Debt Management Company lets me down

blackbirdxx

I had a number of outstanding credit card balances  due to unfortunate circumstances which were being dealt with by a debt management company that I appointed. The balances were frozen with agreement by the creditors and I arranged to pay them back through this company each month over 2 years. 

I have diligently paid back the debt and I thought I was debt free, but unbeknown to me, one creditor had declined the agreement right back at the start and I was never told this by the debt management company. The creditor told me the reason for declining the plan was that I was offering to pay too much every month which they thought I couldn't stick to. This has now meant that I am having to pay an additional  £2000 of accumulated interest to be paid asap all because the debt management company didn't inform me of the situation which they have acknowledged.

When I agreed to the repayment terms with the debt company, I really extended myself to pay back the debt at the very earliest opportunity. I am very frustrated that I am now being charged full interest by this creditor. If the debt company had told me the creditor was not prepared to accept the payback proposal, I would have paid their credit balance back as a priority and reduced my monthly payments through the debt company to the other creditors. I would also have had the opportunity to pay them a more realistic payback which they would have agreed to. I am now in a situation with having to pay an additional £2,000 of accrued interest which I am struggling to afford.

I appreciate this debt management company was trying to help me, but due to its incompetence with managing the debt, I have a huge additional sum to pay.

Is there anything I can do in this situation or do I have to put all this down to experience? I thought the credit card companies had a duty to help people who get into difficulties so can the problem realistically be sorted retrospectively? Is it worth contacting the financial ombudsman?

Any assistance will be gratefully received because being in debt is proving very stressful to me. 

fatbelly

You've sort of answered your own question. This does happen because a dmp is an informal solution and , although most creditors do follow the 'guidance' there is no legal requirement for them to do so.

The dmp company should have communicated better with you and so a written complaint is worthwhile. If this was a fee-charging debt manager then ask for compensation to help you with this.

Your main focus, as you suggested, is that the creditor should review their decision not to freeze interest and consider crediting your account with the relevant amount. You'll need to write, quote FCA CONC 7.3 and ask for a response within 8 weeks. 

https://www.handbook.fca.org.uk/handbook/CONC/7/3.html

You can then refer their response, or lack of it, to FOS who take a 'common sense' approach to this rather than a legal one, so you may get some joy there.