Payplan calls for independent regulation of the debt advice industry
Payplan, which employs over 800 people in the UK, provides debt solutions services to lenders, whose clients are facing financial difficulties, as well as to individuals, has over 20 years experience working with people in debt.
According to managing director, John Fairhurst, apart from the obvious concern about the lack of oversight on the financial stability of debt solutions companies in the wake of companies failing, the main worry is over the amount of money being charged to clients for the service they receive.
He said: “In what has become a significant growth segment of the financial services market because of the demise of so much of the lending business, we have seen the rise of providers where some have put fee earnings well ahead of the welfare of their clients.
“For some larger players, this has meant that they are able to sustain large self perpetuating advertising budgets paid for out of inflated fees, which skews the playing field for advice in favour of those with the largest advertising budgets, rather than those who can do the most good for the client.
“There is a lot of evidence of inappropriate advice resulting in clients being unable to afford repayments to debt management plans and then being suckered into further plans which also stand no chance of getting clients out of debt.”
He continued “The misselling scandal that surrounded PPI, endowments and latterly sub prime mortgages is now being repeated in an area where clients are at their most vulnerable.
“I hope that this government will recognise the importance of ensuring proper oversight and having seen the failure of self regulation in the mortgage market, ensures that this politically easier option being touted by some industry bodies is dismissed in favour of proper independent regulation.”