In their “Debt Management Guidance Compliance Review”, the OFT gave a damning report on the debt advice industry and found that many companies were failing to provide an adequate service to vulnerable customers.
The report identified that the OFT has told 129 debt management firms that they face losing their consumer credit licence if they do not take compliance action within the next 3 months.
In contrast, all DEMSA members were compliant with the OFT guidance and were singled out as having already addressed all issues raised.
The report also explains that the OFT are working with DEMSA to improve overall standards across the industry, following the increase in unregulated companies trying to capitalise amid the current financial climate.
During an interview on BBC Radio 5’s breakfast programme Nigel Cates, Deputy Director of Consumer Affairs at the OFT, explained that the commercial market had grown as a result of the increased number of people struggling with their finances.
As part of his summary on the report, he signposted customers to organisations providing “sound” advice, stating that DEMSA: “…is promoted by the OFT and they have the OFT Code, and we would recommend that if you are going to use a commercial debt management company always look for that membership.”
Michael Land, Chairman of DEMSA, said: “We’re glad that the hard work by DEMSA members, to ensure customers receive the highest standards of service, has been publicly recognised by the OFT and we look forward to continuing our work with the OFT to ensure standards across the industry can be improved further.”