debt Management company

richardgc

Can anyone help?

My daughter is making payments to a company who pay off her debts each month.
The payments are 100.00 per month, they take out fee, which is greater, than monthly payments to people she owes money to.

If she were to cancel their services she would save 65.00 a month, as that’s their fee.

Then recently the debt management team said due to a change in what I think is the FSA that she would have to start making payments of 120.00 a month.

Now if she were to cancel their services how much stress would it cause?
Would the people change the credit agreements?
Because she has been doing this a few years now, she has no record of the company’s details where she owes cash too, such as where to make the payments.

What can she do?

Can she take the control back and pay what the management team is paying.
Or would creditors be on her case again

Thanks

Dobbibill

I don't know much about this topic but I'm sure there will be some more knowledgeable people along soon to give you an informative answer.

I would however ask for a breakdown of the creditors from the DMC and then cancel the arrangement with them and seek assistance from one of the free Debt Charities such as Stepchange, NDL or CAP. The DMC is not going to be doing anything for her that either, she or the free charities cannot do fee free.

She is taking one step forward and two steps backward by paying a fee.

She needs to sort this out sooner rather that later though as she could be paying that extra money off the debt rather than to the DMC in fees.

Hope this helps

DB

sourcrates

DUMP THEM WITH IMMEDIATE EFFECT !!!!!!


They are just fleecing her, why on earth did she sign up with a company that charge such Hugh fees ?


Write and cancel immediately, cancel any direct debt or standing order she has to this company.


You do not have to pay anyone to run a DMP.
You can do it yourself for free, or seek advice from one of the free debt charities, stepchange or National debtline.


Never, ever, ever pay a Limited company for this service, they are just prolonging her debt, it is legalised robbery, this crops up on here so often, please tell her to cancel this right away, and seek advice from the above charities.
If any creditors moan, write and tell them she is seeking advise from stepchange and will be in touch shortly.

sourcrates

And, as a further measure, she should write to this company and demand all her fees back, you say she's been paying for years ?


Was she aware of how much it would cost her ?


If she was ever in any doubt, she should vigorously pursue them to get all her fees refunded, if they refuse, take them to the FOS.


This kind of exploitation really gets my hackles up, these Fee charging Debt Management Companies should be banned, end of.

DawnW

sourcrates wrote: »

This kind of exploitation really gets my hackles up, these Fee charging Debt Management Companies should be banned, end of.

The next financial services malpractice scandal just waiting for the headlines once PPI, CPI, Wonga and co are old news....

richardgc

When my daughter contacted them ( the DMC ) she was so distraught as her husband had left, people were calling in debts, she had no where to go. She told me that because she had given SH total control she does not have the bank or details on how to pay the companies now, will the managing company give her all the info?
I will advice her to call the national debt help line tomorrow.
Thank you for the replies

sourcrates

richardgc wrote: »

When my daughter contacted them ( the DMC ) she was so distraught as her husband had left, people were calling in debts, she had no where to go. She told me that because she had given SH total control she does not have the bank or details on how to pay the companies now, will the managing company give her all the info?
I will advice her to call the national debt help line tomorrow.
Thank you for the replies

Yes, unfortunately, this is a typical scenario, they prey on vulnerable people, at a very vulnerable time in there lives.


You do not need to involve this DMC in any more of her affairs, but you can ask for the details.


She should check her credit reports first of all, Noddle(callcredit) allows free access online, Experian, and Equifax will do a 30 day free trial, but she must cancel before the 30 days are up, or she will be charged.
A better option is to apply for a £2 statutory copy of her credit file from the Experian, and Equifax websites.


Between all 3 Credit reference agencies she should be able to piece together who she owes what to.


Another option, once she has stopped paying, is that all the relevant lenders will write to her, asking for the money, so she will get the account numbers etc that way.


Once all this info is collated she can pass it all to stepchange or whoever she is dealing with, and they will sort the rest out for her.


She can of course do this herself, maybe as her dad, you could help her ?, its a simple process to make an offer in writing to each creditor, once a payment is agreed, simply set up a standing order to each creditor from online banking, and click the button every month, no special knowledge needed.

richardgc

That is great advice, thank you. Im going to visit her tomorrow. I will show her this thread. I wish I could just her debts off, but I can't.

Rich

DawnW

richardgc wrote: »

That is great advice, thank you. Im going to visit her tomorrow. I will show her this thread. I wish I could just her debts off, but I can't.

Rich

I am sure she will appreciate you helping her to get it sorted out

Good luck xx

Depth_Charge

Hi richardgc

Unfortunately this type of thing is not that uncommon, ridiculous in my opinion and it can hardly be in the debtors best interest in my opinion.

Given the limited info provided I have no idea what they are talking about on the FSA issue other than 'it sounds a little unreliable maybe'

Have a read at the FCA guide below and maybe the DMC concerned should do also (or someone point them in that direction:)

http://www.fca.org.uk/static/documents/consumer-credit-being-regulated-guide.pdf

Anyway, Just following on from others

Citizens Advice info below on Debt Management Plans, free providers & self help

https://nedcab.cabmoney.org.uk/remedy_4.asp

Going with a free provider is a no brainer for me however if she feels confident enough she could look at self managing as this method is proving ever more popular getting easier & more accessible. The CAB have an established award winning online self help DMP system that does all the letters, financial statements, expenditure allowance guidelines with everything saved. The CAB system also has a transfer provider facility (see links below)

https://nedcab.cabmoney.org.uk/dmptour.asp (example dmp)

https://nedcab.cabmoney.org.uk/dmptour2.asp (example transfer provider dmp)

On another point (just going on the limited info provided) has she had full advice on all her options? for example a debt relief order? I see that the payments are set at £100 per month but it would not be the first time that I have seen people advised DMPs when a Debt Relief Order would have been another eligible option if expenditure guidelines such as the Common Financial Statement had been applied (taking into account other circumstances of course)

http://www.cfs.moneyadvicetrust.org/

As others have suggested it would be worth contacting a genuine charity such as Citizens Advice, NDL or SC for full independent advice on all appropriate options that are in her best interests and not others.

It would be interesting to see how she goes on (if possible)

Best Wishes

DC

Sazzie23

richardgc wrote: »

That is great advice, thank you. Im going to visit her tomorrow. I will show her this thread. I wish I could just her debts off, but I can't.

Rich

Some great posts here and I hope she finds the help she needs.

For simplicity I can recommend stepchange (i'm in with them for last 2 years) & if you contact them they may be able to help guide you through getting the debt details back so you can sort it.

IMO she should stop paying the DMC straight away, do not worry about the creditors making trouble about not getting paid, - at least you'll get their details and then you tell them 'I'm changing to Stepchange - I will send a token payment (of £1 per month) until this is sorted' - most will take it on the chin, especially as it means they are likely to be getting repaid more quickly.

I understand its a truly difficult time without any financial pressures as well. There is the DMP mutual support thread - part 10 which is well worth a read if you want to be armed with information to help.