Debt management firms today attended a summit convened by the British Bankers' Association (BBA) after chief executive Ian Mullen raised concerns over responsible lending last month.
Representatives from the IVA (individual voluntary arrangement) sector joined with BBA spokespeople to develop a set of industry standards.
A Banking Code already regulates behaviour in the banking sector, but the BBA believes the standards of good practice need to be elucidated and implemented for the IVA sector, given the conditions of the contemporary lending environment.
Today's meeting cemented the commitment to work on developing joint definitions of responsible practice, with key areas of concern including how debt management services are promoted and sold.
The BBA last month claimed eight out of ten debt management firms failed to provide adequate information about the costs and consequences of different arrangements.
It now calls for "more honest" advertising practice to prevent advertisements and mis-selling leading people to purchase unsuitable products without getting proper advice.
The third quarter of 2006 saw a year-on-year rise in the number of IVAs taken out of 117.9 per cent.
The BBA hopes the new debt management code of conduct will be in place by spring 2007.To compare credit cards, click here.
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