Treasury takes CAB to different level

The Citizens&#39 Advice Bureaux, money advice centres and charities will not fall within the regulated mortgage regime as they are not carried on “by way of business”.

While many respondents to the latest consultation on mortgage regulation agreed that money advice agencies should not be regulated in principle, some say a specific exclusion will have to be written into the legislation.

The Treasury acknowledges that it “cannot say categorically that all money advice centres, the Citizens&#39 Advice Bureaux, charities and so on are not carrying on the activity by way of business as this will depend on the circumstances in each individual case”.

But it refutes the need for a dedicated exemption, saying that factors such as whether clients pay for advice “points to the Citizens&#39 Advice Bureaux and others not being caught even without a separate exclusion”.

Factors taken into account include whether a person provides a service without any expectation of reward or payment; whether clients pay for the advice; whether the individuals giving it are paid; the frequency with which the activity is carried on and whether the body advertises its services.

Some respondents stressed that consumers should receive advice from competent regulated advisers and that many people who used such organisations were vulnerable.

Mike Fry, director of Widnes-based Halton Insurance Service, says: “You cannot be an oracle. People go into the CAB with umpteen different questions. Most people who go are not very switched on and giving the CAB staff carte blanche to advise people technically is not right.”

But Simon Bottery, spokesman for the National Association of Citizens&#39 Advice Bureaux, says: “We support the Treasury&#39s decision. We responded to the consultation along these lines and understood that it was not the government&#39s intention to regulate the CAB anyway. It seems that it has come to the right conclusion.”