DEMSA
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LS11 5SS

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Compliance and Discipline Panel Meeting – 6 October 2011

October 21, 2011 Comments Off

The Compliance and Discipline Panel met on 6 October 2011, under the Chairmanship of Sir Harry Ognall, to consider complaints regarding misleading statements, as set out in the notice below.

  1. A written undertaking to be given by Member X not to advertise, market or otherwise promote whether by bidding on line or in any other media form words that may be misleading to a consumer by conveying that Member X is a free-to-client organization. In particular and without derogation from any of the foregoing, not to use any of the following words or phrases:
    • Citizens Advice
    • Citizens Debt Advice
    • CCCS
    • Government Debt Help

    or any combination of the above.

  2. A warning that any further violation of the DEMSA Code of Conduct in these respects will place the company at serious risk either of suspension or of expulsion from DEMSA.
  3. A fine in the sum of £15,000 (Fifteen thousand pounds)
  4. A direction that the effect of the decision and the sanctions imposed be reported to the OFT
  5. An order that Member X pay the costs of the Panel hearing, not exceeding the sum of £5,000.

DEMSA APPOINTS ICAEW TO MONITOR DEBT ADVICE STANDARDS

October 20, 2011 Comments Off

The Debt Managers Standards Association (DEMSA) today announces a new agreement in principle which will see the Institute of Chartered Accountants in England & Wales (ICAEW) undertaking the monitoring of new and existing DEMSA members.

As part of the agreement, ICAEW will carry out initial assessment reviews and ongoing annual reviews to confirm prospective and existing members of DEMSA are adhering to and are compliant with the DEMSA Code of Conduct.

The Code of Conduct, which is approved by the OFT, sets guidelines for DEMSA members in areas such as compliance, customer service, marketing and communications, training and complaints handling. Members are expected to provide services of the highest standards in which the public and the credit industry can have confidence, and to provide a high level of protection to the consumer.

DEMSA has long been committed to raising standards across the fee charging debt advice sector. As well as working closely with the OFT to lead the drive towards higher standards, DEMSA recently introduced a more robust complaints mechanism for clients by appointing ex High Court judge, The Hon Sir Harry Ognall, DL to chair its Disciplinary Panel. DEMSA has also worked with the Institute of Money Advisers (IMA) on a new professional qualification in debt advice for advisers working in member firms.

Michael Land, Chairman of DEMSA commented: “All our new and existing members are already subject to a rigorous audit process however, we believe that by appointing the premier accountancy body in the UK we are further increasing consumer and industry trust in our members. As the principal trade body in the sector, DEMSA members are at all times required to provide informed, clear and appropriate advice and to manage their client affairs with which they are entrusted to the highest standards.”

David Blocksidge, Deputy Director in the OFT’s Consumer Credit Group said: “DEMSA has an OFT approved Code of Practice for its members to abide by and we welcome DEMSA’s approach to work with the ICAEW to help improve and maintain standards in the fee charging debt management sector.”
Vernon Soare, Executive Director, Professional Standards at ICAEW said: “ICAEW is widely recognised for its monitoring expertise across a number of important sectors. We are already actively involved in the personal debt solutions sector through our existing monitoring of our own members, a number of whom are also members of DEMSA. We are pleased to be working with DEMSA to support its strategy of ensuring its members operate to the highest standards.”

DEMSA AND IMA PARTNERSHIP TO HELP RAISE DEBT ADVICE STANDARDS

August 26, 2011 Comments Off

The Institute of Money Advisers (IMA) and the Debt Managers Standards Association (DEMSA) today announce a new partnership that will continue to raise standards in the fee payable debt advice sector. The initiative will include the introduction of a new professional qualification in debt advice for advisers working in DEMSA member firms.

The qualification will have its first intake of students in November 2011 and will be studied over 16 weeks covering key areas of debt advice including; budgeting, income maximisation, priority debts, insolvency, managing caseloads, and relevant legislation such as the Consumer Credit Act. It will be accredited by Staffordshire University and will provide an independent and rigorous assessment of the knowledge and skills of individual advisers in the DEMSA member firms.

The IMA launched a similar professional qualification for advisers in the free advice sector in 2010 and has so far seen almost 300 advisers achieve this qualification.

The DEMSA and IMA partnership will also include Continuous Professional Development for individual advisers requiring them to undertake ongoing training and development.

