Are StepChange actually any good?

Pete1979_2

Pete1979_2 said:

Jude57 said:

Huddo said:

Stepchange is owned by a consortium of the largest banks. (Mainly HBOS)
They will really only give you biased advice that will not affect the banks.

A debt help service run by big banks? Pffftttt.

As I've said here before, I worked for StepChange for many years and can assure you, the charity is not owned by banks or any other consortium of creditors. 

The origin of StepChange is based on an American model of debt advice and the Consumer Credit Counselling Service, as it was originally called, started in the UK in 1992. They were pioneers of Debt Management Plans with the firm ethos that debt advice should always be free and that debtors should, if feasible, repay their debts in a manageable way while developing good budgeting habits. The provision of DMP's via StepChange has always been free to the debtor and the only fees they charge to this day are for IVA's (still cheaper than other IVA practitioners), DRO's (statutory fee only, in line with every other Intermediary) and Equity Release (again, cheaper than other providers). DMP's are only offered when that is best for the client and at no time during my employment was there any pressure on staff to offer them in any other circumstances. 

As usual, @fatbelly is spot on. StepChange are funded by Fair Share Contributions from creditors (as are Payplan, in part) which is a voluntary arrangement whereby creditors are asked (not obliged) to make a contribution back to the charity from the DMP payments StepChange send them. Creditors are not, I stress, obliged to do so and not all creditors do. I won't name names but it certainly used to be the case that American owned creditors did not make FSC's. In no way does any creditor have any power to direct how StepChange operates. Creditors do, however, recognise that StepChange treats all creditors equitably and the working relationship between creditors and the charity is respectful rather than adversarial. That does not manifest as any level of control.

None of the above is in any way confidential and much of it is published on StepChange's own website, as well as their annual accounts.

It's fair to say that, as with any organisation that deals with the public at a stressful point in their lives, not everyone will have a positive experience. Sometimes that's due to adviser performance or unrealistic client expectations or sometimes because the advice given is not what the client wants to hear, however correct - as sometimes happens on this forum, too.

StepChange are, like every organisation, imperfect but the help and support they provide to hundreds of thousands of people every year is undeniable and I couldn't let this old, inaccurate claim go unchallenged. I echo @sourcrates post above. If you have evidence of what you say, produce it.

This is nonsense. Go look up the cccs (step changes old name) and tell me what you find. The worrying thing is you work there and think it's great. I've worked in insolvency for 15 years and not a single IP I know agrees with you. 

Also, the fact you've not even mentioned an iva is why their advice isn't in the best interest of their clients.

Pete1979_2

Mentioned in a positive light i meant to type

Jude57

@Pete1979_2 if you won't provide evidence of your claims, it's hard to know how you arrive at your conclusions but hearsay and anecdotal evidence don't stack up. For the benefit of others who may read this, let me address some of your points.

I sincerely hope your attention to detail is better in your day job. I no longer work for StepChange, as is made clear in my opening statement. I did, however, work for them when they were called CCCS (Consumer Credit Counselling Service.

As for IVA's, I mention them in my second paragraph as you say, but I can't see how what I have written is in any way negative. Just to clarify, when I started at CCCS, IVA's were operated by several external partner companies and I was one of the advisors who carried out the financial assessment for clients being referred by those IVA companies as suitable for an IVA.  In the overwhelming majority of cases in my experience, an IVA was not best advice for the client and so I did not approve the referral. The charity received payment for those referrals but not if the referral wasn't completed. In the choice between a fee for an hour of my time (potentially lucrative income stream given that I had 8 appointments per day, 5 days per week) or the high cost to the charity of running a DMP (only potential income if creditors choose to pay back and as previously stated, not all do) or any other solutions, the only driver was best advice for the client.

My experience was not unique and eventually, the charity launched its own in-house IVA department, run by an Insolvency Practitioner, under the same strictly enforced regulations as I am sure you'll be familiar with. Why did StepChange move into IVA's? In part it was to address the poor practice within the IVA industry (and it IS an industry) overselling of IVA's by unscrupulous lead generators who offered unrealistic, biased advice to clients who were desperate for help and from whom the lead generators and the IVA companies they worked for reaped expensive fees which were often not properly understood by clients. Unfortunately, it still goes on.

From working with debt advisors from a range of providers via the local Money Advice Group, there was, and it seems still is, misunderstanding of StepChange's ethos that debt should be repaid if feasible to do so in a reasonably manageable way, over a reasonable timescale. I also discovered some professional jealousy that at a time of cuts to local face to face providers, StepChange's telephone and online advice provision was successfully expanding. Many had an incorrect view of how StepChange operated and I made a point of inviting anyone who wanted to, to come for a visit to see for themselves. 

Two final points. One, StepChange has never made a secret of how they are funded, nor that the charity's ethos is debt repayment where sustainable. Two, StepChange Voluntary Arrangements has won industry awards so it would seem that not everyone in your business agrees with your conclusions. 

P.S. StepChange VA had £32million in unaffordable debt written off by creditors in 2020. That hardly means that IVA's aren't recommended where appropriate. In the same year, 2% of their IVA's failed, so 98% succeeded which indicates that the advice clients were given was appropriate for their clients in the majority of those cases. I can't tell you why that 2% failed but poor advice in 2% of cases would still be a statistically acceptable number. The most likely explanation is that creditors refused to accept the IVA proposal but I can't really comment on that. Out of interest, and in the interests of transparency, how much did your firm have written off in that year? And what percentage of your IVA's fail?

pinkspideruk

I used stepchange to set up my dmp and they were nothing but helpful and I got out of a large (for me) amount of debt a lot quicker than if I had carried on floundering with my minimum payments and increasing costs each month - I actually ended up saving money off my debts including those to the banks as they removed interest and fees so my dmp payment went towards the debt only and not those - I was able to do most everything via email as I dont like speaking on the phone however, I think for breathing space they do ask for a call so they can discuss it with you as its only relevant in certain situations. 

