To ensure that those customers affected have access to impartial debt advice, the Money Advice Service is funding StepChange Debt Charity to set up a special service to provide free advice and support over the phone.
Those affected by any potential closures of debt-management firms are advised in the first instance to visit www.moneyadviceservice.org.uk/debt-management or call the dedicated Money Advice Service debt management helpline on 0300 330 2222.
Caroline Siarkiewicz, Head of the UK Debt Advice Programme for the Money Advice Service comments:
“We welcome the FCA’s increased scrutiny of debt management companies, bringing greater accountability, making sure all providers meet the same standards of advice delivery and protecting consumers.
“It is important that those customers whose debt management company leaves the market are able to access high quality, free debt advice to help them decide the best course of action and get their finances back on track.
“This is the first time we have worked in partnership with StepChange Debt Charity and we are pleased to be providing funding to deliver these vital additional debt advice services over the coming year.”
Mike O’Connor, Chief Executive of StepChange Debt Charity, said:
“We are delighted to be working in partnership with the Money Advice Service. Dealing with debt can be an extremely stressful and difficult time and it is essential that the people affected by firms leaving the market have somewhere to turn where they can get free and independent advice. This funding means that substantial extra advice and support will be available in the coming months.”
NOTES TO EDITORS
- The Money Advice Service business plan for 2015/16 has £3.8m set aside to support clients that may be impacted by greater scrutiny of debt-management providers. This will cover the costs of this project, the Money Advice Service’s own dedicated helpline and additional webchat services provided by Citizens Advice.
- StepChange Debt Charity will hire over 100 new advisers specifically to assist clients of commercial debt-management providers that exit the market
- Commercial debt-management providers had to submit applications for authorisation to the Financial Conduct Authority between 31 December 2014 and 31 March 2015. The FCA may take 12 months to determine an application, although most decisions are made considerably more quickly.
About the Money Advice Service
The Money Advice Service is an independent organisation. Set up by government to help people make the most of their money, it gives free, unbiased money advice across the UK – online, over the phone and face to face. Paid for by a statutory levy on the financial services industry, raised through the Financial Conduct Authority, its statutory objectives are to enhance the understanding & knowledge of members of the public about financial matters (including the UK financial system), and to enhance the ability of the public to manage their own financial affairs.
We work with partners to make debt advice easier and quicker to access, and to improve standards and quality across the sector. We are a major funder of free debt advice across the UK and have a statutory role to work with partners to improve the availability, quality and consistency of debt advice.
The Money Advice Service Press Office - 020 7943 0593
About StepChange Debt Charity
StepChange Debt Charity is the UK’s largest debt advice charity and it offers free and independent debt advice to people struggling with debt. Our vision is a society free from problem debt and we help people to repay their debts where they are able to do so. Where they cannot, we provide advice including where appropriate supporting them through insolvency processes. We help them recover from a financial crisis and avoid such problems in the future. The number of people helped by StepChange Debt Charity has increased by 80 per cent over the last three years.