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Debt Management Companies not paying your creditors


john henderson
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I had an interesting chat with a colleague last night regarding the debt management company they work for. From what they said about the company, sounded like they really are a bunch of cowboys leading people into further debt.

They have already had a run in with the Financial Ombudsman Services on numerous occasions, although this has only been verbally. Their operation works on the basis that they consolidate debts, charge you for the first 3 payments of that consolidated debt and then charge 17.5% or more administration fee on every payment. Better still they take this payment of your credit card putting you further into debt.

Not a bad little earner for these cowboys, but if you have thousands and thousands of customers in the same boat that’s a lot of money being made. I guess its big business so any one in debt is a potential customer to them and they will go to any length to get you as a so-called ‘customer’ by paying staff bonuses for every customer they convince to come on board.

 

These companies are sharks as they imitate/copy charity debt management web sites to get you on their system. Again the FOC has clamped down on many debt management companies for this fraudulent practice.

Finally, to add more problems to the pile, some of these debt management companies are not even paying the actual creditors of their customers.

They are simply stealing your hard earned money and putting you into further debt.

I know we all want to get out of debt but try and check out the company that is offering you the service. Check out the Debt Managers Standards Association (Demsa) for legitimate Debt Collection companies to pay your debt to. Ignore what you read on web sites as they are the ploy to pull you in. If the web site says it is a charity check it out, first. If your simply not sure contact the FOC and ask them.Dont let these companies put you further into debt. :!:

 

 

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The advice given by CAG is never to use a fee charging DMP when there are two free (to the customer) ones out there. CCCS and Payplan.

If anyone is thinking of going to a fee charging Debt Management Company they would be advised to first have a look at the OFT website

 

http://www.oft.gov.uk/news-and-updates/press/2010/101-10

 

Then after reading that-DON'T GO TO A FEE CHARGING DEBT MANAGEMANT COMPANY

If you are asked to deal with any matter via private message, PLEASE report it.

Everything I say is opinion only. If you are unsure on any comment made, you should see a qualified solicitor

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