DEMSA has long been committed to raising standards across the fee charging debt advice sector. As well as working closely with the OFT to lead the drive towards higher standards, DEMSA recently introduced a more robust complaints mechanism for clients who receive advice from their member firms and has appointed Caroline Siarkiewicz, the Executive Director of the IMA, to sit on its Compliance and Disciplinary Panel.

David Blocksidge, Head of Debt Management Team, Consumer Credit Group at the OFT comments: “We are highly supportive of the proposal for the IMA to work with DEMSA to improve standards in the fee charging debt management sector. DEMSA has an OFT approved Code of Practice which its members abide by and we welcome DEMSA’s approach to seek to improve the training and competences of the staff working for its members.”

Steve Meakin, Chair of the IMA said: “The agreement with DEMSA represents a significant step in continuing to improve standards of advice in the fee charging sector. The IMA’s ‘Certificate in Money Advice Practice’ was introduced in 2010 for advisers in the free advice sector and has played a key role in establishing a benchmark for high quality advice. I believe that our work with DEMSA in introducing a new qualification and CPD scheme will mirror what has already been achieved in the free advice sector.”

Michael Land, Chairman of DEMSA adds: “As the principal trade body in the sector, DEMSA members are at all times required to provide informed, clear and appropriate advice which is always in the best interest of their clients. DEMSA members do already make significant investments in training and development however, introducing a formal qualification will act as an important vehicle for raising debt advice standards across the sector.”

DEMSA appoints retired High Court judge as Chairman of Compliance and Discipline panel

August 18, 2011 Comments Off

The Debt Managers Standards Association (DEMSA) has appointed The Hon Sir Harry Ognall, DL as Chairman of its Compliance and Discipline panel.  Sir Harry is a retired High Court Judge. Before his appointment to the Queens Bench division of the Court, his practice involved a wide variety of criminal and civil cases, including corporate fraud. He has also previously acted as an arbitrator in the motor insurance industry.

Sir Harry will join Richard Wharton, Director & General Secretary of DEMSA and Caroline Siarkiewicz, Executive Director of the Institute of Money Advisers on DEMSA’s Compliance and Discipline panel, as well as Patricia Harter of West Yorkshire Trading Standards Service and Michael Fox, a Deputy Lieutenant of West Yorkshire.

The OFT is consulting on revised guidance for the debt management industry in order to ensure stricter compliance in the sector. DEMSA has also embarked on a revision of its own Code of Conduct in order to give every assurance to consumers of the high level of service they can expect. This revision will include changes to the disciplinary structure governing the conduct of its members.

DEMSA’s Compliance and Discipline panel meets to consider a complaint about one of the members from either creditors or clients, which has not otherwise been resolved in a complete and satisfactory manner. The panel is empowered to award redress, and to impose a variety of stringent sanctions such as fines, restitution and requiring changes in operational practices. The panel may also report complaints to regulators who would review suitability for holding a Consumer Credit or other license. In his new role, Sir Harry will lead the process of revising the DEMSA Code’s disciplinary provisions involving the panel and will monitor the application of these provisions so as to ensure their ongoing fairness and efficacy.

Commenting on his role, Sir Harry said: “I believe that the panel will prove to be of real advantage, not only to the present and future members of DEMSA but also to creditors and, crucially, the consumer. It will instil further confidence amongst clients and creditors that there are proper measures of redress open to them in the event of dissatisfaction.”

Michael Land, chairman of DEMSA, said: “We work closely with the OFT to help set and promote high standards in the industry and we hope that the revisions to both the OFT Guidance and the DEMSA Code will ensure these standards continue to rise. We are grateful to Sir Harry who accepted this role only after careful consideration and discussions with the OFT, who are themselves supportive of this move to strengthen the compliance procedure. His great legal experience will help DEMSA’s members continue to provide the best possible service to their clients.”

DEMSA MEMBERSHIP INCREASES

July 25, 2011 Comments Off

We are pleased to welcome Pentagon (UK) Ltd Trading as Eurodebt Financial Services, and Churchwood Financial Limited, as members of DEMSA, both having satisfactorily completed the stringent compliance audit process.

DEMSA is also continuing to work with several more prospective members in processing their membership applications.

DEMSA strongly condemns the malpractice uncovered by BBC investigation into debt management companies

May 31, 2011 Comments Off

Following the news that some debt management companies have been holding on to clients’ money rather than paying it to creditors, Michael Land, Chairman of the Debt Managers Standards Association (DEMSA), said: “DEMSA condemns in the strongest terms these completely unacceptable practices and we support the OFT in taking tough action against these rogue firms in the debt settlement industry.”

