The statement follows last week’s warning from the FCA that debt packaging firms were showing “poor standards” of operating which include prioritising referral fees over customer advice.
The regulator sent a Dear CEO to the heads of debt packager firms warning it was “very concerned” about the sector’s practices.
Peter Dean, co-founder and director, Your Expert Group, said the arrival of more specialist lenders north of the border offering wider choice, specialist underwriting and better rates means there could be better options than the insolvency route.
This week, the Accountant in Bankruptcy (AiB), an executive agency of the Scottish Government, revealed that between July and September this year, the number of personal insolvencies in Scotland rose by 23% year-on-year.
Sharp rise in insolvencies
Dean said: “It’s disappointing to see such a sharp rise in insolvencies in Scotland, with Protected Trust Deeds, a form of personal insolvency, up 42% on the same quarter last year.
“While these plans will be the right option for some, the message we’re keen to get out to the Scottish broker community is that the much more competitive second charge products being offered by the new lenders launching here are another viable solution.”
He added secured loans could be a far more palatable alternative for struggling homeowners than entering an insolvency process for potentially many years.
Peter Dean and Derek McPhail sold debt advice firm Carrington Dean in 2017 and established Your Expert Group to provide a ‘corporate approach’ to debt advice.
Data showed 326,897 people contacted UK debt charity StepChange in the first six months of this year.
The charity said 18% of those seeking help were home owners against 62% of the general population and 30% of those seeking help were behind on Council tax, the highest category of debt arrears.