MSE news: 'Beware fee-charging debt write-off firms'

Former_MSE_Guy

This is the discussion thread for the following MSE news story:

"Hard-up consumers have been warned against paying high up-front fees to firms that pledge to get your debt wiped-out.

The Ministry of Justice (MoJ), which regulates such claims firms, says many companies make exaggerated promises that borrowers could soon be ..."

Read the full story:
'Beware fee-charging debt write-off firms'

mbishton

Whilst it's true there a LOT of companies out there who will charge you £200+ to audit the terms and conditions of your credit agreements, I've used a company called Guardian GB to audit one credit agreement I have with a certain credit card company and all for £25 per set of terms and conditions. For £25, I thought it was well worth the gamble, especially as if they find them unenforceable, you have a team of barristers to defend you and on a no win, no fee basis. Should you win your case, the credit card company will have to pay your barristers fees - so you shouldn't be paying more then £25 per set of terms and conditions for them to audited and for you to be told if they are unenforceable!

peterbaker

This MSE News story is extremely topical this month. There has been a crescendo of brand new telesales activity by so-called regulated claims management firms.

The regulator involved? Ah yes, that would be the Ministry of Justice ... newish boys on the block, eh? Well not really, they were part of the Home Office that got split off under the new ministerial leadership of our harmless old mate Jack Straw, former Home Secretary, after the old Home Office was declared unfit for purpose. But this new lot he has 'working for him', they seem oh so green behind the ears ... I do hope they don't have high civil service grades and bomb-proof final salary pensions. If they do, I can tell you, they ain't earnt them yet by a long chalk.

I will tell you what is new ... that's the licences granted by the MOJ for this kind of business. 3,500 and counting, I was told the other day when I expressed some concern.

So what is the spin attempted by the MOJ in response to MSE's enquiries? Looks to me that they wanted to impress upon us that they had policed at least 100 cases of licenceholders whom they had now banned?

Isn't that a bit quick? I mean most of the 3,500 have only had their shiney new licences to print money for the last couple of months, right? And they were all carefully vetted just months or weeks ago? .... Right ....

I've been on the end of several of these speculative sales calls in the last few weeks.

Without exception, the gist of the message has pointedly been 'Got debts on Credit Cards? We're licenced by the government for a new government programme, the banks have acted illegally, your credit agreements are unenforceable especially if you signed them pre-April 2007, that means you don't have to pay.'

Bad, very very bad. Depending on your point-of-view, this is an opportunist fraudster's wet dream, or alternatively something if allowed to continue that will sink our banks in a mire of fresh claims by people who just fancy a bloomin' big anti-bank bandwagon reason to give every last one of them the finger and to walk off into the sunset with free cash fallen from the sky. I was even 'advised' that some substantial part of the future debt write-offs of the major UK banks which have been alluded to, but not detailed, is down to this new 'clampdown' on unenforceable credit agreements.

OK, there will be some (maybe many thousands of) cases of those truly in hardship where this is of assistance, but please, must we have these new spiv companies let loose on UK telephone lines as our advisers on such important matters? If the government wants to use some fiscal stimulus to help the poor, why does it need to risk giving the bulk of the money to the least scrupulous amongst us?

What about those of us that have always paid our debts even when it has been very very hard to stay afloat? Are we simply to say "This doesn't involve us"?

What about those who hear about "the new government debt relief programme" down the pub - "You'd be daft if you pay that credit card bill now mate :rolleyes:" - does what is said down the pub affect us?

As I said, I think this is yet another government c0ck-up in more ways than one.

The licensed outfit who called me this evening gave me full details of their fee structure, including the suggestion that if I am not already maxed out, they will put their fee on the credit card and make that part of the debt they will get written off . Novel eh? ... Should we really be smiling?

They told me that they had learned that I personally might have entered into a pre-April 2007 credit agreement from the MOJ themselves. I notice that jamesd has already warned us on another thread that any company "cold-calling" about these matters is immediately in breach of the rules set by their regulator. To get round this technical hitch, have perhaps our names and telephone numbers and other personal data actually been provided by the government on official lists to 3,500 newly-licensed claims management organisations?

I think the MOJ have many more questions to answer. I congratulate MSE for getting started on an analysis of this rather troubling new phenomena. :money:

I mentioned above, in bold, the gist of the message being promulgated by all these new johnny-come-lately claims management outfits. The last such message I received was this evening ostensibly from a company that is indeed listed on the MOJ site as licenced. Worrying ... or amazing ... ?

We, the country's right-thinkers, need to be sure that the message about right and wrong as promulgated down the pub is not skewed so far that we forget the values that hold our society together. A short trip down the other way lies chaos for all of us if 'free-for-all' is permitted.