Simon Read: Dodgy debt advisers will cash in on Coalition cutback of free help
Saturday 05 February 2011
Scrapping the Financial Inclusion Fund from March is one of the Coalition's most disastrous moves in its cutback campaign. People will need debt advice more than ever as the cutbacks bite, but official support will shrink when the money runs out next month.
The Citizens Advice Bureau is being forced to make 500 specialist debt advisers redundant as a result of the cutbacks, for instance. Meanwhile demand for debt advice could increase from 1.6 million people last year to more than 2 million this year, according to the Money Advice Trust.
Stepping into the void rubbing their hands with glee will be the numerous debt management companies which see the chance to make a quick buck at the expense of the hard-up. The Office of Fair Trading is fighting a tide of these dodgy advisers which make money from the fees they charge desperate debtors.
The OFT shut down 35 of the firms last month but there are hundreds more out there. The OFT should act to control them now before more suffering families are pushed to the edge. And more should be done to publish the free advice that remains from the likes of the CAB, National Debtline and the Consumer Credit Counselling Service.
EDF Energy is increasing gas bills on average by 6.5 per cent and electricity bills on average by 7.5 per cent per cent from 2 March. The company is the last of the big six energy suppliers to increase bills, which is to its credit. But the timing of its move stinks. Why? Because the firm has spent the last three months boasting about its promise not to increase energy bills over the winter.
In fact the company pledged "to keep standard gas and electricity prices for residential customers at their current levels this winter, until at least the start of March 2011". That's a telling "at least". It suggested the firm may review its pledge. But it seems its intention always was to increase prices as soon as it could.
The "promise" may have encouraged people to switch suppliers. However, anyone who did so may now be with the wrong supplier. According to uSwitch, British Gas will have the smallest average bill once the increases are introduced.
EDF's price promise was just another weasely short-term gimmick aimed at persuading customers to switch. The fact that EDF's price increase is in line with that of its five main rivals adds more weight to calls for government scrutiny into energy prices and profiteering.
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