Debt Management Companies, Apply with caution

daveA1_2

Like many other people in this country I found myself in a lot of debt in a short space of time when I lost my job in November 08. I have always managed to manage my debt because I always had some sort of stable income. My level of debt was not high enough for an IVA nor was backrupcy an option, to make matters worse the owners of the house I was renting was having the house repossed and I found myself with a two months notice period. It was a very grim christmas.

I started to look for ways I could manage my debt with only JSA to rely on. I spoke to the bank (lloyds TSB) to tell them I could no longer afford the two loans (total of £21000) and an ovedraft which was just short of (£2000) they an through my income and expenditure and told me to consult a Debt Management company as I had negitive income.

First time I had been in this situation I looked up these companies and started to do research on them to find which was the better to go for. The Citizans Advice was helful to put me onto free debt management companies, but warned with the amount of people now using these companies there was a long wait, I should try a paid one. I started to look up the cheapest one I could find. Most charge between £29 - £35 per month. I looked up Dexter Bell Associates and spoke to a Richad W. He said they could freeze my loans and my account, consolodate my Debt and make payments to my ceditors on my behalf and I would have nothing to worry about.

I received a glossy book in the post with instructions and a breakdown of what I was paying out and what I had comming in, the amount I needed to pay dexer bell was £100 p/m, this was fine as it was a lot less then I was paying p/m usually. I had to pay the £100 holding fee, refundable if I should choose to exit the plan early or if I should complete the plan, the plan was also flexable so I could come out of it at any time, apparently this was amount was required for the work they do in dealing with the accounts in he first month. so I went ahead, thinking that would be the end of it, and could concentrate on getting myself back on my feet.

Over the next three months I paid a total of £300. (£100 holding fee, 2x £140 for he payment to the creditors and £58 so they could manage my debt). I kept getting phone calls and nasty letters off Lloyds as well as charges and exta interest added onto the accounts, Dexter Bell said this was normal and not only could they claim it back but it would stop soon. In the second month I was getting calls from Lloyds every day, so I sarted thinking what are Dexter bell up to? and started to ask lloyds what they received from dexter bell. they said a letter to say that dexter Bell were dealing with the account. by the third month I had had enough of the daily calls and letters fom lloyds, after many calls to lloyds and Dexter bell asking for updates and forwarding the lloyds letters to dexter bell over the last couple of months I decided to speak to lloyds direct and managed to negotiate a deal with them direct.

I brought my £100 payment which would have gone to Dexter Bell, down to £36 straight to lloyds, I got the account frozen and the charges stopped. During the three months lloyds told me that they had only recieved one letter from Dexter bell, no formal agreement was ever presented or disscussed. In fact Dexter Bell was powerless to stop any action on the account as they were not authorised to do so. when I stopped my plan, dexter bell claim that lloyds brought down the payment as a direct result of their action - (Lloyds collection team laughed) and they were unable to return my £100. I was told by lloyds that the £100 should be re-imburst as per there term and conditions but also I should request he management fee be returned as they have not done much, they advised me to go to the CAB and show them Dexter bells paperwork which will get passed onto a company who is investigating these companies.

Altogether I paid £158 for a letter which just said that dexter Bell associates are dealing with the account. I have managed to increase the debt as a result of Dexter bell miss management, and telling me to stop paying lloyds, and they wont refund my £100. I have sent two letters to them (next post) last one they have not replied. There appears to be increased activity of people using the companies, and they dont do much to manage your debt at all. Im sure I could have sent out two cheques for a lot less the £58, and done a letter for free.

daveA1_2

letter to dexter bell cancelling plan:-

27th May 2009

Good Afternoon Richard,

Following a conversation I had with your receptionist and with Lloyds TSB I have managed to agree a financial sum which is more affordable to me each month. Therefore I would like to thank you for the service you have provided to me over the last few months and request that my Debt management plan is now cancelled.

