MSE News: Debt management firms could be neglecting customers through...

Former_MSE_Lucinda

The financial watchdog has raised concerns that debt management companies are not carrying out thorough annual reviews – meaning some customers are not benefiting from repayment plans appropriate to their financial situation...

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'Debt management firms could be neglecting customers through lack of reviews, FCA warns'

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nkkingston

Related - the FCA have been shutting down a ton of fee charging firms. If you were with any of them, don't let them hand you off to another fee paying firm: get thee to a charity!

sourcrates

nkkingston wrote: »

Related - the FCA have been shutting down a ton of fee charging firms. If you were with any of them, don't let them hand you off to another fee paying firm: get thee to a charity!

Agree 100% !! Don`t pay for a service you don`t need to pay for.

What exactly do we mean by a "Debt Management Plan" anyway ?

Sounds official right ? well wrong actually, all it actually is, is a fancy name for repaying what you owe, at a lesser rate than you normally would be paying, its basically coming to an agreement with your creditors to make a lower monthly payment, than you normally would, based on your own specific budget.

It is something you can do yourself, very easily, think about it, before you got into trouble, you paid all your bills every month yourself didn't you, well this is no different, except you don`t pay as much.

You set your budget, you inform creditors what you can pay them, and when, then you just get on with it, sometimes a creditor wont accept what you offer them, all that will happen is the debt may get sold on, you just keep paying, and let the creditors worry about that.

Some people say they are not confident, or simply cant be bothered to do this themselves, in which case speak to a debt charity such as stepchange or payplan, they will "run" a DMP for you for no charge.

Most formal debt solutions, have fees associated with them, DMP`s do not, any company that charges a fee to administer a DMP is taking advantage of you and should be avoided at all costs.

sourcrates

I also feel that fee charging companies just want to get you signed up to there so called service, then tend to ignore you.

Once they have there money, they lose interest in customer service, as long as they still get there 30% cut every month, they are happy.

The solution they have sold you may not always be the right one long term either, if a DMP is going to take many years to pay off, then my opinion is its not suitable, and a more formal solution should at least be looked at.

Debt management companies are usually more concerned with profit than with the customers best interests.

Also bare in mind, private companies go bust every day, lots of DMC's have done just that, taking all their clients money with them, leaving lots of people in even more debt than they were before.

Don't take the risk !!!