Just had DMC ringing me telling me NOT to go with CCCS.....

ANY_CHANCE

CCCS_Sarah wrote: »

Hi All,

Just thought I would add a little post to clarify things.

CCCS are not losing their charity status and we can confirm all our advice if free and confidential.

We are funded by the credit industry and this is something we are open about. I have attached the link to our website for you to have a read in a bit more detail. http://www.cccs.co.uk/about/funding.aspx

If you have any concerns please feel free to contact CCCS_Matthew or Myself, we will be about today and are happy to help.

Sarah

I use the CCCS and found them very helpful at the beginning, a huge weight lifted off our shoulders. A guiding hand to show us what we should be spending and thankfully sorted payments out with creditors.

All that has been great

Please no one be put off by what i say now but recently (and please dont shout at me as i am just telling the story of what is happening to us now)

one of the creditors is charging outrageous interest which is more than the monthly payments we make, the only advice from the cccs is - well they are within their rights.

another creditors solicitors are threatening court action ccj charging order and order of sale if we do not agree to a voluntary charge - rang cccs for advice and they said they are within their rights to do this and advised us to sign the charge.(even though we are making the agreed monthly payments)

In my opinion, in view that the CCCS is funded by the credit companies are they working totally in our best interests?
I have to say that i was hoping for them to advise that as we were making the payments it seemed unreasonable for interest and the court action to be taking place from the creditors and they would talk to them but nope nothing.

I do feel let down by them and if all they do is distribute payments and provide no legal help then should i do that job myself and find legal advice from the CAB?

Dont get me wrong i would hate to put anyone off going to the CCCS, i just feel that perhaps improvements could be made especially if they are a charity making a profit, perhaps reinvested into legal advice? Who gets the profit is it the government or creditors or someone else?

RakarthIX

Just to try and put a bit of a balance to the "free service" offered by the C.C.C.S.

At the back end of 2006 the OFT had a massive clamp-down on several of the major players in the Debt Management Industry. This was down largely to not informing customers of the potential negative points to debt management and IVAs. As a result advertising had to start mentioning these pitfalls including that a fee would be payable.

Having worked for a debt management company for the last two years in a marketing role I have had a hand in what we say to comply with the OFT and the Financial Services Authority. This now requires us to tell any client exactly what we charge prior to them signing up, ie any up front fees, any monthly fees and any settlement fees.

The C.C.C.S. however seem to somehow be exempt from these rules. They openly admit that they are funded by the creditors, however at no point do they tell you exactly how, unlike DMCs who have to tell you to the penny. The interesting point for me as that people have the opinion that it isn't their money paying the C.C.C.S. and that it is the creditors who pay them. The reality is that if for example you pay £100 to the C.C.C.S. who send this to your creditors. However your creditors then send a proportion of this back to C.C.C.S. The question is, is it 10%, 20%, 30%? Who know's as the dealings aren't in any way transparent.

Yes the C.C.C.S. don't make a great deal of profit, however neither do Debt Management Companies as they have to spend a considerable amount on advertising and lead generation whereas the C.C.C.S. have the majority of their leads passed by the creditors. From a personal view I wouldn't be too comfortable allowing a company, recommended by the people charging me left, right and centre for my debt, to then handle my debt repayments. There is a definate conflict of interest.

On a final point - quality of service. In this modern world time and energy are nearly as important as money. By this I mean that more and more we are willing to pay money to save time. Would you rather queue for an hour at airport check-in or pay a small supplement for fast-track check-in? The same stands with the fee/non-fee DMC companies. C.C.C.S. will set up a DM plan for you and will do all the basics to keep it running. The difference with a fee-paying DMC is that they will set the account up, provide fast, efficient service, look after any legal issues you may have, arrange settlements etc. Basically you get what you pay for - a much fuller, in-depth service from a neutral third party.

rayday2

Any Chance - to be honest I think the CCCS are just being like doctors and lawyers cautious, they can't go telling you everything will be OK and court won't happen because you could be the one in a thousand say that do end up in court.

Also being on a DMP (obviously I am on one) we did sign consumer credit agreements and within those there are probably bits that warn us what will happen if we default - hand on heart I have never read one of these on signing!

But that is not to say that you cannot complain and appeal to credit companies better side, and I have done to some success.

