The National Pawnbrokers Association (NPA) have backed the Government’s plans for a new debt advice service – but warned there could be an unintended legal loophole for dubious businesses if Ministers were not careful.
National Pawnbrokers Association Chief Executive, Ray Perry, said:
“Chancellor George Osborne is right to want to revamp the free debt advice service which is offered to all consumers. Good and impartial debt advice has to be at the heart of the consumer credit marketplace so that individuals can make informed decisions as to the financial solutions they require”.
“NPA members already undertake much good work in this area. They lend responsibly and they provide debt advice leaflets to those people seeking credit who may be struggling with their finances”.
“Our debt advice leaflets signpost people to impressive free debt advice services. We also publish our leaflets in the Welsh language and we produce a specific debt advice leaflet for Scottish consumers further to our discussions with the Scottish Government as to the debt advice services that are available”.
“Whilst we welcome the steps being undertaken by the Government, we note that Ministers are consulting as to whether or not debt advisers – linked to the new advice service - needs to be approved by the Financial Conduct Authority (FCA). In our view it is an unequivocal ‘Yes’ that all debt advisers should be approved by the FCA. The regulator has a good ‘Treating Customers Fairly’ policy which debt advisers should follow”.
“We also believe that without FCA authorisation this can inadvertently lead to a legal loophole that dubious businesses can exploit”.
“Unscrupulous debt advisers could try to align themselves with the new service – and in reality push vulnerable people to take out consumer credit products they don’t need or could be counterproductive for their requirements. This risk is mitigated if all debt advisers had FCA authorisation”.
Notes for Editors
- The National Pawnbrokers Association (NPA) was founded in 1892 and is the trade association representing pawnbrokers, from the large chains through to independents, in a £930m loan market growing year on year. It is the authoritative voice of the pawnbroking industry in the UK.
The NPA stands for expertise, fairness and transparency, professionalism and excellence. All our members are bound by our rules and a customer code of conduct. Pawnbroking is part of the credit industry and is regulated alongside banks and other lenders by the Consumer Credit Act 1974.
- HM Treasury published the consultation paper, Public financial guidance review: Proposal for consultation as part of the Budget 2016 documents on 16 March 2016 - https://www.gov.uk/government/consultations/public-financial-guidance-review-proposal-for-consultation