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CAB - Debt management companies need to clean up their act

Debt management companies are still exploiting people in dire financial straits, Citizens Advice said recently.

Welcoming the FCA’s review of debt management companies, the national charity said that too many firms are exacerbating people’s financial issues rather than helping them address their debt problems.

Citizens Advice helped people with more than 1,600 problems with debt management companies in 2014/15.

Gillian Guy, Chief Executive of Citizens Advice, said:

“Debt management companies need to clean up their act. Many people turn to Citizens Advice for help when they discover their debts have barely reduced as high fees from debt management companies means only a fraction of repayments goes to their creditors.

“The FCA has taken welcome action against debt management companies which are exploiting people in dire financial straits, but too many are still dragging their feet. Problems with the quality of advice from paid for debt management services need addressing urgently and misleading promotions including cold calling should be stopped.

“If you are struggling with debt you don’t need to pay for help. Citizens Advice offers free, independent and impartial advice available face to face to face, online and over the phone.”

Notes to editors

  1. The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
  2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
  3. To get advice online or find your local bureau in England and Wales, visit citizensadvice.org.uk
  4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.
  5. Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.
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