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Debt Advice and Debt Management

As it happens, I was about to tell the House about an instance of which I have recently learned. An individual entered an agreement to pay back their debt through a debt management plan. The plan spanned a total of 14 years and required repayment totalling far more than the original debt. In fact, this particular individual would have found it far cheaper to declare bankruptcy. The information and advice simply were not made available to the customer, who was instead trapped in a monthly payment schedule repaying vast fees. In the past, and certainly in that instance, debt management companies have been responsible for exploiting the vulnerable and heavily burdened with debt and it is welcome that the Office of Fair Trading has begun to crack down on rogue operations. As a Conservative, more regulation is not something I typically welcome, but, in tackling rogue DMCs it is clearly necessary. Their fees are not always made abundantly clear and cost consumers up to £250 million a year. Adding such high costs to the burden for those who are already over-indebted does not strike me as particularly helpful.