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Debt management trade body completes first stage of OFT Consumer Codes Approval Scheme

121/05    5 July 2005

The Debt Managers Standards Association (DEMSA) has become the first debt management trade association to successfully complete Stage One of the OFT's Consumer Codes Approval Scheme (CCAS), which aims to promote and safeguard consumer interests (see note 2).

By completing Stage One, the DEMSA Consumer Code has met the OFT's core criteria in principle. To achieve OFT approval, the second stage will involve testing the code to see whether it is working effectively in practice (see note 3).

The DEMSA Code of practice promises to provide the following benefits:

• a set of comprehensive monitoring procedures including inspection visits by independent inspectors, a mystery shopping exercise, checks on marketing, advertising and web sweeps
• a conciliation service to handle consumer complaints if a member's own complaints procedure does not resolve an issue
• an independent redress scheme (arbitration)
• a newly introduced independent disciplinary panel to ensure that the code is complied with and enforced
• regular customer satisfaction surveys so that problem areas can be addressed should the code fail to deliver on its promise
• protection of all clients deposits or prepayments by the use of separate ring fenced accounts
• an obligation on all members to use fair terms and conditions
• clear written pre-contractual information for customers
• a requirement on members to have in place satisfactory provisions for dealing with vulnerable consumers.

DEMSA will now be invited to provide the OFT with evidence that these processes are working in order to achieve OFT approval. Codes are approved only once they demonstrate they are effective in promoting consumer interests beyond the minimum required by existing consumer protection law. Code sponsors and members of the OFT approved codes can then be licensed to display the OFT Approved code logo. They will also benefit from the OFT's promotion of approved codes and the CCAS.

In acknowledging the completion of Stage One, Penny Boys, OFT Executive Director, said:

'I welcome the steps taken by DEMSA and its members in developing their code of practice to ensure greater consumer protection for their customers, and very much appreciate the commitment and hard work that has made this possible.'

NOTES

1. DEMSA is a trade association for the debt management industry.

2. The OFT's CCAS aim is to promote and safeguard consumers' interests by helping consumers identify better businesses and to encourage those businesses to raise their standards of customer service. The core criteria cover the organisation of the code sponsor, the preparation and content of the code, complaints handling, monitoring, compliance and publicity.

3. The CCAS consists of two co-dependent stages:

4. See the Consumer Codes Approval Scheme section on this website for further information.

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