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Annual Report 2008





During 2008 work has continued to ensure that the DEMSA Code of Conduct satisfies all the requirements of the Office of Fair Trading under the Consumer Codes Approval Scheme and following further submissions and a full round of monitoring of the members’ activities the Code was awarded full stage Approval on 5 November 2008.

DEMSA has an influential role in the debt management industry and its code is the first in the sector to be awarded OFT approval, reflecting a great deal of hard work and determination to ensure high levels of customer service within the sector.

The Code is a dynamic document and reflects fully up to date legislation, practices and consumer concerns and issues and will continue to be subject to ongoing review to ensure that it fully covers the relevant issues in the market place.

Following the achievement of Stage 2 approval DEMSA is aware that a number of debt managers, currently non members will be applying to join the association and thus become subject to the Code and its’ allied procedures. In all cases applicants are subject to a stringent series of checks to ensure that they are fully compliant with the terms of the Code and will be required to make any necessary changes to their procedures, practices and service proposition before they are accepted for membership. They, and existing members will continue to be subject to the Code and close monitoring of it through DEMSA.


Complaints handled by DEMSA

As is evident from the table below the level of complaints handled by DEMSA has continued to reduce with just 4 complaints being received and handled by DEMSA during 2008.

The 4 cases were as follows:

Service Issues – 2 complaints

Issues regarding formulation of a DMP – 1 complaint

Issues regarding withdrawal from a DMP – 1 complaint.

3 of the complaints were justified with the other complaint relating to a matter outside the control of the debt manager, being an error made by a creditor.

All complaints were satisfactorily resolved following the referral to DEMSA and in one case a refund payment of £370 was made, with and ex gratia payment of £50 being made in one other case.

The trend of complaints against DEMSA members over the last 6 years is summarised below.

2003 2004 2005 2006 2007 2008
Number of complaints 16 14 8 11 9 4
Service Issues 11 8 5 9 5 2
Formulation errors 1 2 0 0 1 1
Withdrawal from a DMP 2 3 2 2 3 1
Amounts Disputed 2 1 1 0 0 0
Refunds Made (£) 885 1220 1093 1938 786 370
Ex Gratia Payments Made (£) 1700 1350 480 740 300 50

All DEMSA members are aware of and offer to their customers the services of the Financial Ombudsman and consumers have the right to use this service if they so wish. In the event of a complaint referred to DEMSA not being resolved to the consumers’ satisfaction, they have the right to invoke the FOS service.


Compliance and Disciplinary Procedures are in place, which give strength to the Code by their structured, binding and independent approach.

An independent panel is in place to consider any actual or potential breaches of the Code and to decide on any disciplinary action, which may need to be taken.

The panel is convened on notice of a potential breach of the Code from any of the following sources:

  1. A Consumer Complaint
  2. As a result of a Compliance Audit
  3. As a result of information received from any other form of monitoring of the Code undertaken by DEMSA, which includes Customer Satisfaction Surveys.
  4. A complaint from another member
  5. A complaint from another source, including lenders and other consumer bodies.

During the year under review it was necessary to take action against 2 members for perceived breaches of the Code. One was in respect of an error by a member in the licensing of their business, which was remedied, and the other resulted in the termination of membership of one company, due to non compliance with DEMSA membership regulations.


Monitoring of the adherence of members to the Code of Conduct is an important aspect of ensuring that the effectiveness of the Code is properly tested and shown to be sufficiently robust to ensure the required level of consumer protection.

Monitoring takes place by:

Web Sweeps and Desk Top Analysis

On a regular basis close checks are carried out to ensure that all members’ websites, advertising and promotional literature is fully compliant with the Code and is consistent across all areas of media.

Compliance Audits

Audits are carried out on an annual basis, in accordance with a pre-defined agenda, which covers the areas covered by the Code, including:

  • Marketing, promotions and advertising
  • Pre-Contract Activity
  • Contract Terms
  • Payments and Money Handling
  • Contact with Consumers and Advice
  • Business Status, Practices and Procedures
  • Skills, Knowledge and Experience
  • Core Criteria relating to Consumer Codes Approval Scheme

In addition a Customer Interface Audit is conducted which covers:

  • Understanding of Debt Management Programme
  • Adequacy of Information provided
  • Costs and Estimates
  • High Pressure Selling
  • Cancellation Rights
  • Awareness of DEMSA Code of Conduct
  • IVA Issues

In the series of audits conducted in 2008 the overall conclusion was that all DEMSA members were compliant with the DEMSA Code of Conduct and no serious transgressions were noted.

In addition, all DEMSA members were required to undergo the audit by the OFT of Consumer Credit Licence Credit Competence Plan.


The successful Consumer Satisfaction Survey has continued during 2008, with surveys being issued on a regular monthly basis, with responses being returned directly to DEMSA for assessment and collation.

During 2008 the survey was reviewed and certain amendments made and further questions added, and the scope of the survey was extended to those who had been on a plan longer than 12 months.

A weighted scoring system is in place, which gives priority to fundamental issues covered by the CSS, and this gives ratings from “Excellent” to “Poor”.


2005 2006 2007 2008
CSS Surveys Issued 691 2208 2411 2505
Responses Received 131 525 619 562
Response %age 19 24 26 22

The response rate remains above the targeted return rate of 20%


  2005 2006 2007 2008
  Number %age Number %age Number %age Number %age
Excellent 66 50 290 55 362 58 332 59
Good 29 22 133 25 141 23 117 21
Satisfactory 20 15 43 9 55 9 45 8
Below satisfactory 8 6 18 3 26 4 29 5
Poor 6 5 29 6 30 5 39 7
Spoiled 2 2 12 2 5 1    
Totals 131 100 525 100 619 100 562 100

A total of 88% gave a rating of satisfactory or above.