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Claims firms leaving clients and brokers worse off

Clients and brokers are increasingly turning to debt management companies who find themselves financially worse off after challenging the terms of their credit agreements.

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.”

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  • Tony Hall 10th August 2010 at 6:18 pm

    I have 2 UCA’s with Knightsbridge Claims management and have found them completely incompetent. My cases have been ongoing for over 1 year 8 months and I am no further to finding out if my cases are enforceable than the day i started. I have requested refunds due to the amount of time involved and have been refused. they do not answer letters or return calls. They are nothing but a rip off company and I shall be reporting them to the ministry of justice. How this company is allowed to continue trading is beyond me.

  • Ronnie 24th May 2010 at 11:38 pm

    Having worked for a claims management company that has recently been suspended by the MOJ,I looked around for a debt management company that that would look after my clients fairly and with efficiency. I am glad I chose Blu as the service from the staff there has been tremendous.

  • Paul Chambers 20th May 2010 at 1:36 pm

    The OFT has been far too slow in taking decisive action on claims companies, many of whom were being run by the young and inexperienced looking to make a fast buck. At the very first sign of concern the OFT should have sent out clear warnings to consumers and investigated companies before they had the chance to shut the door. What has happened at Cartel (Carl White is certainly not young and naive) is nothing short of disgusting and the sorry reality is that those heading the company will be allowed to just slip away and enjoy their ‘dividends’.

    Sadly this market appeared when times were at the very lowest for Brokers/FA’s and it was tempting to test the water!

    Debt management, once a no-go for Brokers/IFA’s has become an essential part of their portfolio. The consumer really must be made aware of this service. All too often I have seen the consumer being guided down the IVA/Bankruptcy route when it is clearly not ‘best advice’ when they had equity. I would suggest that Accountants become well versed also – how many clients have they seen loose their businesses or homes when clearly not necessary. Ignorance can have a dreadful effect on the poor client.

    I’m all for debt management as long as it is closely monitored. Charges should be clear and companies should be made to disclose statistics regularly in order to help the consumer make an informed choice.

  • Lorraine 19th May 2010 at 3:55 pm

    This is a valid but one-sided view. The claims industry regarding unenforceable and unfair credit agreements is still very new and there are many firms out there that are trying their best to ensure that the laws are interpreted correctly and that if a consumer has been disadvantaged by an unfair contract, or is bound by one which is invalid, then they should be able to challenge that. Most of the problems have been caused by the MoJ handing licences out too readily and then not policing the industry well enough. Thousands of companies have been let loose to offer this service and have used misleading adverts to entice customers into parting with their cash. There’s nothing wrong with charging a fee if you do provide the service. Recent test cases in court have meant that the ATE insurance providers have stopped stumping up the insurance required to protect the claimant (consumer) which has caused delays. I have always felt that as this service involves a person’s finances, that there should be some involvement from a financial regulatory body. Telling consumers to stop paying their monthly payment could be devastating to someone’s credit file and future borrowing capabilities.

  • Smirn Off 19th May 2010 at 10:41 am

    Funny how all these comments are bigging up Blu isn’t it????? Debt Management firms, your time will come! We have been approached by Blu to enter a client into Debt Management when they quite clearly have other (better?) options available to them. This is all propeganda. Debt Management is EVIL, great for the client in the short term, but HELL for at least 5 years after.

  • Smirn Off 19th May 2010 at 10:39 am

    Funny how all these comments are bigging up Blu isn’t it????? Debt Management firms, your time will come! We have been approached by Blu to enter a client into Debt Management when they quite clearly have other (better?) options available to them. This is all propeganda. Debt Management is EVIL, great for the client in the short term, but HELL for at least 5 years after.

  • Vince Loggia 18th May 2010 at 6:07 pm

    I have also been involved with a claims management company and my clients have been left out on a limb with no conclusion to their claim.
    We have turned our business towards debt management for our clients in need of help and have found Blu to be very professional with a service next to none.

  • Alan Paton 18th May 2010 at 3:36 pm

    Re John Higgins 2.00pm

    ‘The moral of the story is do not work with a company operating in either market that charges upfront fees.’

    Not always the case when it comes to debt management, I feel. I’ve had two clients who used Payplan as there was no upfront charge and monthly management fee. Although the client had access to an online case system it was clear the clients file was not getting updated and the progress of the plan was shocking which lead to even more stress. These clients have opted to transfer to debt management companies who charge but the fees were made clear from the outset and they are both happy with the set-up.

    I wouldn’t recommend companies where they only disclose fees once they have the client’s information in their grasp. A structured management fee can often mean good customer support. With regard to upfront charges I would say up to 2 payments is fair so long as the dm company makes immediate contact with the lenders on behalf of the client. Can’t believe the amount of companies charging six months plus upfront – talk about leaving the customer vulnerable!

  • Brian Potter 18th May 2010 at 2:43 pm

    I agree with you totally John. I had some really bad experiences in this marketplace until I started working with Knightsbridge Claims Management. They only charge the client once the claim has been successful and therefore there is no up-front fees. In addition to this they have just secured funding for their cases.

  • john higgins 18th May 2010 at 2:23 pm

    I have used Knightsbridge on the claims side and they don’t charge upfront fees on UCA’s and they are very good to deal with.

  • john higgins 18th May 2010 at 2:00 pm

    There are some really bad debt management companies out there as well as some really bad claims management companies. If you pick the wrong company in either market to work with it will damage your client relationship. However when you choose the right company it will improve your client relationships.

    The moral of the story is do not work with a company operating in either market that charges upfront fees.

    Knightsbridge operate in the claims market and don’t charge upfront fees for UCA claims and you need to check them out.

  • J Harrington 18th May 2010 at 12:27 pm

    I’ve used Blu – good company. Appear to know their stuff unlike the two dm companies I had tried last year who didn’t look after the client and left me with the headache!

  • Mark Williams 18th May 2010 at 12:12 pm

    Having been involved with a Company dealing in unenforceable claims, I would have to say I completely agree with the comments made by James Briggs at Blu.
    Many clients paid an upfront fee and their claim was “in the system” for a period of time, in some cases exceeding 18 months. What we found is that the clients were increasingly unable to deal with their commitments at the end of this period.
    We have turned to Blu to deal with our clients cases and have found their proposition and service second to none.