Bankruptcy Protection Fund - AVOID!

JCS1

I would urge anyone considering using this company to get hold of the limited companies accounts which are in the public domain (and you can download them for a £1 from Companies House ). They make interesting reading

Ineedaname

Perhaps we should all forward our letters to the Financial Ombudsman (would that be the right destination for this?) and once they are inundated with said letters they may investigate the practice of ambulance chasing new BRs?

HOLIDAYMAD_2

in need I do agree with you but think these people are hoping to go for those that have been petioned against for non payment opposed to those that have chosen this route, or all of a sudden have changed their mind .

I dont see any wrong doing , they are giving us options, good or bad. And prob been investigated tons of times.

As well we all know debt is a growth industry and there is always someone ready to cash in, even the CAB advisor told me the OR takes the bulk of a IPA and not the creditors for there salary payments and costs as they are self employed. Dont know how true that is but i suspect not far off. That is a side issue on this point but all the same IMO.

Whe i got my letter , i thought what a load of rubbish, but remembered from here this nonsence seems to come ten fold following a BR.

debtinfo

although there is nothing wrong in offering these services as some people may be in need of them as you have pointed out, it the way that they conduct their business in making it look like they have inside knowledge that can help you specifally which we object to. If they made it clear that it is just a non targeted flyer and were upfront about cost then that would be ok

fermi

JCS1 wrote: »

I would urge anyone considering using this company to get hold of the limited companies accounts which are in the public domain (and you can download them for a £1 from Companies House ). They make interesting reading

https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0B6i5-2tePE-TMjQ2MWNhY2QtNGQ3OC00ODI5LTgyOTctZDUzN2I1ZDRlYjJi&hl=en_GB

fermi

http://www.oft.gov.uk/news-and-updates/press/2010/130-10

The OFT has imposed requirements on three associated companies, The Bankruptcy Protection Fund Limited, Consolidated Finance Limited and Alpha Mortgages Manchester Limited, to improve these companies' practices when offering bankruptcy annulment services to customers.

Bankruptcies can be annulled by a court in certain circumstances, including when bankruptcy debts and expenses of the bankruptcy have been paid off in full or guaranteed to the satisfaction of the court. Some businesses offer recently bankrupted homeowners a short-term loan secured on their property in order to repay all such debts and expenses and enable them to seek to annul the bankruptcy.

An OFT investigation found that the three companies had not been transparent in their dealings with customers and failed to adequately outline the risks involved. The companies had also misled consumers about cancellation rights and, in one instance, failed adequately to take account of the needs of a consumer with limited mental capacity.

The requirements imposed set out that the companies must ensure that:

• advertising material explains the commercial nature and costs of the service and consumers are made fully aware of the links between the companies
• before entering into a contract, consumers are given clear and accurate information about the short-term loan offered, and that obtaining a mortgage or re-mortgage is not guaranteed
• before entering into a contract, consumers are given accurate information on the cost of the service and adequate warnings about the nature of the service, including that the consumers property could be repossessed in the event of non-payment of the loan
• before entering into a contract, consumers are informed of their right to cancel the agreement
• they do not provide bankruptcy annulment services where there remain doubts about a consumer's capacity to understand the information provided.

Ray Watson, Director of the OFT's Consumer Credit Group, said:

'Bankrupt people are in a vulnerable position. They need to be given full and clear information about any offer that is made to them. These requirements make it clear that the OFT expects full transparency and fairness from this sector, to make sure that consumers are not misled and do not find themselves placed in a worse financial situation.'

NOTES

1. Please see the full requirements imposed (pdf 253kb) on Bankruptcy Protection Fund Limited (BPF), Consolidated Finance Limited (CFL) and Alpha Mortgages Manchester Limited (Alpha) .
2. The three companies are associates of each other, within the terms of the Consumer Credit Act 1974 by virtue of their shared directors, premises and the business provided. BPF contacts bankrupt people setting out the service they offer and will correspond with creditors on the bankrupt's behalf offering repayment of the debt(s) due. CFL arranges the finance to enable a debtor to seek to annul the bankruptcy and, once annulled, this short term loan is secured on the bankrupt's property. Once the bankruptcy is annulled, BPF introduces the debtor to a mortgage broker (Alpha), through which the consumer can arrange a re-mortgage of their property in order to pay off the short term loan, if a re-mortgage is required and/or available.
3. The OFT issued a Minded to Impose Requirements notice to 25 June 2010. The decision to impose the requirements was made on 25 November 2010. The companies can appeal the decision to impose the requirements to the First Tier Tribunal (Consumer Credit). In this case the appeal period has not yet elapsed.
4. Failure to comply with these requirements could lead to a fine of up to £50,000 per breach or to action by the OFT to revoke the companies' credit licences.
5. The Consumer Credit Act 1974 requires most businesses offering credit, lending money or involved in activities relating to credit or hire to be licensed by the OFT.
6. Where an individual has been made bankrupt, section 282 of the Insolvency Act 1986 allows the individual to apply to court to have the bankruptcy order 'annulled' in certain circumstances. One of the ways in which a bankruptcy order may be annulled, subject to the discretion of the court, is where the bankruptcy debts and expenses of the bankruptcy have all, since the making of the order, been either paid or secured to the satisfaction of the court. As noted above, companies, such as those named here, who offer bankruptcy annulment services approach bankrupted homeowners offering to assist the bankrupt in seeking to annul the bankruptcy order by means of a short-term loan, which is then secured on their property.
7. The OFT issued a consultation 'Mental capacity - Draft OFT guidance for creditors' on 6 December 2010, which can be viewed here.
8. For advice on dealing with debt, see the Directgov website.

JCS1

That makes things a little clearer. The balance sheet for BPF shows loss of nearly a million, and was wondering how they were still in business. If they are passing the leads onto associate companies for finance and then re-mortgage, that's where I guess they will getting money from. Might have to do some more digging at companies house

Ineedaname

HolidayMad, I think both Fermi and Debtinfo have clarified the problems perfectly. This board probably only represents a small percentage of those who go BR. Many will not be aware of the risks involved and get caught up with companies like this, causing even more stress and heartache. This is ambulance chasing at it's worst because the letter is misleading.

I'm forwarding my letter to the OFT with a covering note.

HOLIDAYMAD_2

Ive never advocated this company, but for me ive got used to this unsolicited rubbish this being creditors or door stop collectors right down to this bunch of misfits.

Personally i think Fermi's detailed post should be a sticky, but taking into account the main principal of being a BR in that advise should have been taken and that is knowing your full options and the risks , so at the point of being a BR you wont need these people or need to consider them , hopefully forum users will realise this lot are a menance.

Im now awaiting the letters to say some one is willing to buy my property if its at risk- of course it will go be in the bin.

But if someone was unsure id say get proper advise first and foremost.

Whether companies actions are unlawful is down to intrepetration, many creditors letters i got were in the same vein.

Having read the conclusion and certain words used in the investigation ie "minded", nothing appears to have been done they are still operating , they were considered to be not transparent in their approach or ethics, i would hope as said previously people take advice.

But of course all the above is my opinon only and i doubt this forum or others will stop these organsations because whilst they are walking a thin line are they breaking the law.

Ineedaname

No, it appears what they are doing is not actually illegal, however, it is immoral and unethical. I believe if enough BRs complain then something will be done eventually.

Nothing is gained if everyone just rolls over and shrugs their shoulders.