Guardian Debt Management warns against “unethical” firms

Brokers should be wary of debt advice firms charging large upfront fees while offering high referral fees, warns Guardian Debt Management.

The debt specialist claims that some firms charging large upfront fees are being “completely unethical” and are not focussed on the long-term welfare clients.

This, Guardian Debt Management claims, risks damaging the broker/client relationship.

The company says brokers should look to help clients who are struggling financially, but adds that fee structure transparency should be key.

David McCann, managing director at Guardian Debt Management, says:
“The charging of large upfront fees is completely unethical.

“How firms can justify an initial charge of over £1,000 when this could be used to try and help satisfy a financial commitment to an outstanding debt is beyond me.

“A large referral fee can appear tempting in the current economic climate but brokers need to take the long-term view as it is imperative that their client will be properly looked after.”

He adds: “Brokers should be doing thorough checks on potential partners across the whole of the industry and this is especially applicable for those looking to debt solutions.

“The sector continues to be tarnished by a rogue element but it is important to stress that there are good firms out there that can offer genuine solutions to clients whilst opening up broker revenue streams.”