help.....is this normal???

[Andrew Graveson]

Hi catullus,

It was the use of an example relating to one company and how they bag a fee by using a debt management plan for a couple of months prior to advising that an IVA should be sought followed by your statement "...that's how the debt management industry works".

I don't doubt for a second that you've seen examples of this, possibly many examples, but it is not how the whole industry works.

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

[catullus]

Hello Andrew

I work quite closely with a number of DM companies and I have to say that every single one that I know operates on the principals that I explained in my post.

I genuinely would be interested to know how other DM companies deal with clear candidates for an IVA, without first signing them up to a DM plan first, and how they justify their fees to the client for simply passing them over to the IVA company.

[Andrew Graveson]

Others, including ourselves, take the view that each case is assessed in line with the numbers and the client's circumstances and attitudes.
If an IVA is going to be the right solution we would advise the client of that in the beginning. We would then begin work on the preparation of information of use to an IP and the IVA case.

Any fees received would be from an IP in respect of the work done on the case to the point of transfer.

Without a fee to the client the issue of justification does not exist.

This may not be the route to a rapid fortune for the debt management company but there are some that take the view that doing what we consider to be the right thing will lead to long-term business success.

I'm sure that there are good reasons why other companies handle this in another way (that are not purely commercial) so I am not seeking to discredit other ways of operating out of hand. We (and others that I know of) just take another view.

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

[MelanieGiles]

I would be very reluctant to accept an introduction from a Debt Management Company who had kept a case "warm" for an IP just to get fees paid, and would be keen to know exactly what had been paid to the debt company and what paid to creditors.

Most debtors I deal with are reasonably well informed about their options, even before they seek my professional advice, so I do wonder as to the quality of client one would get via a DMP introducer who operates in the manner that Catullus describes.

I was not aware that these sort of practice was as widely used as it seems to be. Learn something everyday on the forum!

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

[catullus]

Hello Melanie

A subject dear to my heart.

I take my hat off to Andrew for operating such a fair policy but, reading between the lines, I think that he knows that this is rife in the debt management world.

Furthermore, many of the excesses of advertising (write off 90% of your debt) that occured until recently were initiated by this sector and not IP's, as is commonly assumed. But we get the blame.

And to make your hair stand even more on end, I know that there are a number of Indian companies operating in the data capture market, who follow up loan declines and then "package" cases for IVA or DM purposes, masquerading as potential lenders.

It's a murky world out there.

[MelanieGiles]

My blonde tresses are now almost vertical! I always said that we were a little closeted away in God's Country from the foul practices of the other side of Offa's Dyke, and here it is once again!

You are spot on about the advertising, I could not agree more, and I have to report that I am now seeing a number of clients who are coming to me telling me that they don't want to consider an IVA bacause of the bad name they have!

What will we see next in this strange marketplace.

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

[Andrew Graveson]

Hi Catullus,

I know it happens. I didn't try to hide it between the lines. Just because it is common does not mean we're all at it!

The 90% or 75% write-off line has been tackled by the ASA already. There have been IP-led and otherwise-led companies on the wrong end of that line.

The "Indian company" play I am familiar with. Under FSA rules it is not acceptable to cold-call on financial products from within the UK.

The way through this is to set-up or commission an Indian partner to cold-call "financial surveys". Such surveys throw up financial, insurance, and debt-related needs. Permission is sought for a UK based company to call.

The leads frequently come from loan turndowns. By the way, the sale of the data of a loan turndown is worth £3 per individual data set; tempting money for a loan company for whom the data is without value otherwise.

Once permission has been granted by the callee the FSA's rules have been neatly side-stepped. Typically the next move is to call from the UK and reconfirm the subjects wish to discuss the matter in hand. The lead is then passed (or sold) to a company ready to help meet the need.

That company then calls, double checks the individuals permission to discuss the subject, and everyone proceeds in a compliant manner.

Murky? Yep!

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

[MelanieGiles]

How does this get past Data Protection laws - or is it on the same basis as the irritating company that keep trying to sell me double glazing on a Sunday afternoon?

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

[Andrew Graveson]

Perhaps Melanie, but they would look nice and save you a fortune on heating bills this winter. Luckily for you there's a 50% discount if you book before midnight.


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

[catullus]

I think that you are a little out of date Andrew.

I've recently heard of qualified leads for DMP being sold by one of these Indian companies for £35.

I wasn't suggesting you were trying to hide this practise, I'm glad that you acknowledge its existence and would have thought it was in your interest, given your ethical stance, to warn readers of this forum, for all you're worth to treat DM companies cautiously.

This has been one of my campaigns since I joined this board but my explanations of the industry and warnings of being careful as to who you really are talking to, don't seem to have struck a chord, until now.

[catullus]

In answer to your question Melanie, it's got round by people applying for unsecured loans etc (not regulated) and not ticking the box or reading the 8000 pages of terms and conditions.

[Andrew Graveson]

I think we're coming to the same subject from a different understanding Catullus.

I was referring to the money available to sell details of a loan turndownee to one of these prospectors if you write loans for a living.

Someone sells the data. Someone calls out on the data from abroad. Someone else chases the lead from the UK. Finally someone qualified or suitably placed "closes the deal" having purchased the lead.

DMP leads that are produced from the information (perhaps from India) are sold at £35 and upwards. IVA leads from the same data are sold for £100 plus. In addition mortgage and insurance leads are being sold to IFA's. Who knows what other leads are being produced and sold from these financial surveys but it will include mobile phones, satellite packages etc.

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

[Andrew Graveson]

Just thinking about your other points Catullus.

I have acknowledged in other posts and threads previously that debt management is subject to less regulation than that which does apply to mortgage advisers, insurance advisers, IP's, and those involved in financial claims.

I have also stated previously that people should talk to more than one DMP company. Irrespective of regulation I think the same logic applies to mortgage and insurance brokers, IP's etc.

Your warnings deserve to strike a chord, especially as it relates to DMP's, but I hope they'll be phrased in a way that makes it clear that there are companies determined to provide a good and fair service in each of these industries.

For every one person who needs debt help and for whom an IVA represents good and best advice (and is available) there are many who need a different type of solution that an IP cannot provide.

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

[mikebdomain]

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[catullus]

I totally agree Andrew. I would also fully acknowledge that debt management can be an effective method of addressing financial difficulties. Indeed, it often is the only method and yes, there certainly are both good and bad companies offering this service.

I know that Melanie has written a very useful blog giving advice on what to look for when chosing an IP. It strikes me that you could do a useful service in doing the same for debt management and while you're about it, helping people to distinguish between fee charging companies and CCCS/PP. Just a thought.