OFFICE OF FAIR
TRADING News Release (140/08) issued by COI News Distribution
Service. 2 December 2008
The Debt Managers
Standards Association (DEMSA) has become the first trade body
within the debt management industry to successfully secure
approval for its code of practice under the OFT Consumer Codes
Approval Scheme (CCAS).
Debt management companies act on behalf of consumers to help
clear outstanding debts by negotiating with creditors and
facilitating repayments. In return for their services, these
companies are generally paid a fee by the customer.
DEMSA currently has four members, who between them deal with
around 38 per cent of all fee-paying debt management cases handled
in the UK.
Consumers using companies that are members of DEMSA are
guaranteed a better standard of customer service than the law
requires. The OFT only approves codes that have proved effective
in safeguarding and promoting the interests of consumers beyond
the basic requirements of the law. These companies have agreed to :
* a set of comprehensive monitoring procedures including
inspection visits, monitoring of telesales with potential
customers, checks on marketing, advertising and web sweeps,
* an independent disciplinary panel to ensure that the code is
complied with and enforced,
* a range of sanctions including warnings and ultimately
termination of membership for dealing with non-compliance,
* protection of all clients deposits or prepayments by the use of
separate ring-fenced accounts,
* an obligation that they will use fair terms and conditions and
provide
clear written pre-contractual information for customers,
* regular customer satisfaction surveys so that problem areas can
be identified and addressed so that the code can be developed and
improved for the benefit of consumers.
Consumers wanting to use a DEMSA member can now look for the OFT
Code Approved logo on company advertising and literature.
John Fingleton, OFT Chief Executive said :
'DEMSA has undertaken a rigorous assessment to achieve OFT
Code Approval, and I congratulate them on their work to improve
standards for consumers using their services. Consumers can be
confident that where they see the OFT Approved Code logo they will
be treated fairly, and that an effective redress scheme is
available if this is not the case.'
Michael Land, DEMSA Chairman said :
'We are delighted to have achieved OFT code approval after
working closely with the OFT and members to ensure the highest
standards for consumers. We are especially pleased to have become
only one of eight trade bodies to currently have gained this approval.
'It is now even more important, with so many people needing
expert debt advice and help, to be totally confident when dealing
with our members. DEMSA expects that several more debt management
companies will be joining as members after they have passed the
rigorous DEMSA requirements.'
NOTES
1. The OFT's Consumer Codes Approval Scheme consists of two
stages. During Stage One the code must meet the OFT's
published core criteria, which contain measures designed to remove
or ease consumer concerns about undesirable trading practices. In
Stage Two the code sponsor must prove that its code lives up to
the promises made in Stage One by demonstrating that the code is
being effectively implemented by its members and that consumer
disputes are properly resolved.
2. DEMSA originally submitted its code for assessment under the
OFT's code approval scheme on 20 November 2001. It completed
stage one on 23 June 2005. See PN 121/05 for further information.
3. The four DEMSA members are Chiltern Debt Management, Gregory
Pennington, Debt Management Associates Ltd, and Loan Management
Services Ltd.
4. The Enterprise Act 2002 gives the OFT powers to approve and
promote consumer codes of practice that meet the OFT's core
criteria. The OFT's Consumer Codes Approval Scheme aims to
promote and safeguard consumers' interests by helping
consumers identify better businesses and to encourage businesses
to raise their standards of customer service. See PN 31/01 for
further details.
5. See the Consumer Codes Approval Scheme section on the OFT
website for further information and a list of approved trade bodies.
http://www.oft.gov.uk
PUBLIC enquiries: 0845 7224499
enquiries@oft.gov.uk
OFT
reports and consumer information leaflets are available free
from:
OFT, PO Box 366, Hayes UB3 1XB 0800 389 3158 oft@ecgroup.uk.com