asked Her Majesty's Government:

Whether they will take measures to prevent people in debt from seeking artificial debt consolidation schemes. [HL3045]

The Government want to see access to free, impartial debt advice for all who need it. We are spending £47.5 million on rolling out face-to-face debt advice for the financially excluded. This will fund the recruitment and training of more than 500 new advisers. These will help tens of thousands of consumers to make informed choices on how to handle their debt problems. We have also helped fund the National Debtline, which is now able to provide telephone advice to more than 120,000 clients.

Providers of debt consolidation must be licensed under the Consumer Credit Act 1974. The Consumer Credit Act 2006 provides the Office of Fair Trading with new powers to take action where licensees do not meet the necessary standards. It also enables borrowers to challenge a credit relationship which is unfair. In addition, legislation provides for protection against misleading advertisements and against fraud.