Financial Ombudsman complaints rise – trust deeds in Scotland

17th February 2011

The Financial Ombudsman Service (FOS) exists to provide consumers with redress where their justified complaints are not dealt with properly by consumer credit licence holders. Such CCL holders include most trust deed advisers in Scotland and trust deed websites in Scotland, along with debt management companies.

The first nine months of 2010 saw an increase of 25% in the number of complaints made to the FOS.

Of the complaints made, more than 60% were upheld in favour of the consumer. Typical issues identified by FOS when supporting such complaints included:

• People who were promised they would be free of debt by a certain time, who later discovered the promise was not kept.
  
• Consumers who were unaware that a proportion of their payments into a debt solution would be taken as fees.
  
• Poor administration on behalf of the solution provider, often including payments to creditors being made later than agreed.

With the lack of regulation in the industry until now, it is easy to see how problems have arisen. However, the Office of Fair Trading are now taking decisive action, ensuring that debt advisers, including those providing advice on a trust deed in Scotland , take the requisite steps to ensure their businesses run in a way which is fair to consumers.

Many debt solution providers have surrendered their consumer credit licenses recently, with others subject to a review to determine if their standards have risen sufficiently.

Our trust deed forum continues to offer confirmation that poor advice is still being provided. Such poor advice often emanates from debt sales advisers or trust deed sales websites, which appear to maximise the prominence of the advantages of a trust deed in Scotland, without paying sufficient attention to the potential pitfalls.

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