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Debts: Enforcement

Volume 490: debated on Monday 30 March 2009

To ask the Minister of State, Department for Business, Enterprise and Regulatory Reform if he will bring forward proposals to include in the rules relating to debt enforcement a requirement for guidance on those rules to be provided to (a) debtors and (b) creditors. (265595)

The Office of Fair Trading's debt collection guidance is available on its website at:

www.oft.gov.uk/advice_and_resources/resource_base/legal/cca/debt-collection

and is drawn to the attention of consumers who make complaints about the behaviour of consumer credit licensees pursuing debts. As part of its proactive compliance strategy, the Office of Fair Trading conducts a programme of engagements with agencies in the free advice sector in order to raise awareness of the guidance among advisers and consequently among consumers. I am also pleased to note that following my meeting last month with the debt collection trade association, the Credit Services Association, members will be required to flag up in their initial letters to debtors where to go to obtain free debt advice.

Publicity about enforcement action taken by the Office of Fair Trading further highlights to consumers and businesses the practices it considers to be unfair and therefore incompatible with licence fitness.

The debt collection guidance will be updated towards the end of 2009 and will clarify the responsibilities of lenders when pursuing or selling on debts. Forthcoming Office of Fair Trading guidance on second charge lending will also outline the principles to be followed when dealing with borrowers in arrears and will be consistent with the debt collection guidance.