Your views and questions.

Moderators: TalbotWoods, JaneClack

User avatar
By TalbotWoods
#314643 ALL COMMENTS WELCOME

ESPECIALLY REAL EXPERIENCES OF THESE COMPANIES


More and more people are failing their Debt Management Plan (DMP) each year, and many of these people have one thing in common, they are with a fee charging Debt Management Companies.

New research carried for the Lloyds Banking Group, and the charity Money Advice Trust by Loughborough University, found that this was mainly due to the poorer methods being used by firms that charge. This is on top of the extra costs associated with the plans, often hidden as administration charges.

The study interviewed 1,003 people including those either in DMPs, (sometimes disguised as other plans; some of which were inferring that the scheme was formal when they were not), or who had been in one in the past five years.

One respondent was paying £400 each month into a debt management plan, of which £300 was being kept as a fee/administration charge by the debt management company; another was charged an astronomical £662 set up fee before even a single penny went to the creditors. Unfortunately these are not uncommon practices.

What was found though was that people who were on a free to client Debt Management Plan, such as those run by Payplan and CCCS, had a much better chance of succeeding with their plans, primarily because they knew all their money was going to the creditor, knew what was happing with their plans, had income and expenses worked out correctly and were able to vary and adjust their plans as circumstances changed.

Joanna Elson, Chief Executive of the Money Advice Trust said:
“People deal with unmanageable debts in a variety of ways, but far too few people take the one step that stands the best chance of making a real difference, that is seeking free, independent advice. When people do take the brave step of confronting their financial difficulties, we owe it to them to ensure they stand the best possible chance of finding a fair and sustainable way back to financial health.”

Some other findings that came to light, included:

  • Fee Charging companies adopting a ‘skimmed surface’ approach to budgeting, with little or no discussion about affordability, and in some instances the company had taken the paperwork and then TOLD the client what they wanted each month!
  • Fee Charging Companies were deliberately putting people onto plans, when alternatives such as bankruptcy or DROs are more appropriate. Additionally they were not entering into discussions with the client to offer support and help in improving financial situations.
  • A number of the fee charging companies organising Debt Management Schemes, failed to make any payment to the creditors, before entering into bankruptcy themselves or disappearing because they are unlicensed and bogus.

It has and always been accepted that people can use either free or fee charging companies, but a couple of thoughts come to mind with this slice of news:

  • How will creditors and DCAs look on it, will they hassle and refuse to accept people who are using fee charging companies. Very possible.
  • Will the creditors and DCA’s be more accepting and work with the clients of the free to client Debt Management Plans, like those offered by Payplan and CCCS. Very Probably.


If you are with a Fee Charging Debt Management Company now, and would like to look at real alternative options, then we suggest you contact one of the companies below, who will ensure that all your monthly payments reach the creditor.

If you are thinking of looking at entering into a Debt Management Plan, then again please contact one of the organisations below, who will not keep your money.

PayPlan: Is a national organisation with approaching 20 years of experience in dealing with all kinds of financial situations, no matter how bad they are. Their advice and help starts with a simple phone call to 0800 280 2816

CCCS Is an organisation that advises you on available solutions with your financial problems. You can contact them on 0800 138 1111

[Sources:
Money Advice Trust: http://www.moneyadvicetrust.org/content.asp?ssid=175
Credit Today: http://www.credittoday.co.uk/article/14 ... ly-to-fail ]
By nigpet
#314663 I'm at a loss as to why anyone uses a fee paying company when exactly the same service is available free, unless they've been effectively defrauded into believing a fee paying outfit can somehow do more than payplan / cccs can do.
User avatar
By TalbotWoods
#314703
nigpet wrote:unless they've been effectively defrauded into believing a fee paying outfit can somehow do more than payplan / cccs can do.


Not unheard of! :shock:
By wisernow
#314753 Yes it baffles me why anyone would touch one of these fee charging companies.I am with payplan who have been brilliant and once the plan was in place had no hassle from any creditor,just statementa and f&f letters occasionally.
On the charity work i do i sometimes meet people in financial difficulty and i recommend Payplan to them and the feedback is always good.
when i ask people why they are with a fee charging company they often dont realise it,or not done any proper research.
I am surprised Payplan is not mentioned more in the media more in features about financial hardship
By nomlas
#314793 A friend of mine who I had confided in regarding my dire financial situation took me to see a financial adviser/accountant who he had known for years and was full of praise for him. The FA offered to set up an IVA, I was already on a DMP with CCCS (only just started) and took the the relevant leaflets, I&E etc. The FA said "there is no such thing as a free lunch" and "you get what you pay for, I would not touch these so called free agencies with a barge pole".

Fortunately I had found this site and never went for it. It is only too easy to fall for the advice of proffesionals, we should always remember they are in it for the money.
By royston
#315023 Yes, I can hold my hand up as say that I initially started with a fee paying company - but only for a month. At the time I didn't know about PayPlan, CCCS etc., and thought we were doing the right thing.

Luckily, this forum opened my eyes and we went with PayPlan.

I did go to CCCS firstly to start a DMP but they became very muddled with the figures I provided and ended up giving me useless information. I gave them all the figures regarding outgoings but they were saying that there wasn't sufficient left over to use for a DMP which was down to an error on their part, which gave me no confidence in them. PayPlan on the other hand were excellent and set up a DMP very promptly. We haven't looked back and they are always helpful.
User avatar
By DuffNCustard
#315073 What was found though was that people who were on a free to client Debt Management Plan, such as those run by Payplan and CCCS, had a much better chance of succeeding with their plans, primarily because they knew all their money was going to the creditor, knew what was happing with their plans, had income and expenses worked out correctly and were able to vary and adjust their plans as circumstances changed.


Yes and no thanks to the antics of Lloyds and their Mitchells Stitch-You-Up McCumflip in house collections department and lets not mention their call centre in the Punjab or wherever.

I was fortunate in not having these cowboys as one of my creditors, Mr Duff on the other hand does. It took him and Payplan both in concerted and sustained effort to wrestle this shower into submission. They applied charges, larded on interest and then took it all off again - the balance owing was up and down like a whores drawers.

Lloyds - phah I SPIT ON YOU - and by the way all those letters you now send me pleading for my custom - well I'm very attached to my money and I like to keep it right under the mattress JUST LIKE CHANDJAY RECOMMENDS
By nigpet
#315123 The reponse to those who knock free outfits such as payplan or CCCS is that they aren't free at all, they're charities paid for by contributions from others (financial industry etc) & that's why they end up getting so many creditors back in their cages...they know people are dealing with reputable organisations who are NOT skimming off fat profits for their next mercedes.
User avatar
By DuffNCustard
#315173 Spot on Nigpet - and why would a 'Financial Institution' contribute to one of these charities and then ignore them? That's why Lloyds leave me completely stumped - but then perhaps expecting a rational and logical approach is naive.

Another advantage of using Payplan, CCCS or National Debtline is that the courts recognise them. Mr Duff was asked by The Old Beak - have you taken advice? Mr Duff stated that as soon as he realised he had a debt problem he called Payplan who advised him to set up a DMP - which they run for him. The Old Beak nodded vigorously in approval 'very good very good' and asked Restons some pretty probing questions - really made them squirm. He accepted the I&E supplied by Payplan and refused to let Restons query it. He also set the CCJ payments exactly as Payplan had calculated them, much to Restons' chagrin!