The industry regulator for the debt management sector, the Financial Conduct Authority (FCA), has imposed a requirement on Bournes Debt Solutions.

The regulator has put in force that the firm’s bank accounts cannot be dealt with in any way without written consent from the FCA. Bournes Debt Solutions has volunteered to stop entering into contractual arrangements with new customers that involve the carrying on of regulated debt management activities.

Earlier this year we saw a similar situation with Debt Help & Advice and First Step Finance, who both ceased trading, leaving their customers in the lurch with their creditors.

As of today, 17 September 2014, the FCA imposed additional requirements on Bournes Debt Solutions, meaning the firm must:

• Cancel all direct debits set up with their customers and inform them of this in writing
• Postpone all creditor payments on behalf of their customers until further notice and inform the creditors of this in writing
• Write to their customers asking them to cancel their standing orders with the firm
• Return any funds that are received from customers by way of standing order or otherwise, either on or after the date of this Notice within 7 days beginning with the day on which the funds are received

Once Bournes Debt Solutions has completed the above they must provide the FCA with a copy of the written notifications sent, together with a list of all customers and creditors who received them.

Debt Management Plans & IVAs for Bournes Debt Solutions’ customers

Customers of Bournes Debt Solutions may wish to continue with their Debt Management Plan and need to decide if they wish to continue paying for the management of their plan. Free alternatives are available and listed on the Money Advice Service (MAS) website.  If they don’t make new arrangements then they may face renewed contact from creditors, though in previous cases FCA has urged creditors to exercise appropriate restraint.

If a customer of Bournes Debt Solutions is currently in a Debt Management Plan that still has five or more years to run, they may wish to consider looking at an Individual Voluntary Arrangement (IVA).

An IVA usually lasts 5 years and is an agreement between the debtor and the creditor to pay back an affordable and manageable amount per month. Interest is frozen and a portion of the debt is written off, plus an IVA is usually far shorter to complete than a typical Debt Management Plan.

ClearDebt and sister company Abacus will provide free debt management plans and protocol compliant IVAs, where this is the most appropriate solution, to Bournes Debt Solutions customers. We will endeavour to provide all the free alternatives available.

We have done it before and hope to assist customers of Bournes Debt Solutions in this most difficult situation.

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