Be aware of mistakes when on a DMP and don't give up resolving a mistake

goldfishdude

A long thread - sorry,but if I can help one person in this situation, I will be grateful.

We finished our DMP in just under 4 years.  It was hard to clear £10K of debt, but we did it.  We used Step Change and they were fabulous in supporting us, but they did make one mistake that made it incredibly difficult to resolve - it took me over a year of constantly writing letters to a creditor.

Both my wife and I had loans with one company and whilst on Step Change, the debt was at first handled by a debt collector, then it was sold off - obviously to off load the debt from the original letter.  Cabot Financial bought the debts and I made sure that Step Change were advised so that they could pay the right creditor.  Then Cabot decided my loan was taking too long to pay, so they got their in-house solicitor, Mortimer Clarke to write a letter.  I sent the letter to Step Change who duly changed the creditor and landed up paying them more than anyone else.  What also happened was my wife's loan also got changed to Mortimer Clarke - with an incorrect reference/account number.  This is where the headache started.  My wife started getting emails, to which I answered from the email account registered with Step Change - Cabot were complaining about the lack of payments on my wife's account.  I sent them screenshots and explained what had happened, and this is where it becomes a huge problem - Cabot have very stupid people who seem to be illiterate.  

Threatening letter after threatening letter started arriving in the post and via email.  I contacted Step Change to find out what had happened - Step Change told me the account had changed to Mortimer Clarke, but could not provide any details of who had instructed the change - I hadn't and assumed that Cabot had done so.  I have since discovered that creditors refuse to talk to Step Change about anything!

So we had settled the loan in May last year, and the letters kept coming.  I wrote letter after letter to Cabot explaining this fact, and that Mortimer Clarke had the money in their bank account - more than likely unallocated and sitting in a suspense account!  Then Cabot handed over the account to Mortimer Clarke and they started threatening county court action.  I sent them a letter explaining all of the information and asked them to look into it, only for them to refer back to Cabot. More letters to their complaints email address and more letters refuting what I had explained.  I sent statement after statement from Step Change showing that the debt was settled!  I also informed them that they should proceed with county court action - we would be able to defend their claim and I suspect the judge would have been quite short with them.

I was starting to lose my patience with this and wrote email after email to both Cabot and MC solicitors in May.  No response.  I had spoken to Step Change who tried to mediate on our behalf only to be rebuffed by MC solicitors.  What eventually worked? Writing an email to MC solicitors complaints email address.  Bingo!  Got a response from someone who looked at our complaint and looked at the statement along with payment references and found the money!  Account settled!  We received £100 from MC Solicitors.  Cabot Financial wrote us a letter in June still defending their abhorrent behaviour.  We got £75 compensation from them.... 

I had made a complaint to the Financial Ombudsman, but this had gone nowhere.  That service is not fit for purpose. You just need to persevere with these companies.  They are clueless and should be better regulated.

sourcrates

Yes, agree 100%, they are such large conglomerates, one hand doesn't always know what the other is doing, we find their staff are poorly trained, and most are ignorant of the legislation surrounding fair debt collection practices and the consumer credit act.

Unfortunately this kind of experience is well documented on these boards, and is more or less par for the course when dealing with most debt purchasing companies, not just Cabot.

Mortimer Clarke are Cabot`s tame solicitors, now incidentally acquired and owned by Cabot, so how they can claim to act as separate organisations I don`t know. 

Its all smoke and mirrors, part of the uncertain, chaotic circumstances they like to create surrounding their collection activity, with the ultimate aim of getting you to converse with them, they can be a law unto themselves, but you did the right thing by exercising your right to make a complaint.

If enough people do this, eventually the FCA will be forced to act, as they did previously with 1st Credit and MotorMile finance, names you won`t find active at companies house any longer, both were fined and ordered to undertake a full root and branch re-structuring program, which included better training for staff, new management and new trading names. 

So change can happen, just not very quickly.

goldfishdude

I fully agree about complaining to the FCA.  Cabot and Mortimer Clarke Solicitor are an absolute joke.  My issue could have been handled and sorted after the first complaint I made to them.  I really reckon they are all illiterate and can't read properly!  What is interesting is that Step Change told me that creditors refuse to discuss one of their client's accounts.  They want the debtor to contact them.  This is something that needs addressing: it would be far more efficient to discuss an account with Step Change when it comes to payments - because Step Change has the data to sort things out.  We need to see a better code of conduct - debt charities are there to help.

sourcrates

The debt charities operate on an "informal basis" when it comes to clients in debt management, there are no rules only guidelines regarding what can and can`t be discussed and with whom, there is nothing they can do, that you can`t do yourself you see.

Although they are creditor funded, I very much doubt they get any money from the likes of Cabot or their ilk.

Its the "informality" that is the issue, if it was insolvency, the creditors have no choice but to engage and be directed by the IP or the OR in bankruptcy.

But as a DMP is not a formal solution in England and Wales, at least not yet, they are not obligated to deal with a 3rd party charity, that would all change if or when, DMP`s are regulated.

goldfishdude

sourcrates said:

The debt charities operate on an "informal basis" when it comes to clients in debt management, there are no rules only guidelines regarding what can and can`t be discussed and with whom, there is nothing they can do, that you can`t do yourself you see.

Although they are creditor funded, I very much doubt they get any money from the likes of Cabot or their ilk.

Its the "informality" that is the issue, if it was insolvency, the creditors have no choice but to engage and be directed by the IP or the OR in bankruptcy.

But as a DMP is not a formal solution in England and Wales, at least not yet, they are not obligated to deal with a 3rd party charity, that would all change if or when, DMP`s are regulated.

Very interesting.  

DMPs should become regulated to improve debtors' chances of clearing debt better.  A DMP is a good option in many cases.