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Clarification on Licence Renewal Fears
Government regulators are trying to reassure the collections industry that they will support them by using common sense in withdrawing licences and cracking down on claims management firms.
Nigel Cates, deputy director of the consumer credit group at the OFT, addressed members of the CSA and DBSG at the recent annual conference and insisted that collections agencies should disregard media reports that they could not lose their licence while applications are considered.
He explained: "Once you have an existing licence, if you get your renewal application in before the renewal date then your current licence will continue until your application is assessed. There has been some incorrect media coverage on this issue."
He also agreed that there was a problem with consumer action websites which purport to give debt advice but actually show debtors how to avoid paying what they owe.
"We acknowledge that there is a real problem with the consumer action groups and the misleading debt advice which some of them give which is trying to turn some people into won't pays."
But, when asked if he would consider the licensing of these websites, because they gave debt advice, he said it would not be feasible as there was no law that required them to hold any kind of licence. In addition it was difficult to take action because the internet moved so fast and web hosts were usually based overseas.
Jan Farendon, deputy head of claims management at the MoJ, insisted they were already cracking down on claims management companies advertising they could buy and annul consumer debts.
She explained: "The sale of debt by a consumer is something that is not provided for in law. So any business that is doing it is breaking the law and we are working through them one by one. Credit Card Killers have had their licence revoked, although they have appealed that."
Meanwhile, Leigh Berkley, chair of the DBSG, added that, following successful talks with government, he was confident the OFT would not prosecute if a collections agency did not send a statement to a debtor who they reasonably know to have gone away.
He continued, saying that a new Compliance Working Party had been set up for the purpose of clarifying 'who needs to send what, to whom, and in what format' and that the DBSG was strengthening its code of conduct, which already reflected the CSA's code, but added a range of new disciplinary sanctions are now being discussed in detail.
In addition, the group would also be looking at how a 'kite mark' could help buyers and sellers in the future, especially with regard to compliance. Leigh added that the CSA had recently carried out its first visit to a member to discuss criticisms made against them in the media.
Finally, Leigh threw the spotlight on the three strands of the association's future strategy – PA, PR and PT, the Three Ps. PA stands for Public Affairs (the group's continued lobbying of government and its regulators, such as the OFT), PR for Public Relations (the need to stay on the front foot and use data to support campaigns and claims) and PT for Pulling Together – working together as one unit for the good of the industry.
Najib Nathoo, outgoing president of the CSA added: "A key way that we can show how important and useful our industry is, is by sharing information – especially contributing to the CSA's regular collectability index. The information is confidential and a powerful tool in helping to promote our public face. Sharing basic statistics and data is essential in giving us our voice in the market."
Original article courtesy of CCR.
