On 22 March 2016 the Financial Ombudsman Service (FOS) published issue 132 of Ombudsman News. Issue 132 considers things that can go wrong with cars and debt management issues in detail. The case studies highlighting the things that can go wrong with cars focus on financing issues and problems with insurance.
In relation to debt management, the Citizens Advice Bureau (CAB) estimates that there are over 4,000 new debt problems each day. Topics under discussion include:
- The deeply personal nature of debt, the fact that debtors tend to be reserved with regards to levels of personal debt and may feel embarrassed about contacting professionals.
- The behaviour of debt managers some of whom fail to comply with FCA rules which results in vulnerable people being treated unfairly. Such behaviour includes directing debtors’ payments to debt managers’ fees rather than toward the debt itself, “debt-reduction strategies” that can be complex for debtors to understand and relaying unrealistic goals to debtors by which debts can be paid off.
- The fact that large numbers of debt management companies have left the market or have gone out of business altogether.
- The trend for debtors to pay debt management professionals despite the plethora of free services available. This problem is compounded by claims management companies contacting debtors despite the fact that it is not necessary to pay in order to complain.
The Q&A section of the report covers the “next business day” rule, which will let firms resolve informal customer complaints by the end of the third business day from 30 June 2016 and discusses the quantity of information that must be sent to FOS when a customer raises a complaint.