I found them really helpful and non judgemental at a very stressful time.

If you are unhappy with the advice given you dont have to take it -  if you feel that the person dealing with you was unprofessional or not listening to you then I would drop them an email and explain the issues you had 

sourcrates

I agree stepchange doesn't always get it right all of the time, some posters were turned down for a DRO, yet on seeing their SOA, it was difficult to work out why exactly, other intermediaries appear to take a different approach to stepchange in that regard.
IVA, I`m not really a fan of, they have their place, but for me, they take too long to complete, are wide open to abuse and mis-use, mis-sold on a massive scale, and are just not always the right choice.

Another example where the debt charities are not flexible enough is with those in debt management, whose payment was more than the minimum contracted repayment on a credit card, with the result being the card company started charging interest again, the charity refused to allow them to lower repayments.

Now I am in no position to make comment on the working practices of a debt charity, all I know is they do help a lot of people, who are unable for one reason or another, to help themselves, however, if you have even the smallest amount of knowledge on how the system works, you can do a much better job yourself, where debt management is concerned anyway.

@Pete1979_2you appear to favour IVA`s, but except for the legal protection they afford you, I can`t see why you would do so, DMP`s are much less intrusive, allow greater flexibility, and allow the possibility of saving up an emergency/settlement fund, for use further down the line, to clear away debts at a substantial discount, I can see nothing wrong with that approach.

Kakiste

I can't speak for everyone's experience but I found them very helpful. I've been on a DMP with them since 2019, they gave me a range of options that I could pick but made clear it was totally my choice which to go with. When I had to alter details (one of my creditors upheld a complaint I'd made and cleared the balance of the account) I called them and they immediately took them off the list of creditors and explained how the monthly payment would be divided between the rest of the clients in future. 

The thing I found most helpful (other than the online management tool- where you can see an exact breakdown to the penny of all creditors, past payments, future ones and your estimated debt free date) was the fact that whenever I have to ring them I am never waiting on hold for very long. I've always had my calls answered within 5 minutes of ringing and that's been very helpful, especially in the beginning when I was still stressed and upset about the situation I was in. 

I always recommend them to real life people if the topic of debt management ever comes up. 

Jude57

@sourcrates that's at least a balanced comment. And I agree with you about IVA's. I could never understand the logic of someone paying many thousands of pounds in fees when a DMP was free and those many thousands of pounds would go towards clearing debt. I had some concerns when StepChange set up their VA arm but I was reassured by the fact that best advice remained the only criteria. I felt the same concerns when the Equity Release arm was set up but again, best advice was still the criteria and I think it was less than 2% of clients who were referred to the ER team were actually proceedable. As you know, like DRO's, IVA and ER are specialised areas so it's often not until those teams start drilling down that it becomes clear that their best advice is something else entirely. That doesn't mean the original advice was wrong or inept, just that the triage nature of first advice is, by its nature, potentially subject to change.

I worked alongside colleagues from other debt advice providers and gained an insight into their working methods but, like you, wouldn't presume to comment on something I have only a superficial knowledge of. I certainly wouldn't denigrate those providers based on what clients told me the providers had said. Clients are not objective, of course they aren't, so I'd always be cautious of taking at face value any accusations of poor advice from clients unhappy that there isn't a quick fix available.

I'd be interested to know what IVA companies do to help clients for whom an IVA is not appropriate, or when proposals are unsuccessful. Do they offer continued support, signpost elsewhere (where?) or are clients simply dropped at that point? 

Suseka97

@sourcrates has pretty much captured my experiences with SC whilst on a DMP and I have to say, if I had been more informed about such matters, back in the day, I would have gone it alone.  Not because I had any issues with the way SC handled things - at least not initially - but because its pretty straightforward and I don't feel that my creditors would have acted any differently had I managed the DMP myself vs SC.

The one thing that didn't work in my favour was when the individual payments to a couple of creditors became more than the minimum contractual payment and they started to reapply interest and charges, and SC refused to budge on lowering the payments because of their 'treat all creditors equally' mantra.   I eventually got those creditors to default me (took many months and a lot of letter writing) and then a little further down the line I went self-managed and never looked back.

But on balance I would say that SC are a good starting point, as are all of the debt charities, and a lifeline for many who are in financial crisis.

Own_Worst_Enermy

They are stressed, just as able to be like most other call centre workers.
Working at Stepchange Debt Charity: 117 Stepchange Debt Charity Reviews | Indeed.com

I'm afraid it took working in a sales company who fell under the regulator of the FCA to make me get it is such a hard game.
You can't come off script as you may say something wrong which causes the consumer to either be 'mis-sold or misinterpret' something said, when it comes to pretty much anything said. Along with just not heavily allowed to give opinion so you end up robotic. 
That's why a lot of these best 'telephone advisors' appear cold. 
 

fatbelly

Own_Worst_Enermy said:

They are stressed, just as able to be like most other call centre workers.
Working at Stepchange Debt Charity: 117 Stepchange Debt Charity Reviews | Indeed.com

I'm afraid it took working in a sales company who fell under the regulator of the FCA to make me get it is such a hard game.
You can't come off script as you may say something wrong which causes the consumer to either be 'mis-sold or misinterpret' something said, when it comes to pretty much anything said. Along with just not heavily allowed to give opinion so you end up robotic. 
That's why a lot of these best 'telephone advisors' appear cold. 
 

Interesting reviews. They're bidding for one of the MaPS contracts. Looks like they'll fit in.