/ Money

Is Citizens Advice worth fighting for?

Super complaints are like buses – you wait ages for one and three come along at once. But as their heroic name suggests, they’re vital. The latest, from Citizens Advice, proves how important its services really are.

If the financial services industry can’t self-regulate and treat its customers fairly, someone else has to step in for the consumer and ask the Office of Fair Trading to take action.

Last year saw Consumer Focus submit its super complaint on Isa transfer times, while Which? announced a couple of weeks ago that we’ll be submitting a super complaint about ‘rip-off’ debit and credit card surcharges.

Citizens Advice has now completed the consumer champion trio, submitting its own super complaint about unethical lending practices in two key areas:

  • Firms cold-calling consumers by telephone and text to promote consumer credit products, including debt management.
  • Firms taking upfront fees for credit services, often by persuading consumers to give them their banking details, sometimes taking unauthorised deductions.

Not many organisations have the power to submit a super complaint and these powers aren’t used lightly. Which?’s surcharge super complaint is our first in four years and the Office of Fair Trading has just 90 days to explain how it plans to investigate.

A worthy complaint

I fully welcome Citizens Advice’s intervention in this market. The charity estimates that between 5.5 and 6 million households are either in arrears with bills or credit commitments and are finding it a constant struggle to keep up.

Affordable credit is near-impossible to get hold of, leading many to apply for payday loans that charge rates breaking into the thousands of percent. Others turn to credit brokers who put on the hard sell and charge an upfront fee for their services.

In too many cases they don’t find you an affordable loan, and don’t refund your payment, leading you further into debt, and even more vulnerable to the clutches of commercial debt management companies.

We need Citizens Advice

The timing of Citizens Advice super complaint is especially poignant at this time when its own funding is severely squeezed. Organisations such as Citizens Advice, the Consumer Credit Counselling Service and National Debtline are needed more than ever at the moment, dealing as they do with consumer problems at the coalface.

There’s some evidence that local councils are starting to recognise the true value of free advice services. For example, amidst budget cuts of some £42bn, Brent Council this week voted to reinstate funding for the local Citizens Advice Bureau (CAB). Let’s hope other councils, as well as the government, show the same forethought.

Have you used your local Citizens Advice Bureau? Would you defend it as a vital service, or are you not bothered by its funding getting cut?

Jenny Howard says:
1 April 2011

I wonder if people realise how much training CAB volunteers have to undergo? A friend who volunteers for CAB says it’s equivalent to studying for an A level. It’s not just a hobby for well-heeled do-gooders with time on their hands. I think it’s shameful that the goverment won’t provide adequate funding to support these dedicated people who are giving so much. Big Society? Put your money where your mouths are, Mr. Cameron and Mr. Osborne!