Blu Debt Management says it has seen a steep increase in the number of brokers approaching the company for help after clients pay upfront fees to wipe out their unsecured borrowing.
In the event that claims fail, Blu Debt Management says many clients are left worse off not only due to the upfront fees but also because some clients are advised to stop making their monthly payments while the claims firms try to get their agreements cancelled.
The debt management company say brokers have also been affected, as many advisers entered the unenforceable credit agreement business but then discovered the firms they dealt with were not reputable.
Blu Debt Management says many affected brokers are now turning to debt management to help repair their clients’ damaged finances, and to find a new income stream.
James Briggs, sales director at Blu Debt Management, says: “Over the past couple of years numerous advisers have diversified and entered the unenforceable credit agreement market in good faith.
“But following the closure of several firms we are now seeing many of these advisers seeking fair and transparent debt solutions in order to rebuild the faith of their client bank.”