Contents:

  1. Introduction
  2. Availability of the Code
  3. Membership of DEMSA
  4. Compliance with Statutory Regulations
  5. Compliance with OFT Debt Management Guidance Notes
  6. Training
  7. Marketing, Advertising and Publicity
  8. Information to be provided to Consumers
  9. Vulnerable Consumers
10. Contract Terms
11. Client Accounts
12. Debt management Services
13. Client Interests
14. Lenders
15. Redress
16. Failure of a Debt Management Company
17. Extreme Hardship Cases
18. Administration and Monitoring of the Code
19. Annex for Individual Voluntary Arrangements (IVA's)

1. Introduction

DEMSA was established in 2000 in order to promote good practice in the debt management industry, and to protect the interests of the public and the creditors to whom they owe money.

Debt Management Companies (DMC’s) act on behalf of borrowers to help them clear their debts. They do this by entering into direct negotiations with creditors in order to facilitate the repayment of debts. In return for their services DMC’s may be paid a fee by the borrower.

The Code has been developed, and revised, in consultation with lenders and DMC’s and will be reviewed on a regular basis with input from appropriate consumer organisations. DEMSA is seeking approval of the code from the Office of Fair Trading under its Consumer Code Approval Scheme (CCAS), and in reviewing the Code due consideration has been given to the guidelines provided by the OFT in the “Debt Management Guidelines” document issued by them in December 2001.

The aim of the Code, and that of DEMSA, is to encourage DMC’s 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.

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2. Availability of the Code

All members of DEMSA must make available full details of the Code to consumers, on request, and without charge. The Code is also available directly from DEMSA either by post or by downloading from the DEMSA web-site, free of any charge.

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3. Membership of DEMSA

DMC’s wishing to join DEMSA and those in membership have to demonstrate that they are able to comply with the standards and requirements set out in the Code, and they undertake to comply in all aspects. DEMSA monitors and audits compliance with the Code by its members and has power to discipline any offending members The Code should be read in conjunction with the DEMSA Complaints Handling and Independent Redress Procedures and the DEMSA Compliance and Disciplinary Procedures, which are binding on all DEMSA members.

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4. Compliance with Statutory Regulations

Members must be licensed appropriately and carry out their business in accordance with the requirements of the Consumer Credit Act 1974.

Members must also comply with any other regulations which may apply, including the Data Protection Act 1998, Consumer Protection Act 1987, Financial Services (Distance Marketing) Regulations 2004, Unfair Contract Terms Act 1977, Unfair Terms in Consumer Contracts Regulations 1999, Supply of Goods and Services Act 1982 and any further enactments thereof.

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5. Compliance with OFT Debt Management Guidance Notes

It is a requirement of membership of DEMSA that the “Debt Management Guidance Notes” published by the OFT in December 2001, and any future issues, revisions or commentaries are fully complied with. The Debt Management Guidance places important obligations on DEMSA members, to which reference is not always made in the Code. To that end, whilst the DEMSA Code of Conduct is an extension of, and in addition to these guidelines, where any point is not specifically covered in the Code, then the relevant part of the Debt Management Guidance Notes must be applied.

The Debt Management Guidance Notes are available by following the link from the DEMSA website, www.demsa.co.uk or by visiting the OFT website, www.oft.gov.uk.

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6. Training

• Members must be able to demonstrate to DEMSA that they provide their staff with sufficient and appropriate training to enable them to carry out their work efficiently and to acceptably high standards.

• All staff employed by members must be aware of the existence and terms of the DEMSA Code of Conduct, and the Debt Management Guidance Notes, and be made aware of their specific responsibilities in ensuring that the Code and Notes are adhered to. Members must provide relevant and effective training to make sure their staff understand the Codes’ provisions and their own legal obligations to consumers and responsibilities under the Code.

• Members must ensure that all staff are fully trained and equipped to deal with the needs of particularly vulnerable consumers (see section 9)

7. Marketing, Advertising and Publicity

Members must ensure that their advertising or promotional material, whether by newspaper, TV, Radio, web-site or any other media form:

• Is clear, accurate and truthful, and does not in any way mislead either expressly, or by implication or omission.

• Complies with all regulations and guidelines in force from time to time

• Contains reference to their membership of DEMSA and their adherence to the DEMSA Code of Conduct, by use of the DEMSA logo.

• All literature must give details of how consumers may obtain a copy of the Code.

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