Compass Debt, Radio 4 and compassion from the creditors…

[Legal Beagles]

Yesterday I took part in Radio 4 You & Yours to discuss the ongoing issues affecting victims of Compass Debt Counsellors recent collapse. This is the second time You & Yours has featured the Compass matter in recent weeks. The first broadcast focused on the direct impact of the collapse…
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[PAWS]

Re: Compass Debt, Radio 4 and compassion from the creditors…

Sorry I missed this broadcast but I should be able to catch it on pod cast.
If the DCAs and creditors trained their collection staff to work with the debtor in a fair and clear manner then their would be no need for debt management companies to exist. A debtor is intimidated by the collection staff and often all their repayment plan offers are rejected. They come across a debt management company that promises to take all the phone calls, threats and pointless negotiation away. One set sum and all the sleepless nights go away. OK we know it is a bad idea but not everyone has access to such a fountain of knowledge as the members of Lbs!
Creditors and DCAs are very keen to portray their ‘caring attitude’ for the media but in reality their staff often treat people in genuine hardship despicably.


If you enter Debt Help on any search engine you get a heap of websites telling you there is an easy way to avoid repaying your debts with two or three legally worded letters (complete b*****ks) and you also get a load of slick debt management companies telling you they can take away the pain. The DMCs are a lot more credible.
Stepchange (used to be the CCCS) are fantastic but not everyone knows about them or knows they offer an impartial, free service.


CAB offices are not always the best solution. Many debtors avoid them because they are staffed by people they know or people who simply do not have the right skills or knowledge. Anonymity is what many people need due to the shame associated with debt. It is hard to believe you will get sound confidential advice from someone you normally hear discussing the whiteness of the neighbours net curtains. NOT ALL CAB OFFICES ARE LIKE THIS but if you live in a smaller town……..
Debtors turn to the debt management companies in desperation because they often have nowhere else to turn.


One point I would also like to take up is that DCAs who have bought a debt for as little as 4%of the principal owed will be inclined to accept low offers. In my experience they don’t. I have known them refuse up to 75% even though the alternative was £10 per month. Makes no sense but is a fine example of the collections staff being more interested in ‘teaching the debtor a lesson’ than making a sound business decision. This reminds me of my old bugbear -how can original creditors justify refusing settlement offers of up to 75% from the debtor preferring to sell the debt for 4% of the sum owed to a DCA?
Sorry for the rant but my main point is this -the DCAs and the original creditors, on the whole, seem to encourage an obtuse and aggressive attitude in their collections department. It is solely due to this that debt management companies exist. The debtor winds up paying more and the creditor gets less. - No one wins except the DMC.

[Gilltheblackcat]

Re: Compass Debt, Radio 4 and compassion from the creditors…

Until recently I did not know how low the DCA actually purchase a debt for. I am perhaps beginning to think that sale of debts should be outlawed, or at least restricted sevearly. The only advantage to the consumer that i can see is that an fandf can be settled cheaper. Oh, and share holders of the DCA enjoy dividends. Surely it's cheaper to get try to get your debt back than to sell it for 10%?

But then I am financially inept else I wouldn't be seeking advice here!

[charitynjw]

Re: Compass Debt, Radio 4 and compassion from the creditors…

Sorry I missed this broadcast but I should be able to catch it on pod cast.
If the DCAs and creditors trained their collection staff to work with the debtor in a fair and clear manner then their would be no need for debt management companies to exist. A debtor is intimidated by the collection staff and often all their repayment plan offers are rejected. They come across a debt management company that promises to take all the phone calls, threats and pointless negotiation away. One set sum and all the sleepless nights go away. OK we know it is a bad idea but not everyone has access to such a fountain of knowledge as the members of Lbs!
Creditors and DCAs are very keen to portray their ‘caring attitude’ for the media but in reality their staff often treat people in genuine hardship despicably.


If you enter Debt Help on any search engine you get a heap of websites telling you there is an easy way to avoid repaying your debts with two or three legally worded letters (complete b*****ks) and you also get a load of slick debt management companies telling you they can take away the pain. The DMCs are a lot more credible.
Stepchange (used to be the CCCS) are fantastic but not everyone knows about them or knows they offer an impartial, free service.


CAB offices are not always the best solution. Many debtors avoid them because they are staffed by people they know or people who simply do not have the right skills or knowledge. Anonymity is what many people need due to the shame associated with debt. It is hard to believe you will get sound confidential advice from someone you normally hear discussing the whiteness of the neighbours net curtains. NOT ALL CAB OFFICES ARE LIKE THIS but if you live in a smaller town……..
Debtors turn to the debt management companies in desperation because they often have nowhere else to turn.


One point I would also like to take up is that DCAs who have bought a debt for as little as 4%of the principal owed will be inclined to accept low offers. In my experience they don’t. I have known them refuse up to 75% even though the alternative was £10 per month. Makes no sense but is a fine example of the collections staff being more interested in ‘teaching the debtor a lesson’ than making a sound business decision. This reminds me of my old bugbear -how can original creditors justify refusing settlement offers of up to 75% from the debtor preferring to sell the debt for 4% of the sum owed to a DCA?
Sorry for the rant but my main point is this -the DCAs and the original creditors, on the whole, seem to encourage an obtuse and aggressive attitude in their collections department. It is solely due to this that debt management companies exist. The debtor winds up paying more and the creditor gets less. - No one wins except the DMC.

I believe that they insure against non-performing debts.

[PAWS]

Re: Compass Debt, Radio 4 and compassion from the creditors…

Until recently I did not know how low the DCA actually purchase a debt for. I am perhaps beginning to think that sale of debts should be outlawed, or at least restricted sevearly. The only advantage to the consumer that i can see is that an fandf can be settled cheaper. Oh, and share holders of the DCA enjoy dividends. Surely it's cheaper to get try to get your debt back than to sell it for 10%?

But then I am financially inept else I wouldn't be seeking advice here!

No you are not!
Many of the ‘smuggies’ who are fond of saying ‘never a lender or a borrower be’ try to convince us that if you suddenly find you cannot keep up repayments on a debt you are financially inept. It is not true. None of us can predict the future and if we have to borrow money and then suddenly lose part or all of our income or have an emergency that soaks up all our money then that is simply misfortune and not incompetency. In fact, I think that having to keep body and soul together on a tight budget or a negative financial situation often takes great skill and management. I believe that those who can survive hardship should be running the country -the country that seems to borrow more and more even though it is unable to manage the vast resources it already has.

[PAWS]

Re: Compass Debt, Radio 4 and compassion from the creditors…

I believe that they insure against non-performing debts.

Maybe the insurers should be told just how casually the lenders reject the chance to minimise their losses. They also get tax relief on the loss so it costs us one way or the other. If the original creditor is one of the banks bailed out by the tax payers money then it is a double whammy; a blow upon a bruise!

[charitynjw]

Re: Compass Debt, Radio 4 and compassion from the creditors…

Maybe the insurers should be told just how casually the lenders reject the chance to minimise their losses. They also get tax relief on the loss so it costs us one way or the other. If the original creditor is one of the banks bailed out by the tax payers money then it is a double whammy; a blow upon a bruise!

IMHO

They make the rules; we are just told we have to suffer them gladly!

(Though on reflection, just might not be the correct word to use!)