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Debt advice role for MAS may push levies up 61%

The Money Advice Service is to take over responsibility for the co-ordination of debt advice in a move that could see industry levies rise by as much as 61 per cent.

The MAS has been asked to research and develop a delivery model for debt advice. Industry and debt advisers are due to be consulted on the move, which is set to happen in April 2012.

At an evidence session before the joint committee on the draft Financial Services Bill last week, MAS chief executive Tony Hobman said the current budget is £43.7m but other possible costs are “on the horizon”.

He said: “The Government has asked that we take over co-ordination of debt advice. Currently, the face-to-face contracts run by the Department for Business, Innovation and Skills, through Citizens Advice, are in the order of £27m.”

MAS is fully funded through a levy on the financial services sector. Hobman indicated that cost savings could be made when MAS takes on the new remit in April 2012.

Hobman told the committee: “I think we can get a lot more bang for our buck by being smarter about how we do things.” He said around 10 per cent of people have heard of the MAS but he wants to see 10 million people using the service a year.

He said the success of the service will be measured against a target of 500,000 people carrying out its financial healthchecks and 8 per cent of people taking action as a result of using the service.

Clayden Associates chartered financial planner Daniel Clayden says: “If the industry has to pay the bill for helping people with debt, lenders should be made to pay for it rather than advisers.”

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There are 2 comments at the moment, we would love to hear your opinion too.

  1. What about all the regional debt advice centres already in existence around the country? Will these be scrapped so that the MAS can take on their responsibilities, with the bill, as usual, foisted on the financial services industry?

    Pretty soon we’ll be seeing the cost of most of what the CAB provides billed to us as well, followed by the costs of much of what the SFO does and so on, ad infinitum. Where will it end? The government seems to regard the FS industry as an inexhaustible cash cow with bottomless coffers to fund anything and everything that can be remotely considered to constitute financial services. Having trouble finding the money to pay your gas/electricity/council tax/water rates bill, Mrs Smith? Never mind ~ call the MAS. Their services are free ~ how’s that for a breath of fresh air?

    The only escape from this pernicious madness is to obtain authorisation from a non-UK regulatory jurisdiction. Those who do so will be able quite legitimately to tell the MAS and all the other regulatory quangos where they can stick their levy bills.

    Passporting isn’t FOC but, from what I’m hearing, it’s a helluva lot cheaper than staying here.

  2. Credit advisory service offered to persons with excessive debts as an alternative to bankruptcy. Debt counselors affiliated with the National Foundation for Consumer Credit charge only a nominal monthly fee for helping consumers work their way out of debt. Consumers are budgeted a portion of take-home income to pay off current obligations and voluntarily curb their use of credit until debts are repaid.

    If you want to get more information about it then visit http://www.ideamarketers.com/?articleid=2590443&CFID=50957853&CFTOKEN=43997829 and I am sure you will get more informative information from there.

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