Compass Debt Counsellors - Help please!

Kaz_NewbieMoneysaver

Hi all,
My husband's daughter and son-in-law started to use Compass Debt Counsellors, based in Nottingham some 9 years and over the past 9 years have been paying them £100-£150 per month. We think (but are not 100% certain) that the amount of the original debt which Compass 'took over' was in the region of £20-£25k. They were under the impression that all interest was frozen and the monthly payments made to Compass would be paid into a 'pot'. When the 'pot' reached a certain size it would be distributed out to pay off various creditors. It now transpires that their total debt seems to be around £49k and Compass have helpfully got in touch advising them that an IVA will be their best course of action - and of course offering to help set it up for them. The amount in their pot is only around £3k and they have only been making the minimum payments to creditors each month. It seems to us the debt can only have doubled by a combination of a)obviously the interest hasn't been frozen and b)Compass are not a charity and must have been levying fees/charges against daughter's monthly payments. Sad to say we are worried that none of the above is illegal. Has anyone had any similar experiences please?

ClioScott

Sorry to hear about this , i've posted a thread below that may have some bearing on the situation.

http://www.consumeractiongroup.co.uk/forum/showthread.php?281623-Failed-by-my-debt-counsellors

I would advise to get some help from the free debt charitys, CAB, Stepchange etc to help out

Keep us updated

Scott

Ilona

Hello Kaz. I'm not an expert, but I suspect a whole lot of people will come on here and tell you to cancel all payments to Compass, and to contact a free debt management charity like Stepchange or Christians against Poverty.

No one needs to pay a debt management consultant a penny, it can be sorted through a charity.

Good luck.
Ilona

sourcrates

Oh my word, this is a prime example of why you should never use fee charging debt management companies.

There are many people who get conned into agreements such as these, mainly because they are unaware that free alternatives exist, yet a simple search on Google could of lead them to the free debt charities.

Please tell them to stop paying this company straight away, you should never assume anything were debts are concerned, these companies exist to make profit from your misery, nothing more, nothing less.

They have no interest in getting you debt free, as you are a source of income for them, seems like a right mess they have got themselves in, did they not think to question this earlier ? Shocking !!

Contact stepchange or national Debtline for advice on how to proceed, you/they should concider an official complaint to the company concerned as it seems they may of been unaware of what they were getting themselves into, they should ask for there payments to be refunded along with statutory interest, if they refuse, the financial ombudsman would be your next port of call.

I hope they can salvage something from this mess.

This is there fee structure, taken from there website:

Fees
a) Our fees are based on the number of creditors you have. Setup Monthly charge (this is capped at 45% of your disposable income). This fee is charged for the first six months:
0 to 3 creditors £55
4 to 6 creditors £60
7 to 9 creditors £65
10+ creditors £67.50
After that we charge a monthly management fee (this is capped at 25% of your disposable income):
0 to 3 creditors £25
4 to 6 creditors £30
7 to 9 creditors £35
10+ creditors £37.50

They will of Paid in the region of £4000 in fees over the last 9 years !!!!!

Kaz_NewbieMoneysaver

Thank you to all, there's some very useful advice there. Turns out (few days down the line) that there had been £10k of old mortgage debt added onto the original debt and a few other 'bits n pieces' :-(
Still trying to get hold of a complete picture, Compass are drip-feeding the information, but seems to me like an IVA might be their only way out. But we are definitely recommending the free, charity/government organisations rather than signing up to anything else with Compass.
Thank you very much for the info re the fees also.

sourcrates

Kaz_NewbieMoneysaver wrote: »

Thank you to all, there's some very useful advice there. Turns out (few days down the line) that there had been £10k of old mortgage debt added onto the original debt and a few other 'bits n pieces' :-(
Still trying to get hold of a complete picture, Compass are drip-feeding the information, but seems to me like an IVA might be their only way out. But we are definitely recommending the free, charity/government organisations rather than signing up to anything else with Compass.
Thank you very much for the info re the fees also.

If they do go the IVA route, then there is a fee structure associated with that option, IVA's are not fee free, the fee is deducted as part of the monthly payment.

May I suggest they get some advice on this from National debtline, the number is in my signature, as its a big decision to make.

Compass are a commercial company, and will try to push whatever option makes them the most money.

poppasmurf_bewdley

If the debts go back nine or 10 years, then it may be an idea to CCA all of the accounts.

This means asking the debt holders for copies of the original agreements signed by your daughter and son in law. Any company that cannot supply the original agreement cannot enforce the debt.

See this thread for more details:

https://forums.moneysavingexpert.com/discussion/709639