Fianna Fáil Finance Spokesperson Michael McGrath has welcomed the publication of new Central Bank regulations in relation to the operation of debt management firms.
Deputy McGrath stated, “This is a welcome and overdue development. It is important to acknowledge there are legitimate providers within the industry and there is a role for debt advice. Given the proliferation of new firms within the industry in recent years – in large measure due to the explosion of personal debt problems – self regulation was no longer a viable option and it is correct that the industry will operate under clearly defined Central Bank supervision.
“While MABS provides an excellent service and it is appropriate that clients of debt advisory firms would be aware of the services that they offer, they may not always be the most appropriate solution for distressed borrowers. Some customers need the on-going hands on support that a debt advisor can offer and in some cases, by keeping a client out of litigation in the courts, the debt advisor may offer an overall cheaper solution. The debt advisor firms who are playing by the rules and following best practice have been put at a disadvantage by disreputable operators within the industry.
“Proper training of staff is a vital component of a well regulated system. Staff should have appropriate training to enable them to carry out their work with due care, skill and fairness, particularly when dealing with vulnerable customers. I believe consideration should be given to making the Qualified Financial Advisor (QFA) qualification a minimum requirement for those who interact with members of the public.
“Enforcement is the other vital issue. It is essential that the Central Bank have the necessary expertise to ensure these provisions are fully implemented in practice.”