On Monday 21st February the BBC one show “Rip off Britain” examined how people who had entered a debt solution with a for-profit company were being ripped off.
Whilst it would be unfair to suggest that every for-profit company is ripping off their clients, the show did bring to light some of the issues which have plagued the industry for a number of years now.
One of the main talking points from the TV show surrounded debt management plans and the fees charged for administering cases. Some people discovered that the first 2 months instalments went to the debt management company and not the creditors, something they were not aware of when they entered into the agreement.
What did seem to come out loud and clear from the show is the need for more transparency in the industry along with a better explanation of the fees to those seeking debt help.
Debt Support Trust
Our experience of debt management plans has been worrying too. There are companies that charge up to 27% of your monthly income as a management fee, meaning repaying your debt would take even longer.
There are debt management charities that offer free debt management plans should this be the correct debt solution. Therefore, we would recommend caution and reading the terms and conditions before entering into a debt solution with any company or charity.