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Fee Chargers’ Business Activities Scrutinised

High Risk

Rolls of sticky labels with toxic symbol.

Fee charging debt management companies have been labelled as a ‘high risk’ category by the Office of Fair Trading (OFT) who are scrutinising these companies’ fair treatment of clients.

Their business activities and ‘credit competence’ exhibited when obtaining their credit license (a legal requirement enabling them to operate) are also under scrutiny according to Credit Today.

Ray Hall, the director of consumer credit and consumer protection enforcement from the OFT, said:

“From April 2008 applicants [for their credit license] from this high risk group will be more scrutinised and supervised over compliance [to OFT regulations].”

Unethical

Whilst it is paramount that all debt management companies (including free debt management companies such as Payplan) adhere to OFT regulations and the conditions of their credit license, Payplan believes that it is not ethical to charge clients fees for the privilege of providing debt management and advice.

Fee charging debt management companies typically charge their clients fees of about 17.5% of their monthly payment to their debts and are taking money that their clients could use to pay back their debts more quickly.

TV Advertising

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Unlike many fee charging debt management companies, Payplan do not advertise on TV and rely on their ethical reputation amongst Citizen’s Advice Bureaux, and various unions, employers and creditors.

For free and ethical debt help, call Payplan on 0800 280 2816 or submit your financial circumstances using their online debt assessment. A sympathetic and experienced debt adviser will then be able to assist you.

Written by on December 14th, 2007

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