- Only debt managers that meet DEMSA's OFT approved code will be allowed to appear on moneysupermarket.com
- moneysupermarket.com will offer a choice of free-sector, paid-for and self-help debt advice
This gives reassurance to users that the companies will adhere to a strict code of practice - an OFT Approved Code - in what is a largely unregulated industry. The government recently announced a consultation on the debt management industry, but regulation is unlikely soon.
DEMSA is the only debt management association whose code of practice has been approved by the Office of Fair Trading's Consumer Codes Approval Scheme (CCAS). CCAS aims to approve and promote business-to-consumer codes of practice which provide benefits to consumers that go beyond those currently provided by law. DEMSA regularly reviews member compliance with the code and reports the findings in its annual report.
There are hundreds of debt management companies in the UK, but consumers have no easy way of differentiating between firms which operate ethically and those which don't. By making the wrong choice, consumers who are already facing a difficult and stressful time can make their situation worse. DEMSA accreditation gives peace of mind to consumers as members have to adhere to strict guidelines to ensure they are fair to consumers.
Tim Moss, head of loans and debt at moneysupermarket.com, said: "For many people in financial difficulty the service provided by one of the free debt advice charities is ideal. However, some consumers prefer to use the services of a paid-for debt management company, who are able to offer a speedy and tailored service which meets their individual needs. Unfortunately, some companies in this field exploit the vulnerable. As a result we have been looking at ways to protect our users from the deeply unethical practices followed by some firms in the debt management industry. With the site only listing DEMSA members, our visitors can be ensured that the debt management company abides by a strict code of ethics, to ensure they are dealt with fairly.
"We have heard many horror stories of debt management companies on our forums, including some taking up to six payments from a customer before even contacting the customer's creditors. But there are some debt management companies who provide a genuinely positive service to those struggling with debt, and we intend to highlight only these to our customers.
"It really is a scandal that there is no regulation of the industry whatsoever. The government's recently announced consultation must reach a strong and quick conclusion that full regulation is needed. Enforcing OFT approved code standards may be a way forward."
Michael Land, chairman of DEMSA comments: "moneysupermarket.com is to be applauded for its concern to ensure that the highest standards of consumer protection are available through its website. By allowing only debt managers which are DEMSA approved on its site they are taking the right steps needed to clean up the industry and raise standards beyond those required by law ".
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