The British government is initiating a consultation about the future of debt management companies, which at present are largely unregulated Unscrupulous debt management companies charge unreasonable rates of interest from borrowers as the schemes that aim at helping those struggling to return their debts are mostly unregulated.

At present, the number of debt management firms has soared to 150 as compared with 40 in 1999. Moreover, around 150,000 people resort to those debt management schemes every year.

The government has launched an initial consultation to introduce possible legislation to protect those who sign up to the schemes.

Ian Lucas, business minister, said, "We want a system which is fair to everyone involved so that debt problems don't spiral out of control."

According to the Ministry of Justice, potential regulation could lead to companies to being fined, suspended or even shut down.

(Via TopNews United Kingdom. Contributed by Gurpreet Singh)