On Tuesday 7 February 2012 the APPG on Debt and Personal Finance MPs hosted an evidence session to explore the regulation of high cost credit and debt management services. Members of the APPG hope to improve the regulation of the consumer credit and debt management service markets.
The APPG members took evidence from Teresa Perchard, Director of Policy and Advocacy at Citizens Advice; David Fisher Director of Consumer Credit at the Office of Fair Trading (OFT); John Lamidey, Chief Executive, Consumer Finance Association (CFA); Henry Raine, Head of Regulatory and Public Affairs, Wonga and Melanie Taylor, Director of External Relations, Debt Managers Standards Association (DEMSA). The session was chaired by Yvonne Fovargue MP.
APPG members and Citizens Advice argued that testimony from their constituents and clients points to an alarming expansion in the size of the debt management and high cost credit industries, and to worrying examples of widespread bad practice within these “markets of distress”, including aggressive marketing practices, the use of large up-front fees which lack transparency, and the misuse of rollovers and continuous payment authorities.
A report published by the APPG following the evidence session is available here: APPG Summary Report [ PDF]
Following the evidence session the officers of the group met with Consumer Affairs Minister Norman Lamb to discuss the issues raised. The Minister provided an update on the action the Government is taking to reduce consumer detriment in both markets and confirmed that before the summer recess the Government plans to make an announcement regarding whether to give the OFT powers to suspend consumer credit licenses with immediate effect pending the transfer of consumer credit regulation to the FCA in 2014.