Insolvency trade body warns of dangers of turning to unregulated advisers for financial advice
The insolvency trade body R3 is warning individuals struggling with debt only to take guidance from licensed and regulated advisers – turning to unscrupulous and unlicensed debt advisers could actually make their situation worse.
In a new guidance document published by R3, it explains that people struggling under the weight of debt who take advice from unlicensed advisers run the risk of being charged for services which do not lead to positive outcomes and which can subsequently make it more difficult to reach workable repayment arrangements with creditors.
Andrew Davenport from Sheffield-based Maxim, says: “While it’s understandable that people facing mounting debt are desperate to get help, we are urging them not to be tempted to listen to unlicensed advisers who claim to offer a pain free ‘quick fix’. Often problems with personal finances have built up over a number of years and dealing with the underlying issues which have caused them takes time. Unfortunately, there is no easy solution – the important thing is to take the first step of recognising that there is a problem and seeking reliable, expert advice from someone with the right qualifications, like a licensed insolvency practitioner, before the situation escalates out of control”.
“If you are unable to keep up with creditor demands, don’t bury your head in the sand, face up to the situation, whether this means coming to an informal agreement with your creditors which will give you the time to pay off your debts; arranging a debt relief solution suitable for your circumstances; or even entering a formal insolvency procedure. Most licensed insolvency practitioners offer free initial consultations and as specialists in insolvency issues, they are able to offer unbiased, expert advice.”
Mr Davenport adds: “Not only are unlicensed advisers practically unaccountable as their activities are unregulated, but they simply may not have the knowledge or experience to understand the complexities of an individual’s particular situation and the full range of options available to them. By following their advice, there is a real risk that an individual may take the wrong action about how to resolve their financial problems and may even break the law by not undertaking their legal duties or responsibilities to the people to whom they owe money.”