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Re: DCM Money Solutions - In administration
Hi rednelly
This is a good and I suspect well thought out response, I have to give you that.
Im pretty impressed to be honest (try not to break into a wry smile or go a little faint at this comment
) and would say that in my opinion you have recovered well from the initial 'jumping in' if you like.
However (and I know this will come as no surprise to you) there are some issues I wish to address and maybe add a little balance so to speak.
I am going to have another look through what in my opinion has developed into a professional and fascinating thread first and hope to respond later with the same respect, manner and tone
Maybe we can all learn something.
Originally posted by rednelly
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Well, it would be strange if we did not robustly promote IVAs - given that that is where we make our money. However, we find there is no need to pressure anyone into a solution - because there are always going to be enough people who genuinely need what we provide - it's just vital for our long term reputation in the market that we always do our utmost to give appropriate advice - it's, in my opinion, one of the reasons ClearDebt has grown more slowly than some competitors.
Well, first, we don't - currently - get many people who are suitable for DROs - the criteria are just too restrictive. Come April, this may change. I think it's a damn shame the last Government decided to enable the DRO (other than that it undoubtedly helps some who can't afford to go bankrupt) - the Enforcement Restriction Order would have been far more helpful and would have encouraged people to deal with money worries at the time they first occur - rather than waiting.
Personally, I wish we had something like Scotland's Debt Arrangement Scheme (DAS) in England and Wales.
OK - back on topic. In all our calls we advise people that there is free advice available (we have to). Where bankruptcy or DRO is advised we specifically signpost sources of help or explain to an individual how they can begin the process themselves. Occasionally, with people who want to choose bankruptcy and who either have some resources, have complex financial situations (some self-employed people for example) and/or feel the process is beyond them we will refer them to a specialist who assists with the form filling for a fee: this is never more than a handful a month.
This, and your next paragraph - quoted below, raise an interesting point. It's my view that those who can afford debt advice and the administration/execution of a debt resolution scheme should pay, rather than the taxpayer. It's also my view that the creditors (who also benefit from effective debt resolution) should pay too.
ClearDebt set itself out to be the lowest cost IVA provider in the marketplace and we were probably responsible for the IVA gravy train hitting the buffers a few years ago. Since the IVA protocol came in we've always charged fees that are protocol compliant - but we still deal with unsecured debts down to £10,000 in an IVA and sometimes lower - so our IVA book radically overlaps many competitors debt management book.
With people who really cannot afford to pay we do, of course, reiterate the availability of free advice agencies.
People who don't want to follow a formal debt remedy, in my view, fall into two categories - those who are struggling less than they think and who can be advised that belt-tightening will suffice and those who genuinely need help but can't pull their head out of... ... the sand. In the latter case, we signpost all the advice there is, but some of my colleagues in advice think that the chance of the caller doing anything is remarkably small.
I don't think we are untypical in the industry and I am told that, of the calls we receive, roughly 50% are people we can help and that people who are worried but solvent represent just over half the remainder and people who we cannot offer our service to (but to whom we will still give initial advice) represent just under half the remainder.
Below is an article setting out Money Advice trust's position on the non fee-charging sectors's capacity issues.
Debt charities overwhelmed by recession - Times Online
It's older than I remember - but I don't think anything material has changed. It continues to be stated in a variety of places and was raised when CA lost face-to-face debt advice funding (and then - rapidly - had it temporarily reinstated) a short while ago.
Publically, they've stressed lack of capacity less - this is from December 2010:
"Joanna Elson OBE, Chief Executive of the Money Advice Trust, which commissioned the research, said: “The last few years have required debt advice charities like ours to bring about a step change in our capacity, not just to help people out of their immediate debt problems, but also to help them back into financial health with longer term planning.
“Should unemployment rise next year to the extent that independent forecasters predict, together with potential interest rate rises, it seems we will face further challenges in meeting new demand for help. However, the research has also unearthed a challenge that exists already — namely that only one in six people with a debt problem seeks advice. It is vital that anyone struggling with debts is able to make informed decisions and understand all of their options; the best way to do that is to seek advice from independent experts."
I think you need to read between the lines here: I am convinced there are still real capacity problems.
