credit report UK from ExperianHere at Lewis Alexander Financial Management we speak to many people daily about their personal debt problems, it never ceases to amaze our compliance department the amount of bad financial advice that vulnerable consumers are receiving regarding the clearing of personal debt and the associated problems they may have.

Lewis Alexander can reveal that one of the large debt charities is in fact offering debt management plans as a more viable solution to vulnerable consumers than a Debt Relief Order to clear their debts, this is for those that qualify for both.

For a simple and short explanation, if a person owes under £15k to unsecured creditors and can afford no more than £50 per month as a total contribution, then this person, subject to having no assets totalling a worth greater than £300, can apply for a Debt Relief Order.  DRO’s or Debt Relief Orders clear debts within 12 months and any remaining debt is usually written off by the respective creditors after the 12 monthly payments have been made.  These Debt Relief Orders or DRO’s do not suit everyone but most clients will qualify for a number of solutions when an income and expenditure statement is taken, at which point the debt advisor should offer the best advice based on the consumers current and predicted future personal circumstances.

The Debt Relief Order is just like a mini IVA or Individual Voluntary Arrangement but has timescale and debt value differences. It allows people with less debt to clear the total they owe sooner than a personal debt management plan normally would allow.

As stated above, DRO’s do not suit everyone as they are a form of insolvency. However, why is such a prominent debt charity not offering people who qualify for both a Debt Management Plan and a Debt Relief Order the option? Is it because they get more fees if the client pays back via a debt management plan or arrangement?

  • Why has the “free to client” sector got the government to impose restrictions on the fee charging sector (who in the main are mostly compliant) when they cannot follow simple guidance and employ compliance themselves?

We choose the words “bent” & “crooked” carefully and hope that those that speak to a so called free debt charity also take a wider view on advice available and seek it.

  • The saying “Cheap is dear” springs to mind!
  • More DMP (Debt Management Plan) clients for a debt charity means more fees, when will the press understand this?
  • Everyone is happy to refer people to the debt charities but who is policing these charities? Anyone?

So, here is a final solution for the FCA to consider;

  • Should a personal debt be to an accountant what a legal claim is to a solicitor?

Should we make sure that any debt advice is only given out by a Chartered Accountant? Forget just a Mortgage Advisor as we have seen the damage that can be done in the past but a Chartered Accountant tends to be a different type of individual, usually more focused and committed to the detail. Yes, of course you will find “bent” & “crooked” accountants but not as often as you will find “bent” & “crooked” laymen! A solicitor still needs to underwrite a legal claim in some way regardless of who has introduced the case or work.

Could this act as “food for thought” for the FCA and OFT whilst they are conducting a handover and the industry remains plagued by non conformity!

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  • Finally, why should you be visited in your home by debt advisors?

Do they need to measure you or your carpets? Do they need to know what you look like? Identity checks can be done without face to face meetings and for the last 10 years, the only client that any member of Lewis Alexander staff has ever met is the client that stars on our national TV advert. Do not succumb to high pressure sales tactics in your home with regards to your financial situation as it is harder to say no face to face than it is to someone selling to you over a telephone!

Lewis Alexander is considering a ceremonial public burning and hand back of our Consumer Credit License as we do not see it is worth the paper it is printed on with no industry policing in place!  All press will obviously be informed and invited should we make such a final decision 🙂

The middle years of Queen Victoria’s reign abolished debtors prisons and now it seems to be the bad debt advisors that have re opened them in the UK. By offering bad debt advice, the vulnerable consumer seems imprisoned by a life that may be incorrectly forced upon them and this can be for a great length of time for some involved!

  • Have the OFT “washed their hands” of all “Debt Management Company” compliance monitoring and enforcement whilst waiting to fold their operation once the FCA takes over in April 2014?
  • Will it be a situation of “no case to answer Your Honour” after the OFT ceases to exist and the incorrect restrictions placed on small entities are left to go uncorrected?
  • Is this another good reason to start a small UK business that involves licensable activities? Shame on the authorities or is it a conspiracy?

