Help needed - Stepchange ruined our life

Fellsta

My partner signed up to stepchange (the debt management company). the promises were all good. However....

1. They took a few payments via direct debit from her bank. These were supposed to go towards paying off various companies that were owed. They did not pay any of them so she incurred a few hundred in additional unecessary charges.
2. They ruined her credit rating.
3. They contacted her bank and put her account into "collections".
4. At this point she had had enough adn told them she didn't want anything to do with them as they were not helping.
5. Then after we had made a huge effort to get out of her overdraft by selling various things and scrimping where ever possible. It turns out they had asked her bank to remove her overdraft (which we needed for emergencies), so the second we got it paid off it was removed!

Since all of this I have lost my job (another painful story), and we need to move due to needing to change the boys schools (as they are in need of special education which is not being met under our current education area). This seems to now be impossible because of the absolute mess that stepchange have created.
Please can any one advise how we might be able to revers any of the damage they have caused?
Many thanks in advance

Tixy

Hi

When she applied for the DMP with stepchange did she understand what a DMP was?

How many months did she pay stepchange? and have they explained why they didn't make any payments to creditors? Have they provided a full statement of the money the received from her? Has she asked for one?

When entering a DMP it is always inevitable that a person's credit file will be badly affected. Being in a DMP means that you cannot afford to pay the contractual payments on your debts.

Regarding her bank - as part of the DMP you agree not to use/obtain anymore credit. And all unsecured credit forms part of the DMP. Stepchange would have written to them the same as her other creditors to inform them that she was entering a DMP. On being informed that she was entering the DMP it will be the bank who removed the overdraft and passed her account to their collections department.

DorisTrousers

Something is seriously not right here. Difficult to tell where any blame lies, so I wonder if you could shed some more light?

Did your partner actually speak to someone at SC or did she set up a DMP using the online debt remedy tool? If she dd not speak to anyone, then that may explain any areas of mis-communication or misunderstanding, but does also serve to underline that entering a debt solution without having all the pros and cons explained in plain English is fraught with potential dangers. In my own humble opinion it should be outlawed. One commercial firm that did it has pulled the plug very quickly when they realised the possible consequences with the FCA of such a practice, so I fail to see why a free provider, even a reputable one such as SC, should consider it appropriate.

If she did speak to someone then that could be even more worrying. The very first thing that any provider of DMP's or other debt solutions should discuss with potential clients is that by entering into them you are damaging your credit rating. Paying less than you should, what you can actually afford, to get some breathing space, which is effectively what a DMP is means that it is inevitable that credit rating suffers. Nonetheless, she should have had that spelled out very clearly.

Another area of concern is the bank. If that was included in the DMP, which it must have been as otherwise SC would have had no authority to contact them, then she should have been advised to change to a bank where no money was owed. Sounds like this was not done, or possibly not in a clear enough manner. In my experience, it is fortunate that they have not withdrawn her facilities altogether.

Not paying creditors is pretty scandalous, and viewed very dimly by the regulators. There may be very good reason, such as your partner may not have supplied enough information in the form of account numbers, references etc to enable them to pay out the money, but if that were the case then SC should have been in contact immediately it was clear that this was happening. Under FSA rules, now FCA, payments to creditors are to be made no later than 5 working days after receipt of funds. SC have claimed on this forum previously (another area, not this one) that they had special dispensation from the FSA to hold funds for longer, and in interest bearing accounts, but that was not, and still isn't to the best of my knowledge, actually true. It would be bad enough if it had happened once, even with genuine reason, but to happen on a number of occasions is simply not on. Do you know whether SC attempted to contact your partner, by phone, e mail or letter? All attempts should have been made, but if no contact was made then the funds should have been returned to her. It would be worrying if that were not the case.

Any light you can shed on the above would be useful.

As for what you can do, well the damage does, I'm afraid, seem to have been done to a certain extent. Renting (or obtaining a new mortgage if you are homeowners) somewhere new may still be possible, but I guess that your field has been very much narrowed. You can complain if you feel strongly enough about it, and your first port of call should be to SC themselves. In fairness to them, they are a very large organisation and mistakes are inevitable, it is how you learn from them and deal with them that is important. https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CCcQFjAAahUKEwjU39CRh4rGAhXBDtsKHU_MAOc&url=http%3A%2F%2Fwww.stepchange.org%2FLegal%2FComplaintsprocess.aspx&ei=BMN6VdTNAcGd7AbPmIO4Dg&usg=AFQjCNE-C586nLUC_n56GPZ9ZhYz3rMvTg&bvm=bv.95515949,d.ZGU is a link for complaints.

If you get no joy, or you are still unhappy, or even if you want to by-pass them altogether, then you can contact the Financial Conduct Authority, FCA, to register your displeasure, or maybe the Financial Ombudsman Service, FOS.

Former_StepChange_Rory

Fellsta wrote: »

My partner signed up to stepchange (the debt management company). the promises were all good. However....

1. They took a few payments via direct debit from her bank. These were supposed to go towards paying off various companies that were owed. They did not pay any of them so she incurred a few hundred in additional unecessary charges.
2. They ruined her credit rating.
3. They contacted her bank and put her account into "collections".
4. At this point she had had enough adn told them she didn't want anything to do with them as they were not helping.
5. Then after we had made a huge effort to get out of her overdraft by selling various things and scrimping where ever possible. It turns out they had asked her bank to remove her overdraft (which we needed for emergencies), so the second we got it paid off it was removed!

Since all of this I have lost my job (another painful story), and we need to move due to needing to change the boys schools (as they are in need of special education which is not being met under our current education area). This seems to now be impossible because of the absolute mess that stepchange have created.
Please can any one advise how we might be able to revers any of the damage they have caused?
Many thanks in advance

Hi Fellsta,

I'm sorry to hear about the issues you’ve raised.

We can’t give specific advice on the forum as we don't know your full situation, but I'll try and clarify a few areas where I can:

Depending on the type of debt solution your partner was recommended, it’s likely that this will negatively affect their credit file. This is because they’re making reduced, affordable payments to creditors. This should have been explained in our advice, but please ask them to get in touch with our team if they think they weren’t.

It’s normal practice for debts to be passed to an internal debt collection team. It can sometimes seem a bit daunting but we try to provide as much information, support and help on what creditors can and can’t do to help put your mind at ease, but again, if your partner feels they haven’t received this, get in touch.

Without knowing all the ins and outs it’s difficult to go into more detail, especially where you’ve mentioned that payments weren’t made. We never like to hear that someone has had a bad experience of the service we offer, so we’d be happy to look into this for your partner.

If your partner emails their reference number and contact details to moneyaware@stepchange.org I can arrange for a colleague to look into this and get in touch with them. Alternatively, if they’d like to make a complaint you can find the details about how to do this here:

http://www.stepchange.org/Legal/Complaintsprocess.aspx.

Does this address your concerns?

Finally, thanks to Fermi for making us aware of this post.

Kind regards,

Rory