PTDs are a type of insolvency, similar to bankruptcy, which commits the debtor to an agreed payment schedule in return for a substantial write-off of debt and protection from creditors.

Concerns about PTDs, however, were raised during the Economy, Energy and Fair Work Committee’s recent scrutiny of the Debt Arrangement Scheme (Scotland) Regulations 2019 (DAS).

Some people were concerned that PTDs were being heavily marketed and recommended to people in situations when they were not the best debt solution.

One debt adviser said: “We see them being mis-sold time and time again” and the Association of British Credit Unions described them as “one of the biggest issues facing our sector over the past few years”.

The committee’s view on DAS was that debt services should be offered on the basis of an informed understanding of the client’s financial circumstances and best interests.

The committee wants to hear the views of people living with debt and who have experience of PTDs, as well as from debt advisers and creditors.

Citizens Advice Scotland (CAS) financial health spokesperson Myles Fitt said: ‘This is a welcome move from the committee. The Citizens Advice network in Scotland helps hundreds of thousands of people each year and debt is one of the biggest issues we see.

“We are concerned that the protected trust deed market is concentrated in the hands of a few firms and they are often “sold” as a debt solution through lead generating firms, who do not give advice on other debt options.

“Our advisers see people who have entered into protected trust deeds which are unsuitable for them and which leave them out of pocket and worse off than when they started.

“We think that the lead generators should come under FCA regulation and be required to give impartial advice on all the debt options available to a consumer.

“We would encourage anyone with experience of protected trust deeds and lead generators who have cold called them to submit their views to MSPs.”