I am currently attending, and presenting at, the 7th China International Credit & Risk Management Conference in Nanjing, and it is interesting to note how the topics of debate have shifted since my last visit 12 months ago. There is much more discussion, for example, around the move to open account payment terms rather than letters of credit for international trade, and the move towards alternative sources of finance such as factoring - a conversation that mirrors our own experiences back in the UK.
It is noticeable, also, that there is increased availability of credit ratings within China on Chinese companies, and a clear desire for skills to support selling into the West rather than skills and knowledge simply for use in the domestic market.
We know that there is a rapidly expanding middle class in China, and this is placing increased demand on the trade and availability of expensive consumer goods. What is interesting, however, is that there are no personal insolvency rules or procedures in China, leading me to think about the OFT's recent warning to 129 debt management firms in the UK: http://oft.gov.uk/news-and-updates/press/2010/101-10
The report makes salutary reading and the paid advice sector evidently needs to do considerably more to clean up its act. We have ourselves spoken to the Debt Resolution Forum which is working hard to drive improvement. I sit on its Complaints Committee and there have been very few complaints. It is important that bad practice is highlighted, so remedial action can be taken.
Some ICM Members are asking me why the firms shouldn't be publicly named and shamed. The reason is simple: they can't, under part 9 of Enterprise Act 2002. That does not mean that we will never know their identity, however. If they fail to improve, and the OFT decided to take formal licensing action, then their names will be published for all to see.
A clean-up of the paid advice sector is long overdue. In one of my own blogs I've always advised that people in difficulty approach a reputable charity, but those charities don't advertise aggressively - and they don't offer to do six impossible things before breakfast, so that their realistic advice can be very unattractive in comparison with the 'solutions' that are offered elsewhere. I do think, too, that the fact that charities offer free advice can work against them; 'free' still tends to equate with 'worthless' in some cases for some people. As for complaining - how many people who have fallen victim to paid advice sector firms know how to complain, and to whom?
ReplyDeleteThe OFT should take formal licensing action - and as soon as possible.