Consumers in need of debt advice due to SRBs get helping hand
Consumers in need of debt advice due to SRBs get helping hand
Thursday 4th June 2009
The SRB market is currently unregulated and only 42 per cent of people know this according to a recent poll conducted by the FSA. This means that many of the people turning to such schemes are not protected by the Financial Ombudsman Service.
According to the study, the majority of those polled mistakenly though that they would be allowed to stay in their homes for more than five years yet typical SRB contracts are normally six to 12 months.
More than half (58 per cent) want the sector to be regulated and their wishes have been answered in the form of the new regulations, which come into force in July 1st.
Explaining how the system will work, FSA head of mortgage policy Ed Harley said that companies entering the regime "will need to run their business in a way that means customers are treated fairly.
"We know that some consumers enter into sale and rent back arrangements without understanding the costs and risks involved. This can be a source of real distress for people in already difficult circumstances," he said.
From July, the businesses will be required to ensure customers understand vital clauses, such as the length of time they can stay in the property, before they sign up.
Latest figures from debt charity Credit Action show that the average household debt in the UK, including mortgages is just under £60,000.
News article brought to you by Debt1 – UK debt management specialists.
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