DMP firms

[Skipper]

http://www.payplan.com/weblog/?cat=2



"Always think outside the box"

[MelanieGiles]

Really!!!

Would you like to qualify that comment with the benefit of some industry experience. As a professional who has worked in the debt management industry for over 20 years, I am on record as stating that I do not favour many forms of debt management plans, but those that I have seen are most sustainable come from the fee paying area rather than Payplan or CCCS. And this is backed by industry statistics as well.


Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Adam Davies]

Hi
This quote from Payplan " Payplan believes that it is not ethical to charge clients fees for the privilege of providing debt management and advice"
Why is it a "privilege"?
There are costs involved,Payplan and CCCS do not provide DMPs for nothing,they get a fee from the creditors.
There is nothing unethical in charging for a service,as long as that service warrants the fee.
I wouldn't want a situation where only two companies,both creditor backed,are the only ones available to Joe Public because the creditors would basically dictate the whole show.
Regards

Andy Davie
IVA.co.uk Spokesperson and Website Manager

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[Storm]

Rather than having a negative impact on DMP providers it will enhance the service they deliver.

The OFT will assess applications for CCL's more in depth and will monitor these companies to ensure for example they are competitent to give advice.

There is no such thing as a free lunch !! - organisations have bills and staff to pay. Just because they offer free advise doesn't mean rent, utilities, insurance, salaries don't need paying.

Good DMP providers often provide much welcome relief to consumers with debt problems quite often simply being somebody at the end of the phone that will listen and advise.

The OFT are looking to ensure that new and existing entrants to the market offer good quality service and advise.

I am not sure where you get the opinion that the OFT believe all debt advise should be free -perhaps the OFT could explain how they see these services being funded.

FYI - Trade Unions are funded by there members and the OFT is funded by the Government (you and I with our taxes)

[catullus]

Hello Skipper,

What's your rationale behind the view that the best advice is free advice? Obviously I don't agree with that view but I'm interested to ubderstand why you hold it.

[catullus]

I understand how these organisations work but I don't understand why you think their advice is better. I can't see the difference.

[catullus]

I'm not totally convinced that their advice is even equal to fee charging DMP companies, and I'll give you my reasons.What I say is based on knowledge of CCCS, not Payplan, so bear that in mind.

1 The funding policy of CCCS is to enable its income to cover its costs, not make a profit.This means they are cash strapped in areas such as staff development and training. As a consequence they have a very high staff turnover and the calibre of their staff must be questionable.

2 They have charitable status and claim to represent the interests of the consumer yet they have never commented upon, let alone criticise, the banks' overcharging on current accounts and credit cards.

3 The industry is now relying heavily on CCCS' expenditure guidelines but they have not seen fit to update them since 2002 and, as a result,allowable expenditure is seriously out of date. The cynic in me suggests that the reason for this is that it favours lenders.

4 CCCS was the source of the statistic that suggested that only 3% of applicants were suitable for an IVA.Unfortunatelt, because of their charitable status, the IVA industry didn't dare challenge this statistic. They have never explained their criteria for deciding that an IVA is appropriate and the 3% statistic took root. I can only say that I think that statistic is entirely wrong and a serious over simplification of a complex subject.

4 Anecdotally, based on reading this forum,I've not seen any evidence that CCCS DMP's are superior to those set up by private DMP companies. Just as many people seem to come crashing out of a CCCS DMP having concluded that its not working for them or their creditors have changed the ground rules.

For all of these reasons I would question that free advice is even equal to paid for advice but, as always, its all in the eye of the beholder.

Perhaps the right conclusion is to counsel anyone considering a DMP to go to a private sector company as well as a not for profit company and compare the two.

[catullus]

This makes for interesting reading for anyone who considers that not for profit debt counselling is best.Or, for that matter, anyone who doesn't think that!!

From the Myvesta website

http://myvesta.org.uk/articles/articles ... Page1.html

[Adam Davies]

Hi
As usual Steve hits the nail right on the head,why all of a sudden are IVAs the right way forward,is it because CCCS are now offering IVAs themselves ?
Talk about shooting yourself in the foot
Regards


Andy Davie
IVA.co.uk Spokesperson and Website Manager

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

[catullus]

The Mail article also makes interesting reading Andy by implying that the head of CCCS personally benefits from the scale of its operations.

http://www.thisismoney.co.uk/credit-and ... id=62&ct=5

[MelanieGiles]

As I have always said about this industry - "there is no such thing as a free lunch", and it is about time crediors and the so called "charities" started to become a little more transparent about their mutual financial arrangements.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp

[Skippy]

From my own personal point of view I would be wary about trusting a company who is funded by my creditors as I can't help feeling any advice given would be in their interests and not mine. I have been brought up to believe that you get what you pay for, and debt management is no different as far as I'm concerned.

Yesterday is history, tomorrow is a mystery, today is the present - a gift to make the most of.

View my blog at http://skippy13.blogs.iva.co.uk/

[Andrew Graveson]

Another really interesting debate on this subject.

As I've stated before anyone considering a DMP should investigate both options; fee-free and fee-charging.

If it were me I'd want to be represented by an organisation that represented me rather than my creditors. Having said that I'm sure there are many people who are well served by CCCS and Payplan.

My view is skewed by the numbers of CCCS and Payplan clients that come to us mid-way through their DMP's. Very often this relates to significant numbers of creditors refusing to freeze interest and therefore the debt not reducing or even going upwards. Strangely we experience good results in reversing this with some hard work and attention. Others come to us because they are being squeezed for increased payments that they know they will not be able to manage. A DMP has to be affordable to the client AND fair to the creditors - if either part of this is not in place it's a waste of time for all concerned and will fail.

Based on this sample of fee-free DMP users who leave and come to us (who may not representative but certainly are unhappy) there seems to be a lack of will to truly represent the client and work hard to request interest and charges be frozen in return for a clients best efforts to clear debt as quickly as they are able.

I completely agree with the OFT that getting into Debt Management is too easy and more rigorous checks on compliance are needed. That will only raise the standards within the industry and improve a troubled reputation.

For Payplan to connect the OFT statement to fee-charging DMP companies being unethical is bizarre. It's about good standards rather than the fee-charging model used.
Payplans statement on their reliance upon their ethical reputation for referrals from CAB's, employers, unions etc is also odd. Fee-charging DMP companies such as ourselves receive referrals from the same organisations for the same reason. Once again it's about good standards rather than the fee-charging model used.

And Payplan feel I'm unethical for charging fees? Well as always I've said that it makes sense to contact a fee-free and fee-paying DMP company to get a sense for who would represent you best. If Payplan is so "ethical" surely they'd recommend the same comparison so that potential clients can truly appreiate the differences?

They do not of course; the reason being that they make their money from setting up DMP's. Is it ethical not to declare that interest?

Which all brings us back to the subject of free lunches.



Andrew Graveson
Mortgage Broker & Bright Oak Debt Management
andrew@brightoak.co.uk
www.brightoak.co.uk