Warning over debt management companies

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Warning over debt management companies

Thu 4th Feb 2010

Consumers may be at risk of falling prey to debt management companies that charge fees for their services, according to moneysupermarket.com.

Research by the price comparison website has found that 20,000 people are signing up to debt management plans each month in an attempt to get their finances under control.

While most people are still heading to free services like the Citizen's Advice Bureau and CCCS, long waiting times mean that many are looking to paid-for help instead.

But consumers need to be aware of long waits before they are charged for their debts, as the interest will mount up in this time and make the problem worse.

Tim Moss, head of loans and debt at moneysupermarket.com, said: "We have heard of horrific cases where of up to six payments are taken in charges before a creditor is paid."

For consumers who are looking for help with their credit profile, moneysupermarket.com has launched a credit monitoring service, which enables consumers to compare credit reports.

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