Chiltern Debt Management » debt help

Ministry of Justice investigates “misleading” claims management company

Nathan Cameron — Tue, 02 Mar 2010 11:28:00 +0000

Another claims management company, Cartel Client Review, are being investigated by the Ministry of Justice, following reports that their advertised debt management claims are misleading.

Ministry of Justice investigates misleading claims management companies

The company’s alleged misleading claims were highlighted following an investigation by the BBC’s Money Box programme, where it was reported that customers who had paid hundreds or thousands of pounds to write off debts within 6 to 12 months were still waiting in limbo two years later.

The company uses phrases such as: “You may have a claim to have your outstanding credit card debt completely written off!” in its advertising, however firm evidence of such claims being successful remains in doubt.

Today, a spokesperson for the Ministry of Justice’s Claims Management Regulator said: “The Claims Management Regulator is investigating Cartel Client Review Ltd. and associated businesses.

“We are not able to comment on the specific issues we are investigating as to do so could jeopardise the progress and outcome of these investigations.”

Consumer groups have targeted claims management companies (which attempt to exploit loopholes in lenders’ small print to write off debts), as they have come under fire for their misleading advertising and huge upfront fees.

In an interview for The Times newspaper online, the chief executive of consumer group “Which?”, Peter Vicary-Smith, advised people to avoid claims management companies and recommended people who are struggling with debt management problems to seek free debt advice or to speak directly to lenders for debt help.

A spokesperson for Cartel blamed poor reporting from “a certain radio programme” for prompting the investigation by the Ministry of Justice.

Reputable debt advice organisations have also spoken out about the misleading claims of some claims management companies.

Ivan Cooper, Chairman at debt management specialists Chiltern, said: “Some of the most vulnerable people in society are being lured in with false or misleading advertising claims from some claims management companies, which is outrageous.

“Reputable debt advice organisations, like Hamilton Locke, The Debt People or Chiltern, recommend seeking impartial debt help before agreeing to any debt solution.”

Ministry of Justice investigates “misleading” claims management company is a post from: Chiltern Debt Management

Retail Boost to End the Year

Mike Chidgey — Wed, 23 Dec 2009 11:58:39 +0000

Bargain Seekers

Shoppers are ignoring the recession and had a £5billion Christmas spending spree this weekend as nearly half the population hunt for last-minute gifts. The nation’s high-street tills rang up sales of more than £3 billion yesterday up by £1 billion in comparison with the same day last Christmas. Retail experts are predicting another £2 billion will be spent today as the big retail chains launch their January sales two weeks early, offering huge discounts of up to 50%.

Braving the freezing weather conditions yesterday, bargain seekers flooded into shopping centres right across Britain looking to snap up any bargains going, anything from more toys for the children to flatscreen provided they had freeview of course.

By 11am, car parks at many of Britain’s biggest regional shopping centres, including Lakeside in Thurrock, Essex, and the Metrocentre in Gateshead, were overflowing.

The cost of digital cameras, iPods and laptops have been slashed, and John Lewis reported record sales of TVs and home cinema systems – up 21 per cent on last Christmas.

Fashion chains including Oasis, Hobbs and Warehouse have cut prices by 50 per cent on selected items while others, such as Dorothy Perkins, are offering 25 per cent off.

With VAT due to revert to 17.5% on 1st January many are getting in ahead of the increase and saving the difference.

On the dark side there is a fear that some people will be overstretching themselves and will end up seeking debt advice in the new year.

Retail Boost to End the Year is a post from: Chiltern Debt Management

Debt Management worries ease as consumer borrowing falls

Ivan Cooper — Tue, 01 Dec 2009 10:11:36 +0000

Debt Management providers have welcomed the news that consumer borrowing has recorded its biggest fall since Bank of England records began some 16 years ago. There has been a large increase in the number of people struggling with debt problems, and having to seek financial advice to improve their situation.