Thanks for the above - delighted to discuss other issues. And thanks to the forum for listening. I'm afraid I sort of expected knee-jerk hostility and was pleasantly surprised to get robust questioning. We'll take pains to respond whenever we can - but it may not always be immediately.
Well, first, we don't - currently - get many people who are suitable for DROs - the criteria are just too restrictive. Come April, this may change. I think it's a damn shame the last Government decided to enable the DRO (other than that it undoubtedly helps some who can't afford to go bankrupt) - the Enforcement Restriction Order would have been far more helpful and would have encouraged people to deal with money worries at the time they first occur - rather than waiting.
Personally, I wish we had something like Scotland's Debt Arrangement Scheme (DAS) in England and Wales.
OK - back on topic. In all our calls we advise people that there is free advice available (we have to). Where bankruptcy or DRO is advised we specifically signpost sources of help or explain to an individual how they can begin the process themselves. Occasionally, with people who want to choose bankruptcy and who either have some resources, have complex financial situations (some self-employed people for example) and/or feel the process is beyond them we will refer them to a specialist who assists with the form filling for a fee: this is never more than a handful a month.
This, and your next paragraph - quoted below, raise an interesting point. It's my view that those who can afford debt advice and the administration/execution of a debt resolution scheme should pay, rather than the taxpayer. It's also my view that the creditors (who also benefit from effective debt resolution) should pay too.
ClearDebt set itself out to be the lowest cost IVA provider in the marketplace and we were probably responsible for the IVA gravy train hitting the buffers a few years ago. Since the IVA protocol came in we've always charged fees that are protocol compliant - but we still deal with unsecured debts down to £10,000 in an IVA and sometimes lower - so our IVA book radically overlaps many competitors debt management book.
With people who really cannot afford to pay we do, of course, reiterate the availability of free advice agencies.
People who don't want to follow a formal debt remedy, in my view, fall into two categories - those who are struggling less than they think and who can be advised that belt-tightening will suffice and those who genuinely need help but can't pull their head out of... ... the sand. In the latter case, we signpost all the advice there is, but some of my colleagues in advice think that the chance of the caller doing anything is remarkably small.
I don't think we are untypical in the industry and I am told that, of the calls we receive, roughly 50% are people we can help and that people who are worried but solvent represent just over half the remainder and people who we cannot offer our service to (but to whom we will still give initial advice) represent just under half the remainder.
Below is an article setting out Money Advice trust's position on the non fee-charging sectors's capacity issues.
Debt charities overwhelmed by recession - Times Online
It's older than I remember - but I don't think anything material has changed. It continues to be stated in a variety of places and was raised when CA lost face-to-face debt advice funding (and then - rapidly - had it temporarily reinstated) a short while ago.
Publically, they've stressed lack of capacity less - this is from December 2010:
"Joanna Elson OBE, Chief Executive of the Money Advice Trust, which commissioned the research, said: “The last few years have required debt advice charities like ours to bring about a step change in our capacity, not just to help people out of their immediate debt problems, but also to help them back into financial health with longer term planning.
“Should unemployment rise next year to the extent that independent forecasters predict, together with potential interest rate rises, it seems we will face further challenges in meeting new demand for help. However, the research has also unearthed a challenge that exists already — namely that only one in six people with a debt problem seeks advice. It is vital that anyone struggling with debts is able to make informed decisions and understand all of their options; the best way to do that is to seek advice from independent experts."
I think you need to read between the lines here: I am convinced there are still real capacity problems.
Thanks for the above - delighted to discuss other issues. And thanks to the forum for listening. I'm afraid I sort of expected knee-jerk hostility and was pleasantly surprised to get robust questioning. We'll take pains to respond whenever we can - but it may not always be immediately.
This is a good and I suspect well thought out response, I have to give you that.
Im pretty impressed to be honest (try not to break into a wry smile or go a little faint at this comment
) and would say that in my opinion you have recovered well from the initial 'jumping in' if you like.However (and I know this will come as no surprise to you) there are some issues I wish to address and maybe add a little balance so to speak.
I am going to have another look through what in my opinion has developed into a professional and fascinating thread first and hope to respond later with the same respect, manner and tone
Maybe we can all learn something.
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