Debt Management Companies

[AKMild]

http://www.bbc.co.uk/news/business-13568152

Why am I not surprised at this story? It's the same model as some of the less salubrious claims management businesses which were full of 'we'll get you a good deal' rhetoric but who hung on to client money then mysteriously went out of business. I bet the directors and shareholders of these bust businesses had and continue to have a decent lifestyle. This sort of business is not nearly regulated tightly enough and crackdowns by the government after people have been ripped off smack of stable doors being shut well after horses have bolted.

[Gromit]

Companies such as this are thriving because of the recession and job cuts.

What is alarming is that people are allowed to run up credit card bills of £40,000. there should be. A national limit much lower than that, say £10,000 and there should be a legal limit on the number of cards one person is allowed (not more than 2).

Some will say they deserve everything that happens to them for not mamaging their credit responsibly, but it could be argued that the creditors who gave them such huge amounts of money they could afford to repay also deserve not to be paid.

[R1Geezer]

the stupidity of human kind never ceases to amaze me. The sad thing is that they'll have £X in debts and probably nothing to show for it!

[Postdog]

I'm with Gromit here. I remember the days when the only credit you could get was HP, you needed a deposit, and basically if you couldn't afford it you went without or saved.

We also need a better awareness of the implications of getting credit, and as a responsible borrower (I know my own limit I want to owe and keep it) I sort of object to subsidising those who are lousy at personal finances when things go wrong.

[AKMild]

I agree that credit is far too easy to come by and can often store up problems for the future (on a national scale that's what much of the 2008 banking crisis was all about - the banks had over-lent based on optimistic forecasts of future cashflows being sustainable). There is irresponsibility on the part of both borrowers and lenders. However, the thing that annoys me about this news story is the fact that a debt management company has been able to get away with taking money off clients and not paying it to creditors. The directors of this company ought to be hung out to dry if they've knowingly done this.

[kinell]

certainly going back a few years (not sure now) but my credit cards were regularly having the amount available increased by the card issuer.... wihout a request,

the rule was here are the available funds..you tell us if you dont want the facility..

default selling i believe is the term,

i have three credit cards with available credit of £13K, £11K and £7.5K,

in the more recent climate if i was to 'max' these the payments would be worryingly high,

and for many the repayments unaffordable

who said the banks only have themselves to blame?

[Gromit]

I have a couple of credit cards, but only use them for convenience for purchasing things over the internet. I am a member of a Credit Union which is a far better way of borrowing money. Apart from costing less than the banks, the Credit Union makes the borrower prove they can repay on a regular basis before they can take a loan. You buy shares (which pay better interest normal savings accounts) and you borrow against your shares only after 3 months. Then you can only borrow 3 times the amount of shares you own.

I have used this method several times for large purchases and I find it works very well and saves me money.

http://www.tameside.gov.uk/creditunion

[bazwillrun]

On our ridiculous continuing foreign aid handouts

"It is something we should be very proud about. Contrary to popular belief, we are a very wealthy country, and our money does save lives and improves lives"

On the state of our country
"thriving because of the recession and job cuts."

Well, now theres a thing !!

[Gromit]

Recession and wealth are not mutually exclusive of each other. We can be in recession and still be the 6th most pofitable and richest country in the world. Recession just means we are not growing as previously we were.

The job cuts recently announced in the public sector or ideological rather than the result of recession. Conservative Governments have always favoured less services and a smaller state. They are just using the the excuse ofausterity measures to persue
Their usual favoured policies.

[bazwillrun]

wriggle, wriggle, squirm squirm

[boxtops]

This story is very similar to the recent one which revealed that companies allegedly helping people with their debt were keeping the first couple of payments themselves to cover their fees, not passing them on to the credit card companies - thus causing further late payment fees and extra charges to the people they were supposed to be trying to help.