LONDON; Jan. 28, 2011 – New proposals to help people in financial difficulties would streamline the process of debt management and deliver a better and fairer deal for customers, said the British Bankers’ Association and Accenture (NYSE:ACN) in a report published today.
The report, A New Model for Dealing with Personal Debt says that a clearer range of options for people working to resolve their debt would avoid confusion and worry. The report calls for greater consistency in the way debt advice is provided and in how creditors deal with customers in financial difficulties, in order to ensure fairer and more consistent results. It recommends changes in four key areas:
- creation of a single body to regulate debt advice, with a single debt management licence and sole responsibility for delivering a national over-indebtedness strategy;
- simpler debt remedies, and increased emphasis on early intervention and resolution;
- better use of customer information to identify people at risk of losing control of their debts, to offer early help; and
- helping customers to help themselves by improving financial education and providing a single, online debt advice portal.
Paul Ross, BBA policy director and co-author of the report, said: “Our vision is to provide a clear and coherent process to help people facing debt difficulties, to intervene early where possible and to provide a simple debt resolution solution if those early attempts do not succeed. We want to unravel the red tape to bring about a more financially responsible solution for customers.
“Customers are currently faced with too many confusing options for resolving their debt, and may set out too early on expensive legal procedures when a more common sense approach would be better for everyone.”
David Parker, senior executive in Accenture’s Financial Services operating group and co-author of the report said, “As the Government considers changes to consumer credit regulation, now is the right time to get real change under way and ensure that there are effective safety nets for consumers in financial distress. The changes we are proposing will have a fundamental impact on the way debt is managed through the rehabilitation of debtors and the prevention of new or repeated debt behaviour. However, agreement to implement a new debt management framework must be reached by all relevant stakeholders, including the government, regulatory and advice bodies, as well as lenders and borrowers.”
Notes to editors
The paper was produced as a contribution to the Department for Business, Innovation and Skills’ review of consumer credit and personal insolvency.
About the BBA
The BBA is the leading trade association for the UK banking and financial services sector. We speak for over 200 member banks from 60 countries on the full range of UK and international banking issues.
Accenture is a global management consulting, technology services and outsourcing company, with approximately 211,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$21.6 billion for the fiscal year ended Aug. 31, 2010. Its home page is www.accenture.com
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