Scottish Parliament Committee calls for significant changes to Protected Trust Deeds
The Scottish Parliament’s Economy, Energy and Fair Work Committee has published a report calling for the Scottish and UK Governments to act to address serious problems in the Protected Trust Deed market.
The Committee launched an inquiry into the debt solution earlier this year, and heard evidence from from a range of people including Karen Hurst, ABCUL’s Policy Officer for Scotland as well as written evidence from others in the sector.
Despite much of the evidence being disputed by those representing insolvency firms, the Committee has today set out concerns about how Protected Trust Deeds are operating in Scotland. The report makes a number of recommendations, including supporting ABCUL’s call for an increase in the minimum debt level for Protected Trust Deeds, and a new rule banning Insolvency Practitioners from prioritising their own fees above returns to creditors. The committee also called for all advertising to be subject to FCA regulation.
ABCUL’s CEO, Robert Kelly said: “We fully welcome the committee’s recommendations, and look forward to working with the Scottish Government to discuss how they can be implemented. It’s been clear to us for some time that the Protected Trust Deed market is causing significant harm to many, and we feel these measures would go a long way to addressing the problem”.
Committee Convener Michelle Ballantyne MSP said: “A debt solution should work in reducing that person’s debt. We heard evidence which showed that fees were being frontloaded resulting in the overall debt not lowering despite payments being made. This needs to change.
“The Committee welcomes the Scottish Government's commitment to conduct an overarching debt review. However, it is incredibly important that the Scottish Government listen to the Committees recommendations to ensure that protected trust deeds act as an effective debt solution and debtors are safeguarded from the potential harm that can be caused when things go wrong.”