Standards of trust deed advice investigated

11th July 2011

The Daily Mirror newspaper are currently running a ‘Stop the Debt Rogues’ campaign and has recently exposed some horror stories regarding the standard of trust deed advice and other debt advice being provided by some. The case-studies provided are sadly echoed from time to time in our trust deed forum. Poor advice, poor service and poor products have all been identified in The Mirror and our forum as problems which are all too regularly experienced.

One Mirror journalist, Tricia Phillips, has written an emphatic criticism of the recent updated ‘debt management guidance’, which has been issued by the OFT. While currently subject to a period of consultation, it’s expected that the much updated guidance will come into full effect later in the year. Tricia Phillips argues that the guidance does not go far enough. She believes the industry should be, “fully regulated, like any other provider offering financial products and advice”.

The guidance itself will be entirely relevant to protected trust deed providers and trust deed intermediaries. Both will be fully subject to the updated guidance when it comes into effect.

The Westminster Shadow Secretary of State, John Denham, argues strongly in the same paper that opportunities to force debt advice standards upwards are being missed. By way of balance he also contends, “There are some excellent companies out there that offer high customer service and advice…”

The Scottish trust deed advice sector itself appears to be reacting in a variety of way to the issue of the consultation debt management guidance:

Trust deed providers are already regulated professionally by insolvency professional bodies. The requirements of these bodies are quite different to the requirements of the debt management guidance, which focuses more on the needs of the client rather than ticking the appropriate boxes to comply with insolvency law and guidance. Accordingly many insolvency firms providing trust deeds are working hard to update their websites, their promotional materials and other key aspects of their services. Some have also joined trade associations, such as the Debt Resolution Forum, which are working to drive trust deed advice standards upwards.

Some trust deed introducers and intermediaries have much work to do in order to comply with the new debt management guidance. Providing equal prominence to the drawbacks of trust deeds (compared to the advantages) on websites is a clear area of widespread non-compliance. There are also major issues connected to unqualified individuals providing trust deed advice, non-transparency regarding trading relationships and also a failure to provide the full breadth of advice on the other options available.

Any member of the public looking for excellent protected trust deed advice can follow a few simple steps. Firstly, don’t accept the first advice you receive. It’s wise to compare what recommendations other firms provide. Never accept trust deed help from cold-callers, they’re at the root of many serious problems. Avoid trust deed websites which prominently display the benefits of trust deeds without being clear about the drawbacks (they’re ‘selling’ rather than ‘advising’). Finally, refuse to accept trust deed advice from any individual who cannot tell you how they are professionally qualified to deliver debt advice. Professional debt advice and insolvency exams exist; those who have passed these exams have demonstrated their competence to advise you properly.

If you require any further trust deed information, advice or support please do not hesitate to call our advice line on 0800 043 7201 or contribute to our trust deed forum.

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