I am also requesting that the £100 that you are holding from the first payment is also returned, as mentioned in our first months talks. Please could you confirm that the Debt management plan will be teminated, and that the £100 will be returned.

Kind Regards

Mr David Lakey

daveA1_2

responce back from dexter bell - :

David

That's fine i will inform your creditors that you are no longer on board with us. I'm afraid the initial payment is only refundable if you complete the plan, it is to protect us from this very situation. As i'm sure you are aware most of our work is carried out during the first couple of months of the service, Lloyds are offering you a reduced payment as a result of the work we have carried out.

If you choose to come back on board in the future we will waive the initial fee but i'm afraid we can not refund it, i'm sorry. Please remember to cancel your standing order with your bank.

Regards

Richard

daveA1_2

responce back to dexter bell

28th May 2009

Dear Richard Williams,

I am shocked and disappointed at your last email, as well as the work you claim to have carried out. I spoke to Lloyd's TSB yesterday and this morning. They have confirmed to me that the ONLY correspondence they have ever received from yourselves is a letter to say that Dexter Bell Associates are dealing with the account.

They go on to say that no formal agreement was ever presented nor discussed with them by Dexterbell Associates, and the reduced payment amount was a direct result of my conversation with them yesterday. I was also informed that Dextebell could not have froze the account, or stopped any charges being incurred even if they wanted to, although you say you were able to do so.

Lloyd's TB are now sending out a letter to me, confirming the only correspondence was only one letter stating you are dealing with the account. What I am also upset about, is that in our introduction conversation, you stated that this was a flexible plan and that the £100 which I paid to you was refundable at the end of the plan or if I should choose to finish it. All together I have paid you £300, of which £58 was your management fee, and £100 deposit for work you claim to have carried out. This would therefore imply to me that the one letter you sent has cost me £158.

I as well as the bank agree that you have made payments twice amounting to £142, however I paid you two lots of £29 on the basis that you would freeze the accounts, stop all charges, not just send out one letter, which I could have done myself for free. Lloyd's TSb also agree, and I quote from he collections department "they have not done much" & "they are unable to freeze or stop charges unless a formal agreement is in place".

They have advise me to go to the Citizens Advise Bureau, where they collate the information about charging Debt Management companies and pass this on to another company who is investigating these companies. I do feel that in a time of unemployment and lack of funds, Dexterbell Associates as let me down badly with not managing my debt and only sending out one letter and a couple of payments. In fact most of the time I was speaking to Lloyd's passing your details on and chasing Dexter bell up with updates.

I therefor once again, prior to me pursuing my complaint with the relevant authorities, request you issue the £100 back to me, If i am to pursue the complaint I will also be requesting the management fee back of £58, which I feel you have failed to manage anything at all.

I look forward to your reply

Regards


Mr David Lakey

daveA1_2

responce back from Dexter bell - now there offering a partial refund ??

David

Firstly I have been advising clients for over 10 years now and I would never have said that you would get your initial payment back if you cancelled the plan as it is not true and I would NEVER mislead somebody who was in a vulnerable position such as yourself. We have very many satisfied customers and regularly receive letters of thanks for the 'life changing' help and support we give to our clients.

Unfortunately Lloyds are a very large organisation that take a very long time to process our paperwork, they have many different offices and collection centres and as a result it often takes a while for correspondence to get to the correct department and get processed. A debt management plan is not a miracle solution it often takes time for things to settle down it is not a simple case of buying a new car that breaks down or a packet of crisps that are out of date a DMP is a constant process of negotiation and there are no guarantees.

I have sent in the post to you today copies of all the letters we have sent to Lloyds on your behalf, a copy of your signed Terms & Conditions with the relevant points highlighted and a printout of your file history all of which clearly show that we have;

1. Done for more work than simply send one letter.
2. That we have had contact with your creditors.
3. That you have unfortunately no grounds for a refund (the CAB will confirm this).
4. That we make no guarantees regarding interest and charges.

