Debt Management Companies, Do They Really Help?
The debt solutions market places has grown in recent years to new heights, fuelled by decreasing real wages for many of the lower to medium paid and a generational ignorance about debt related protection and laws.
The boom in new debt management companies, many of which have questionably unethical sales strategies and excessive charges have used the lack of public knowledge in the United Kingdom to there advantage.
Its is highly questionable if these companies provided a quality, cost effective service, indeed many of the small companies are in fact subsidiaries of larger groups such as The Money Group and other large debt management companies, offering like in the way of different services and providing a smoke screen of industry competition.
Fair too often these companies are unclear about their costs, charge large up front fees for little real work and are generally ignorant to advising there client to the impact of the plan, what there creditors rights are, leading to generally and confusing for many as there credits increasing become more aggressive in their attempts to recover payment.
The Office of Fair Trading has started a probe into the industry but it is unlikely to mean any real change in the industry for the short term and as economic conditions improve and people return to paying their creators directly, its unclear what changes it can really produce, with many of these companies like not to survive in their current form.
However, the damage will have already been done, with many people paying excessive fees, lengthening the time it takes to pay their debts, increasing the over all cost and causing long term damage to there prospects.
What is needed is a more firm set of industry guidelines and a duty for debt management companies to be more upfront. In addition, many are now arguing that the aggressive sales strategies they use should be band, in particular the use of cold calling and loan broker provide information. This should result in principle, people needing debt management to seek it, instead of those with no real need using it as a service to reduce their repayment liabilities or being sold that very idea. These are needed now but are unlikely to happen.
I have worked in the debt collection industry for 6 years and in many time I have gone from the font lines as a collector, trained others and managed many more. I see my role both defender of the company that money is owed to and the clients rights and needs in a time of need. Its a hard balance but an important one for both parties.