Also it is possible to let CCCS handle the payment side of things and you write your complaint letters etc to get interest back. I think we have to consider that with current financial climets they must be very busy and don't have the time to complain about everyones charges.

rayday2

RakarthIX - sorry but you speak a lot of rubbish, when I approached a fee paying DMC they were not interested in my position at all they were determined to get as much out of me a month to meet the terms of there plans.

They had no legal knowledge at all, and never went though any alternatives apart from pocket lining ones.

newlywed

RakarthIX wrote: »

Basically you get what you pay for - a much fuller, in-depth service from a neutral third party.

How can they be neutral if they are being paid by you? Surely it is in their best interests for you to stay in debt to continue to pay their charges?

And how can you claim it is the client's money that pays CCCS - surely with a fee paying company you pay the full debt plus their fees.

With CCCS you pay the full debt. Full stop. Any monies paid back to them from the banks isn't really the client's money, it's now the bank's money as it is money they lent the client, which is then paid back. What they do with that money is irrelevant - you would still have had to pay it back

In both cases you pay the full debt, just one is without any extra fees.

RakarthIX

rayday2 wrote: »

RakarthIX - sorry but you speak a lot of rubbish, when I approached a fee paying DMC they were not interested in my position at all they were determined to get as much out of me a month to meet the terms of there plans.

They had no legal knowledge at all, and never went though any alternatives apart from pocket lining ones.

Don't get me wrong, I am not speaking on behalf of the entire Debt Management Industry. Without a doubt there are a lot of sharks out there. However they are usually the smaller companies, claiming things like writing off 75% of debt in their adverts. These sort of companies don't have the man power to deal with legal work as well and 9/10 are hoping the client will pay their up-front fees then cancel within the first year so that the company don't have the on-going hassle.

However there are debt management companies out there who are genuinely trying to save their customers money and who have legal guarantees in place to refund all fees should that saving never materialise. They are usually the larger companies who are better set up and regulated by the Financial Services Authority (most DMCs aren't) and as such have a care of duty to ensure their clients get the best possible service, including full legal help as well as the day to day running of the plan.

RakarthIX

newlywed wrote: »

How can they be neutral if they are being paid by you? Surely it is in their best interests for you to stay in debt to continue to pay their charges?

And how can you claim it is the client's money that pays CCCS - surely with a fee paying company you pay the full debt plus their fees.

With CCCS you pay the full debt. Full stop. Any monies paid back to them from the banks isn't really the client's money, it's now the bank's money as it is money they lent the client, which is then paid back. What they do with that money is irrelevant - you would still have had to pay it back

In both cases you pay the full debt, just one is without any extra fees.

DMCs are independent companies who obviously need to be turning a profit to survive, however like I have mentioned in the previous post the regulatory rules governing DMCs are considerably harsher than the ones covering the "charities". As such the larger companies can't afford to behave in an unfair way or they would get stripped of their credit licenses.

The C.C.C.S. are effectively run by the creditors, who make a living out of keeping people in debt. So why would it be in C.C.C.S. best interest to get clients out of debt? The C.C.C.S. don't tend to do full and final settlements, whereas the larger debt management companies (who collect £millions for the creditors each month) have the manpower and the resources to approach the creditors with large sums for final settlement meaning they have a much better chance of negotiating settlements than an individual would.

Also as most DMCs have a charge on settlements they actually prefer to do that. Take for example:

A customer has 4 creditors £20000 debt and can afford £150 a month. After a year they come into some money (remortgage etc.). The DMC negotiates a saving of £8000 which with a 5% fee would be a fee of £400 (customer still saves £7600). In order to get that kind of fee from the client by keeping the plan going the DMC would probably need to keep the client in the plan for a minimum of 2 years. The obvious business sense would be the £400 up front being the better option.

rayday2

Strangely enough it was a large well known DMC not a small timer, and all they wanted to do was get me on there books and take the high percentage off me - which in all cases was higher than the apr on all my debts.

RakarthIX

If you are struggling with your debts you can't afford the minimum payments, therefore APR is irrelevant. If for example you owe £20000 on credit cards all with 15% APR, then minimum payments (2% of balance) would be £400 (with annual interest being in the region of £3000). Now if a DMC takes you on and negotiates repayments to what you can afford, for example £200, then they may take a 15% fee of £30 leaving £170 to go to creditors. £30 over a year is only £360, considerably less than the £3000 interest otherwise paid.

SingleSue

But still £30 less a month going towards your debt which you would reap the benefits of if you went with a non fee paying company.