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Prime Minister unveils real help for consumers


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Issued Date: 17 Mar 2009

The Prime Minister today announced a package of real help and protection for consumers struggling to make ends meet because of the global downturn.

Speaking to an audience of consumer groups and money advice agencies, he announced action to prevent people getting trapped in a cycle of debt, measures to ensure fair treatment by courts and debt-enforcement agencies, and a crackdown on scams and get rich quick schemes.

He also set out his commitment to a stronger regulatory regime for banks and announced a White Paper on modernised consumer rights law to give people a fairer deal.

Prime Minister Gordon Brown said:

"The changes we're dealing with as a country right now are enormous. But we are determined to do our bit - when we see hard-working, hard-pressed people being buffeted about by a storm not of their making, we will never pass by on the other side."

Chief Secretary to the Treasury Yvette Cooper said:

"It is vital that people who are facing money worries know where to turn to for help. Today's announcement will boost the substantial help and advice we are already providing, so people can get help to cope with the downturn and to plan for the future."

Consumer Affairs Minister Gareth Thomas said:

"Many people are already struggling to stay on top of their bills and pay their debts. We want anyone in difficulty to be able to access the advice they need. We are taking action to ensure consumers are treated fairly and to put them back in control of their finances."

The Government today set out a package of real help to benefit consumers during the downturn:

* Fair rules for debt enforcement - new measures will be introduced to provide clarity for debtors and certainty for creditors in advance of full independent regulation of the bailiff industry. Bailiffs' powers of entry and force will not be extended and reforms to charging orders will not be introduced. There will be consultation which will set out the new rules and the way forward.

* Credit cards - the Government will stop lenders from raising credit card borrowing limits where customer have not requested the increase, and it will end the practice of firms sending unsolicited credit card cheques. The Government will legislate at the earliest opportunity.

* National Fraud Strategy - later this week the Government will set out the action it will take to tackle fraud which costs the UK 14 billion a year, and protect consumers from mass marketed frauds such as bogus lotteries, get rich quick schemes and investment scams.

* Debt Relief Orders - from April, people on low incomes with limited debts who could not previously afford to go bankrupt will able to write off their debts and start again after a period of 12 months. This is not an easy option for people in debt - the insolvency will be a matter of public record and creditors will be able to apply to have the order revoked. But it will help those trapped in poverty.

* The Money Guidance pathfinder - impartial sales-free advice on money issues will be available in the North West and North East of England from next month. It will help people stay in control of their finances, help them cope with income shocks and avoid the distress of problem debt.

* Debt advice - the Government is currently reviewing the provision of debt advice to tackle any gap between capacity and demand and ensure we get the most out of the existing network of providers. This work will conclude before the summer. The Government invested 15.85 million in the debt advice sector at the last Pre-Budget Report in addition to the 130 million invested since 2006.

* Mortgage advice - making 2.5m available for advice agencies to support the delivery of the new Homeowners Mortgage Support scheme.

And to safeguard a fairer deal for consumers in the future, the Government will:

* Lead the way internationally with reform and regulation of the banking sector to clean it up and make it deliver for consumers. The Turner Review will set out proposals for further strengthening the FSA and protecting savers' deposits, the Treasury will publish a White Paper on financial services regulatory reform around the time of the Budget, while the forthcoming Walker Review will make recommendations to improve corporate governance, with particular regard to risk management and remuneration.

* In light of the Turner Review and the current OFT consultation on strengthening consumer protection, we will review the split of responsibilities between the FSA and the OFT for the regulation of second-charge mortgages.

* Publish a White Paper on action to help consumers in the summer - with proposals to simplify and modernise consumer rights.


Government action to boost advice and tackle indebtedness:

* The HMT-sponsored Face-to-Face Debt Advice Project has provided a step change in the availability of advice provided free to clients in England and Wales, with around 500 new debt advisers. The funding has resulted in over 193,500 clients receiving free face-to-face debt advice to the end of December 2008. The funding has been targeted at helping the most highly financially excluded areas and social groups.

* In the 2008 Pre-Budget Report the Chancellor also announced additional funding of 10m for Citizens Advice up to March 2010. This funding has enabled around 250 Citizens Advice Bureaux to open additional hours in February and March 2009, with over 70% of Bureaux expected to benefit from this extra funding.

* BERR has contributed 1m per year since 2003-04 to the National Debtline. In the 2008 Pre-Budget Report, the Chancellor announced an additional 5.85m for National Debtline in the spending period to March 2011.

* The Ministry of Justice runs debt advice outreach projects and the Community Legal Advice phone line. During 2007-08, Community Legal Advice's specialist advisors handled 21,939 debt advice matters. The Legal Services Commission (LSC) continues to fund free face-to-face debt advice for eligible clients. During 2007-08 the LSC funded 87,999 case starts in debt.

* The LSC also funds schemes offering those facing a housing possession hearing in the County Court the opportunity to access emergency advice and representation and are open to all regardless of means.

* The Government and FSA are implementing Helping you make the most of your money: an action plan for financial capability including the Money Guidance pathfinder and embedding financial education in schools.

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Crown Copyright. Material taken from the BERR- Department for Business, Enterprise and Regulatory Reform replacing DTI - Department for Trade and Industry. Reproduced under the terms and conditions of the Click-Use Licence.

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Article Published/Sorted/Amended on Scopulus 2009-03-18 14:15:19 in Business Articles

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