Under the terms of the OFT debt management guidance notes, any monies held on behalf of consumers must be kept in a client account not usable by the firm for the purposes of its own business.

Mr Land explained: “DEMSA ensures that all its member firms have safeguards in place to protect the consumer. All member firms have to keep customers’ money ring fenced in trust accounts and provide a compliance certificate that they are maintained satisfactorily by a chartered accountant. Firms belonging to DEMSA must also pass on clients’ payments to the consumers within five working days.”

Mr Land advised any customer seeking to use a debt management company to look for the DEMSA and OFT logo for reassurance that they are dealing with a reputable firm which is committed to the high standards set out in the DEMSA Code of Conduct.

DEMSA is the only trade body in the sector to have received approval of its code under the OFT’s Consumer Codes Approval Scheme. As the principal trade body in the sector it works closely with the OFT to help promote high standards in the industry.

Membership of DEMSA is reliant upon debt management companies being able to demonstrate that they comply with the standards set out in the DEMSA Code of Conduct. All members are subject to ongoing stringent checks to ensure they adhere to both the Code and OFT guidance.

OFT working with DEMSA to clean-up industry

September 29, 2010 Comments Off

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.”

DEMSA Backs the OFT’s Drive Towards Higher Standards in the Debt Management Sector

September 28, 2010 Comments Off

Commenting on the OFT’s debt management compliance review Michael Land, chairman of DEMSA said: “DEMSA and its members fully support the OFT’s drive towards higher standards in the debt management sector.

“DEMSA members have long been committed to raising standards, indeed DEMSA is the only trade body in the sector to have received approval of its Code under the OFT’s Consumer Codes Approval Scheme.  We will continue to work closely with the OFT to lead the drive towards higher standards and we are encouraged that the OFT has acknowledged the key role for DEMSA in doing so.”

The boards of DEMSA and DRF examine ways of working more closely

April 9, 2010 Comments Off

In the best interests of consumers and the Authorities, the Boards of the Debt Managers Standards Association Ltd (DEMSA) and Debt Resolution Forum (DRF) are examining ways of working more closely together to effect best practice and compliance in the debt management industry.

Currently the members of both associations represent 80%+ of the private sector debt managers in the UK.

DEMSA calls to prevent last blast of credit before Christmas

December 10, 2009 Comments Off

DEMSA calls on shoppers to be more aware of their spending in an attempt to prevent the post Christmas financial hangover

The Debt Managers Standards Association (DEMSA) has called on consumers to be more aware of their spending habits when shopping in the run up to Christmas, as a latest study by Moneysupermarket.com (1) reveals that 45% of UK adults are worried about how they will fund their traditional seasonal shopping.

According to the research by the comparison website, only 34 per cent of people will have saved enough money for presents by the time Santa starts his delivery mission – leaving 66 per cent having to resort to credit to fund purchases or without funds at all.

Last year, the average shopper spent ¬£320 on presents alone, according to figures by Asda (2), and that figure doesn’t look like reducing this year.

Add to this unemployment figures and the dire state of the job market, along with the immediate outlook for the economy, and the risk of developing potential debt problems increases – hence why DEMSA have called for shoppers to be extra careful when shopping this Christmas.

The beginning of the year is the busiest time for debt companies, as many people have one final blast on their available lines of credit before credit card bills and bank statements from Christmas arrive.

Michael Land, Chairman of DEMSA, said: “At Christmas time, many people’s finances are placed under intense strain as they have to find money for presents, food and travelling to see relatives which they would otherwise not have to.

“We all feel a duty to treat our friends and family over the festive period, along with getting in the spirit of things with celebrations, but we also have to be aware of the longer-term effects of maxing out credit cards and overdrafts.

“If this happens then finding expert impartial advice is essential. The DEMSA website www.demsa.co.uk lists all accredited companies so consumers can quickly find an honest and impartial company.”

The danger for consumers is that they may seek advice from debt management companies that have confusing or misleading terms and conditions, as Charles Wallace, head of codes, Office of Fair Trading, explains:

“Consumers are becoming increasingly savvy when it comes to controlling the amount they spend on credit. However people are still getting their fingers burnt when it comes to managing debts. This is why Office of Fair Trading has worked with DEMSA to safeguard consumers against ill-advised debt management solutions. When looking to choose a debt management plan, consumers can feel confident that they can rely on the advice of DEMSA members regarding the service being offered: wherever consumers see the OFT Approved Scheme logo, they can be confident about the advice and service they will receive.”