Fianna Fáil Finance Spokesman Michael McGrath has said the Government should accept the Fianna Fáil bill to regulate providers of debt management services when the Dáil resumes next month.
‘The Regulation of Debt Management Advisors Bill was an important part of the package of measures unveiled by Fianna Fáil last month aimed at protecting the family home from repossession and radically reforming personal insolvency legislation. We will move the bill in the Dáil as soon as the House returns and hopefully the Government will accept the bill as an important step forward in this area.
‘The collapse of Home Payments Limited in the past few days has underlined the need for regulation to be urgently introduced for all businesses involved in providing debt advice, debt management and household budgeting services.
‘Many distressed borrowers have signed up to seemingly attractive offerings of some providers in this area. The advisor often instructs the borrower to cease making any further payments directly to the creditors and instead to set up a standing order making a regular payment to the advisor, who in turn, pledges to issue payments following a negotiated agreement.
‘Regrettably, many borrowers subsequently discover that the first few payments to the advisor merely represent the advisor’s fees and are not passed on to the creditors at all, resulting in the borrower’s situation actually getting worse.
The Fianna Fáil bill provides:
- any business (called ‘A Debt Management Advisor’ (DMA)) offering these services would be subject to regulation by the Central Bank and be required to have an authorisation
- a DMA would be required to set out all fees at the point of engagement
- a DMA would be prohibited from handling client monies themselves
- the Central Bank shall publish a Code of Practice concerning Debt Management Advice within six months of the legislation coming into force
- the legislation sets out the penalties that apply to persons found guilty of an offence
‘The Fianna Fáil bill provides badly needed protection for the growing number of consumers reaching out to these businesses for assistance. The Bill needs to be urgently implemented and we look forward to moving the Bill next month.’