Some debt management firms 'exploit borrowers'

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Some debt management firms 'exploit borrowers'

Wed 28th Oct 2009

Price comparison site moneysupermarket.com has advised consumers to be cautious when choosing a debt management company to help them with their money troubles.

Tim Moss, head of loans and debt at the website, made his comments after the organisation announced that it would only list Debt Managers Standards Association-accredited businesses on the site.

He pointed out that for some people the free service offered by debt charities is not as quick or personal as they require, so they opt for a paid-for service.

However, consumers must be aware that some companies are looking to take advantage of "vulnerable" people, he continued.

Mr Moss explained: "We have heard many horror stories of debt management companies on our forums, including some taking up to six payments from a customer before even contacting the customer's creditors."

This week, research by moneysupermarket.com showed that 37 per cent of people felt cheated when they were informed that the cheapest debt is paid off first on their bills.

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