Disreputable debt management companies exposed by FCA

Customers at three Lichfield-based debt management firms are being urged to get expert advice after the companies were found to have failed to comply with regulations set out by the Financial Conduct Authority (FCA). 

The FCA issued the warning to consumers who have employed the services of Sterling Financial Security Limited (Sterling), Haydon Associates Debt Management Consultants Limited (Haydon) and Clear View Finance Limited (Clear View). 

According to the financial regulator, these firms were taking 90p from every pound repaid by customers for themselves, rather than passing it on to creditors. This means those affected had just ten pence of their repayment going towards paying off debts. 

Each of the companies has now been banned from operating as a debt management service, but there will be many customers who have used their services who will be left with a considerably larger debt than they realised. 

The companies in question also failed to provide written statements to customers outlining the total amount of money they owed. 

Anyone who believes they may have been affected must contact their creditors immediately to ascertain how much they still owe. Only once they have access to the exact facts and figures can they begin to take action. 

They should then contact a reputable debt advisory service and switch debt repayment plans. 

Lastly, those affected can contact the Financial Ombudsman as they may be able to claim compensation. 

The FCA was keen to suggest that despite the existence of some disreputable companies, "debt advice helps millions of people get back on an even keel and people should not be put off seeking advice because of today's warning".