Ministers are also looking at whether existing provisions in the Financial Services Act 2010 allowing the Office of Fair Trading to apply a levy on consumer credit licensees and applicants to contribute to funding the Money Advice Service should be used, Hoban said.
“Government are currently considering how the funding and provision of publicly supported debt advice can be put on a sustainable footing, for the future,” he said in reponse to a written Parliamentary question.
“These considerations include the possibility of the Money Advice Service taking on responsibility for the co-ordination of debt advice services.”
Hoban’s statement comes before a crackdown, due to begin this week, by the Office of Fair Trading on debt advice companies.
The OFT is expected to impose widespread bans on misleading advertisements, strict rules for handling clients’ money and an end to the use of cold-calling people with money worries.
Up to half of Britain’s 300 or so debt advice firms could choose to close rather than submit to the stringent new regime, according to reports.
The Treasury minister made the statement in a written answer to a Parliamentary question targeted at the Chancellor of the Exchequer George Osborne.
Justin Tomlinson, Conservative MP for North Swindon, asked what steps the Chancellor plans to take to ensure sectors which benefit from repaid debt – other than financial services – contribute towards the funding of debt advice if responsibility for it is transferred to the Money Advice Service.
IFAs have called for debt management to be regulated on a par with advice, after a series of firm failures which they say damage the reputation of the wider financial services industry.
The latest to go bust was debtDr, the high-profile firm founded by Jeremy Hockley which folded in April, with still no details available about the whereabouts of client money