Consumers have been turning to Debt Management and IVA providers in increasing numbers in an effort to avoid total financial ruin. Since the start of the current financial meltdown, there has been a sharp increase in unemployment as well as repeated falls in the average value of property.

These factors, along with wage freezes, and other influences, have left many consumers unable to cope with their unsecured loans and credit card debt problems.

Debt management and IVA providers urge people to speak to an expert before it’s too late. There are many different solutions available for people that need debt help, the important thing is to act now, before the situation gets any worse.

This news that unsecured borrowing had declined has added weight to the argument that consumers are more likely to pay off unsecured debts, instead of saving up during periods of low interest rates.

The number of new mortgages approved during October rose for the 11th consecutive month, whilst at the same time unsecured loans declined by £713 million in October compared, when compared with the previous month. The number of people applying for re-mortgages remained subdued.

unsecured loans down, but credit card debt up

There was a surprise increase in credit card debt levels, as spending on plastic increased by £134 million during October, compared with the previous month. This was more than offset by the decline in other forms of debt such as loans for cars, hire purchase agreements and unsecured bank loans.

The total of outstanding unsecured loans in the UK is around £228 billion, which is a similar figure to the beginning of last year. This shows that despite the best efforts of consumers to reduce their borrowings on unsecured loans, the figures remain more or less unchanged.

If you are struggling with your finances, and having difficulty making repayments on credit card debt and other loans, the best thing to do is contact an IVA or Debt Management provider for some help and advice. DEMSA, the Debt Managers Standards Association, have received approval for its code of practice under the Office of Fair Trading Consumer Codes Approval Scheme for advice for debt management plans (DMP) and Individual Voluntary Arrangements (IVA). A list of DEMSA members can be found on their website, demsa.co.uk.

Debt Management worries ease as consumer borrowing falls is a post from: Chiltern Debt Management

Water bill debt help soars

Nathan Cameron — Tue, 29 Sep 2009 09:12:00 +0000

Latest figures released show that the number of vulnerable people needing debt help with their water bills has soared by 20 per cent in the last year.

According to water regulator Ofwat there are many people who could relieve debt problems and benefit from lower bills, but thousands aren’t using the reduced WaterSure tariff even though they qualify.

The WaterSure tariff, previously the Vulnerable Groups Scheme, is open to people on water meters who receive tax credits or benefits and have responsibility for three children or more (aged under 19).

It was introduced in 2000 and allows those in the scheme to pay no more than the average household bill for their region.

The WaterSure tariff is also available to households where somebody has a medical condition that means they need more water, such as Crohn’s disease or Eczema.

Ofwat Chief Executive Regina Finn said: “Unfortunately there are still many people out there who could benefit from the tariff who do not know about it.”

Ivan Cooper, Chairman at debt help specialists Chiltern, said: “Thousands of water customers are struggling with their bills because they aren’t being made aware of the reduced tariff.

“More should be done to offer debt advice to vulnerable people who are struggling to maintain their payments, as no doubt they will also be struggling to get out of debt with other payments too.”

Ofwat recently revealed how much companies could charge for water and sewerage in 2010 to 2015, announcing that the typical bill in England and Wales should be cut by £14 to £330 over the five years, excluding inflation, although the companies had wanted prices to rise.

Water bill debt help soars is a post from: Chiltern Debt Management

Homeowners not receiving full debt help from lenders

Nathan Cameron — Fri, 21 Aug 2009 09:12:53 +0000

Despite the base rate of interest being cut by 4.5 per cent over the last twelve months, mortgage lenders have failed to pass on this debt help to their customers – only dropping the rates on their customer’s mortgage debt by an average of 1.3 per cent.

Figures from moneysupermarket.com show that the average interest rate on all new fixed and variable rate mortgages (across all to loan value ratios) stands at 5.12 per cent, down from 6.42 per cent this time last year. However, the base rate of interest has fallen to a record low of 0.5 per cent from 5 per cent over the same period of time.