I would like to say that I am saddened by your email and by the fact you employed us to act on your behalf but choose to listen to the very people you employed us to help you with, I feel you have given us no chance to prove our service works and that you have implied that we have in some way tried to underhandedly extract money from you. I have worked here since the day the company was formed and I believe that we have always upheld the company ethos of providing a good service for a fair price. I would like to point out that many companies take the first 3 payments as a set up fee and charge much more than £29 per month.

As a gesture of goodwill and without prejudice I am willing to offer you a partial refund of your initial payment to us. This will amount to £100 minus all the costs we have incurred from the moment of our first contact (excluding bank charges as this is covered by the monthly fee). A further email will be sent detailing this shortly.

If you do choose to make a complaint then you will see that in over 7 years of trading this company has received 1 single complaint and that was because we sent a mailshot regarding our services to someone who didn't need them and took offence to the implication he did. I don't believe another single DMC (or any other service provider established for over 7 years) could boast that fact.

Regards

Richard Williams
Dexter Bell Associates

GeorgeUK

This shows why it is so important to get independent advice before signing up to any company. What they promise in writing and what they actually say can be very different.

Thanks for posting this up Dave. It will give others a better idea of the questions to ask and to note when they are told something MAY happen instead of WILL happen.

I hope you have your finances in order - if not we'll be glad to throw a few ideas to you.

Good luck with the job hunting.

daveA1_2

Okay so they are offering me a partial refund, with the breakdown of cost extract goes

Initial consultation £10.00 (my time)
Initial Paperwork £8.00 (time brochure printing post)
Letters @ £2 each (time post printing) x 16 = £32 (some creditors charge £10
+ for sending an arrears letter)
Processing incoming paperwork from client and creditors (updating filing
etc) £10 (time)
Telephone calls estimated 20 minutes (inc holding) @ 10p per min £2.00

but I paid them £29 p/m as a management fee to cover all this??? the remainder £70 was suppose to go to the creditors.

responce is as follows:

David

As a gesture of goodwill and without prejudice I am willing to offer you a
partial refund of £38.00 based on my best estimates for costs incurred by
ourselves not including bank charges, please note that none of these costs
are an official charge and are simply my best estimate (which i think are
probably low estimates). Please see list below for calculations.

Initial consultation £10.00 (my time)
Initial Paperwork £8.00 (time brochure printing post)
Letters @ £2 each (time post printing) x 16 = £32 (some creditors charge £10
+ for sending an arrears letter)
Processing incoming paperwork from client and creditors (updating filing
etc) £10 (time)
Telephone calls estimated 20 minutes (inc holding) @ 10p per min £2.00

Please note that it costs a lot of money to employ staff and run an office
which is a factor in my calculations.

As a gesture of goodwill I am also willing to offer the following. In
addition to the partial refund we would be willing to offer our service free
of charge for a further 3 months as I am convinced that given the
opportunity we can resolve any issues you have and provide you with an
excellent service. I offer this as I genuinely believe in our service and an
unsatisfied customer leaves a very bitter taste for me. If you wish to take
up this offer I will refund £38 + 3 x £29 after 3 further payments
regardless of if you then cancel the plan (you have that in writing).

If you would rather accept the refund and cancel the plan please provide me
with your sort code and account number and I will issue an immediate refund.
Should you choose not to accept this offer it will be withdrawn and no
refunds will be issued as per our T&C's.

Lastly, I am very sorry you feel that the service is not working for you and
I assure you we provide the best possible service but there are always
factors out of our control which makes this a very difficult service to
provide. I understand completely that being in debt can be very frustrating
but I feel you are venting at the wrong party, if Lloyds had been more
efficient in responding we may have had a formal agreement in place by now
and the charges frozen, maybe your issue should be with them.

Regards

Richard Williams

I also like the idea they want me to pay them three other times (total of another £300 )before they will give me a bigger refund and credit me back 3 x the management for the next three months. anyone hink i should take this refund and learn from bitter experience - i have got more importan things to like finding a job !!

thanks

David