Are DMP offered by Payplan and CCCs etc really free?

lonely_2

GSF, are you saying that the DM companies that charge will work harder at getting debt forgiveness/interest stopped because it's in their interests (to stop you moving to a fee-free company perhaps)???

lxpeanut

gingersilverfox wrote: »

The drive for the free DMC is producing the highest return to the FI's. Therefore DMP without any debt forgiveness will be the most favoured.

The funding they get is not linked to how much they make back for the FI's they do not work for commision. But it is in the FI's interest to promote and support these charities as they get more money back.

The organisations do not promote DMP's over IVA or bankruptcy. When I went to them they suggested bankruptcy and I have heard of them doing this for others. However the fact they exist is going to reduce the numbers of people going bankrupt as they provide another opption. A DMP is voluntary I've not yet heard of anyone being forced into one.

Next would be either interest fixed or frozen. The lack of competition in the market place will mean that DMP without debt forgiveness will be top dog. Which is why the government are planning in bringing in something more formal similar to the Scottish Debt Arrangement Plan mention previously.

I do agree with you that a formal system would be a good idea. One that at least gives some rules on when banks should freeze interest and how they should treat people who approach them with proposals for a DMP. You just need to look around here to see how differently creditors respond and how badly some people are treated by creditors.

gingersilverfox

lxpeanut wrote: »

The organisations do not promote DMP's over IVA or bankruptcy. When I went to them they suggested bankruptcy and I have heard of them doing this for others. However the fact they exist is going to reduce the numbers of people going bankrupt as they provide another option. A DMP is voluntary I've not yet heard of anyone being forced into one.

This is precisely my point. I believe they do promote DMP's over other solutions. I have evidence, based on two ex-employees of a free DMC who were given "training" when their DM recommendation rates fell below a certain percentage level.

Remember all charities require funding. If that funding is dependent on telling people that the world is flat then they will tell people that the world is flat. Charities etc are like businesses they need to make money as efficiently and effectively as possible.

gingersilverfox

Vindication in the form of this article http://www.timesonline.co.uk/tol/comment/leading_article/article1711875.ece
The cost involved in supporting the likes of Payplan, CCCS and National Debtline has caused the banks to talk about charging for banking. The article argues that free banking is not really free, which is my point about these debt management companies. FI’s lend money and they expect it back in the contracted timescale. If they don’t get it back in that timescale their anticipated profit has been dented. Add together the cost involved in supporting these “free” organisations and the FI’s are looking to recoup their money elsewhere.

My arguments are:-
1. Expose the fees involved in generating a free DMP.
2. Make Debt Management a level playing field. The market will decide on what an appropriate fee is for this service.
3. Debt management companies which are sponsored by FI’s will favour the best solutions for their sponsors.
4. If all debt management companies were to charge a fee the customer would be king and the likelyhood of credit forgiveness would be a reality.

Your thoughts

rayday2

Well to me a DMP is a godsend - I am doing mine on my own with the National Debthelpline, I downloaded the info, it is my paper and my second class stamps (my debtors do not deserve first class!)

I am very proud that I am doing all the legwork but in some ways it would be so nice to be with payplan or cccs and know I get a bad letter and just pass it on.

National debthelpline is funded by some companies, like for eg, Lloyds TSB I can't say this worked in Lloyds favour when they were dragging there feet I pointed out that they were going against a plan which they partially funded and that that charity had told me they were not playing fair - it cost Lloyds £200!

We all have to take the steps that we do in order to rest a little easier, its not like anyone on here is using the IVA advertised companies and if there are small fees included I can understand that when it took over 30 letters for me to sort my most stubborn out, plus someones time and phonecalls if you are using payplan or cccs!

robbo_c

I believe these services are free. When I first contacted PayPlan I compared the total I had to pay with and without them and with was much cheaper. I paid with them for 5 years with no problems...the problems I have had with them is, I believe, down to incompetent staff, and by the time I'm finished dragging them through the cleaners for that they'll hopefully put competent, friendly, helpful staff in like they used to have for future people who need their help. I won't go back to them as I've now started making steps to contact companies myself and set up arrangements.

I would say if people need support paying their debts CCCS and PayPlan are a great choice...they just need to make sure that they get competent case and complaint handlers in place, which right now PayPlan are lacking.

SHEARERBOBS

and i used to think that it was unfair when they say FOXES are an unwanted pest.....

onamission_2

Reading this thread Im growing more in favour of continuing my DIY DMP. Luckily I do have the interest and charges stopped on all my accounts.

gingersilverfox

Good positive point Sheara babes.

Don' t just except things at face value. I thought that the "I'm all right jack" mentallity went out of fashion at the end of the eighties. Yes you and all the others who use "free" DMC's may think that they are benefiting from not paying for DM servicess but for the greater good its worth examining can this be improved upon?

Re Robbo-Have you considered taking leagal action. Although you don't have a financial contract with PP it may be argued that they have a duty of care.

I_was_a_fool

Hmm "for the greater good".....I think it is debatable whether free dmps cost more or less than ivas or bankruptcy to the general consumer. As I said before:

"It may be true that all consumers pay for dmps, but all consumers pay for bad debt in every form, in the same way as we all pay for shoplifting, insurance fraud & so on"

I think the debtor in difficulty has to make their choice based on their own personal circumstances & do what is best for them & allows them to survive.

Or maybe I just believe that because it makes me feel better