Archive for the ‘Money Guidance’ Category

New Lending Code 2: mental health, systems

November 6, 2009

Debt and mental health
This section of guidance is relevant to both personal and micro-enterprise customers.
173. The impacts of financial difficulty can be especially acute for customers with mental health problems. Subscribers should consider their processes and systems to ensure that they can be responsive to a customer in financial difficulties, from the point at which they are made aware of a mental health problem. [Reproduced with the kind permission of the British Banking Association – here]

The Lending Code is now part of the formal equipment of the Office of Fair Trading, and sits more certainly side by side with holding of Credit Licences and with such fair dealings rules as the Consumer Protection Regulations.

Monitoring remains with the Lending Standards Board [that was the Banking Code Standards Board], but penalising becomes a matter for the OFT.

This is why this is such an important advance. It is now a requirement for creditors and debt collectors to take into account mental problems where there are financial difficulties. This is already covered in the CPRs, under the guise of vulnerable debtors. Vulnerable includes the elderly and those without funds.

While the Debt and Mental Health section is by no means as definite as I would like, it is such a big strengthening of the position of debtors with such health problem that the wording is to be praised as improving the experience of such debtors.

By featuring the good practice guidelines of the Money Advice Liaison Group, the other members of the vulnerable classification are effectively included. The more definite advice in the guidelines also becomes part of good practice.

It is also worth glancing at the 2005 comments of the Treasury Select Committee.

Joseph Harris, Debt Control Man
Author: Control Your Debt Crisis on Your Own Terms
http://www.controlyourdebtcrisis.co.uk

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Lending Code secrecy ‘is a disgrace’

October 12, 2009

I have just released this press release; as you see it is a matter of some seriousness

The new Lending Code, which replaces the credit and financial difficulties sections of the defunct Banking Code, is due to come into effect on November 1. Some nineteen short days away.

There is to be no public sight of these changes, nor any consultation process before these changes come into effect.

Specialist author Joseph Harris – Debt Control Man – has been trying to get sight of these changes since June. He has been told they will not be released until they are in effect on November 1 by Paul Ross, the man who is writing the new document for the British Bankers Association, in an email.

“This is a clear case of dictatorial behaviour,” declares Mr Harris. “It is a disgrace that no one concerned with the field, nor any debtor – whether defaulting or not – has any idea how the changes will affect them.

“Vince Cable was wrong when he said Gordon Brown had changed from Stalin to Mr Bean. On the basis of this secrecy and undemocratic behaviour he remains Stalin.”

Phone calls and emails to the FSA and the OFT result in classic Civil Service dropping the query into the new virtual filing bin.

“Even though there are many rules to help debtors negotiate the treacherous waters of finding the best way for their needs, too many creditors and debt collectors – including the biggest companies – do their best to sidestep them.

“Lack of a clear knowledge of what is happening among debtors and their advisors leaves these worst companies a window of opportunity to harass and bully particularly the poorest and most vulnerable debtors,” adds Mr Harris, author of Control Your Debt Crisis on Your Own Terms http://www.controlyourdebtcrisis.co.uk/book-cydc/cydc_Book_intro.shtml .,

“It is also a tragedy that the opportunity to include the requests of the Treasury Select Committee in 2005 and of the Money Advice Liaison Group has been lost.”

While most of the Banking Code is being operated as statutory Code of Practice directly by the FSA, the credit and financial difficulties sections move to the The Office of Fair Trading to sit beside the OFT’s duties controlling issue of Consumer and Business Credit Licences.

Joseph Harris, Debt Control Man

Do You Feel Well Advised on Credit, Debt, Finance?

August 28, 2008

In a modern world these matters are crucial. Half a century ago in England and Wales and indeed in most of the world the mantra that was just starting to go out was: “Neither a borrower nor a lender be”.

But today the oil of society has become credit—and its siamese twin partner, debt. And most of us are borrowers who hold the debt.

Realisation has grown of this. In the past few years there has been a flow of legislation and regulatory duty to help the ordinary consumer. You and me. I was considering this when I came across the Financial Services Authority (FSA) consultation paper review, put out in April this year.

In its retail distribution review the FSA goes for a simplified structure where there would be independent advisers on financial matters, sales persons and organisations would not be advisers as well and a third arm would be the Money Guidance set up which I have this page on https://debtcontrolman.wordpress.com/money-guidance-developments/.

While I think this may at root be a good idea, I wonder how independent advisers will make their income without charging us. And wit the Money Guidance free advice service and such excellent charities as the Citizen’s Advice Bureaux and National Debtline.

Of course if advice and sales are mixed the inevitable leading will happen. Unless the agent has deals with all suppliers—quite a task.

But by splitting the tasks it may simply put an extra cost on the consumer. Presumably these qualified commercial advice specialists will have legal liability for their advice. That might be a good thing. But how many people will be attracted to advice with the costs and trouble of the qualification, the cost of legal insurance and the problems of attracting custom?

There is plenty of meat in the report, and I may return to it after the final report comes out in October. I just wonder how many people would seek advice from an independent advisor before making a purchasing decision.

Joseph Harris
Debt Control Man

How’s Your Financial Competence?

July 19, 2008

I ask not out of nosiness, but because tomorrow various arms of the financial great and the financial good are gathering together in Cambridge [Money Guidance Pathfinder conference] and in three days will, it seems, work out how to teach us all better money management.

Well. No. I’m being unfair. This process started here in 2006 when the Treasury declared it would happen. And they did this because the OECD decided it should [though you will hear the government take the credit as though it was all their own work!].

And what it seems they are actually discussing is the detail of a pilot progamme in the north-east and the north-west of England to start next year.

The idea behind it is to give much more, and much more readily available, information on what credit in particular and money management in general is all about. And I think we have to applaud the idea, and the fact that it is making progress – it may even be that the UK is moving faster than any other country on it.

The conference includes banks as well as existing free information providers like the Citizen’s Advice Bureax, so there is a chance it really will deliver good advice.

But why, whenever I see the word stakeholder in these announcements, do I feel about to be in need of the guidance of Caveat Emptor[let the buyer beware – or look for the small print – or hold tight to your purse]?

At least we can watch and wonder with the hope that in a few years most people really will be made more aware of the dangers of bad money decisions, without the need to have been through the nightmare of bad debt first – as so many of us have been.

I am writing a blog page on the Money Guidance process, but I will take a few days to put it together.

Joseph Harris