Hannah Skenfield of moneysupermarket.com says: “The Bank of England base rate has dropped by 4.5 per cent since August last year, however despite this low rate environment there is a significant disparity in the amount of this saving being passed on to mortgage borrowers by the main UK lenders.”

Ivan Cooper, Chairman at debt management specialists Chiltern, said: “By failing to pass on the drop in interest rate to customers, lenders are failing to carry out what the government and Bank of England are trying to achieve – which is pumping more money into the troubled economy and relieving people’s finances.

“This may delay the recovery from the recession, meaning more people will suffer from defaults and missed payments as they aren’t helped from their lender and their household income is squeezed.”

Lenders counter this arguement by saying that the rates they pay for funding through the wholesale money markets aren’t linked directly to the Bank of England’s base rates. However, the Libor rate – the rate at which banks borrow from each other – has still fallen by 2.07 percentage points from 2.81 per cent to 0.74 per cent over the same period.

Banks add that their higher pricing reflects the increased risk that higher unemployment and falling house prices pose. Some have deliberately tried to look less attractive to borrowers, in a bid to shrink their lending book and exposure to these debts.

The Council of Mortgage Lenders added that mortgages advances by all lenders totalled £261 billion during 2008, 28 per cent below the peak of £364 billion in 2007.

Homeowners not receiving full debt help from lenders is a post from: Chiltern Debt Management

Debt problems for major card shop

Nathan Cameron — Thu, 21 May 2009 15:24:58 +0000

If you’re relying on a birthday card with money in it to solve your debt problems, you may have some wait ahead. Card specialist Birthdays, has been placed into administration by parent company Clinton Cards, threatening the jobs of 2,000 of its staff.

The firm, based in Bury – Lancashire, announced that all 223 stores will continue trading whilst administrators explore all options, but the poor trading conditions have meant that the £7m annual losses cannot be sustained.

For the 2,000 staff who face losing their job, the news will frighten many to make sure their finances are in order. A reduction or loss of earnings can have disastrous effects on household finances, plunging many further into the red as they rack up loans, overdrafts and credit card debts.

Debt help organisations are braced for the upturn in numbers of individuals seeking their impartial debt advice, and have warned people who think they may be in trouble now or in the future to deal with their finances sooner rather than later.

A spokesperson from leading debt management company Chiltern said: “If you use any form of credit regularly each month to pay for essential items, like food, fuel or household bills, it’s not a good sign. Ideally these should come out of the household budget.

“By using credit cards and overdrafts for these things you go a little further in debt each month and if left untouched you could be developing serious debt problems which could cost you dearly. Eventually the credit will run dry and you will be left with a mountain of debt.”

Debt management companies, like Chiltern, can help people who are in this situation by offering budgeting and debt advice, so that finances are organised and made simpler. They can also help you find out where your problems are stemming from and suggest ways to get out of debt.

For people who could benefit from a specialist solution, products like debt management plans (DMPS) or Individual Voluntary Arrangements (IVAs) may also be recommended. These help to prioritise all of your finances and regain control, whilst still repaying all of your unsecured debts.

All outstanding unsecured balances can be gathered into one single monthly payment, which is based on how much you can realistically afford. Repayments are then rescheduled over a longer period of time to make them more affordable – thus making finances simpler and easier to manage.

For people who are made redundant or where a company goes bust and jobs are lost, debt management plans (DMPs) may offer a ray of light. Debt management plans are a flexible solution and repayments can be altered to suit your changing financial circumstances, so can be a useful way of ensuring all credit commitments can be met whilst you try to secure another job.

And when you do find another job you can simply increase your repayments and satisfy your contractual obligations. Just don’t expect too many “New Job” cards, as there may not be a shop to buy them from!

If you would like to find out more about debt solutions such as debt management plans or IVAs, or for immediate debt advice, please call the number at the top of this page.

Debt problems for major card shop is a post from: Chiltern Debt Management