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.”