The calls we enjoy the most are the calls from existing clients that have cleared their debts through Lewis Alexander and are thanking us for the help and support we have offered them!

If you are struggling with personal debt problems and require sound advice and help from a trusted debt consolidation company with over 10 years successful experience of helping others, then call our personal debt helpline today in absolute confidence.

  • Our lines are open 24 hours / 7 days – Call 0800 018 6868.
  • Your call is usually free from a UK landline but mobile call costs may vary.
  • From mobiles you can call 0161 872 3383.

May we take this opportunity to wish all our clients, twitter followers and friends, a very happy, healthy and wealthy 2014!

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Ex OFT Senior Staff Ray Watson to Join DEMSA

On December 16, 2013, in News, by Lewis Alexander

credit report UK from ExperianIt was reported by DEMSA (Debt Managers Standards Association) on 19th September 2013 that Mr Ray Watson will be joining Demsa as non-executive Chairman.

Lewis Alexander Limited was involved with many dealings with the OFT dating approximately between 2007 and 2012; this was also around the time that Mr Watson was head of UK Credit at the Office of Fair Trading.

Lewis Alexander was originally contacted by the OFT around the time that the OFT had launched their 2nd investigation into the Debt Management Industry in approx 2008. The first guidance was set out by the OFT for the debt management industry in 2001. When we were contacted it was with reference to audits required for which we complied with explicitly in a speedy fashion, without question.

Our attitude here at Lewis Alexander was that if the OFT could get a fair playing field for all and disclaimers were being given to vulnerable consumers regarding potential downsides involved by entering into any personal debt consolidation solution, then the industry would possibly get a better reputation than it had enjoyed and the vulnerable consumer would get consistent advice regarding personal debt issues.

Lewis Alexander was subject to some requests by the OFT and we agreed to comply in good faith and to assist their cause.  The problem is that since the OFT placed such requirements some 5 years ago, there are still a number of recognised operations that are failing to comply.  This is not limited to the fee charging sector and a charity is also responsible.  This could be seen as the OFT failing to enforce requests on others due to our competitors having deeper pockets and being able to afford great legal defenses, it may simply be down to ignorance on behalf of some traders.  We at Lewis Alexander then ask ourselves, why would an authority with such power in this land; concentrate its efforts and resources on such a small operator as Lewis Alexander?  Based on the limited reach Lewis Alexander has when compared to its larger competitors, our large charitable and fee charging competition could potentially do more damage financially to vulnerable consumers in one afternoon to what would most probably take Lewis Alexander one year to effect. The use and spend of government resources regarding the personal debt management industry seems to be misplaced and misdirected which in turn could be leading to a waste of tax payer monies.

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Please note that Lewis Alexander believes firmly in what the OFT was set up to do and has taken from dealings with them, many guarantees that the operation is not corrupt or without good and fair intent, however, when it comes to the dealings between Lewis Alexander and the OFT over the last 5 years, questions are starting to be asked.

The problem you have as a business in the UK when dealing with a government authority is that if you wished to take legal action, it would normally be carried out by means of a Judicial Review, these can be very costly and we have been advised a starting cost could be around £50,000.

This is not possible for Lewis Alexander Limited and we do not believe that it will be entirely necessary. The digital age is allowing us to get our message out there and we are getting contact from other debt management operators and financial journalists who have related concerns.

  • Demsa are actually just a trade association set up by founder members of the debt management industry!
  • On 28th September 2010, it was published that the OFT wrote to 129 debt management companies advising that they face losing their consumer credit licenses unless immediate action was taken to comply with its Debt Management Guidance.

Lewis Alexander is proud not to be associated with either of the two debt management industry trade associations; this is based on a number of different factors but originally was due to fees for memberships not being pro rata to individual company turnover levels. We did not see why we should pay the same registration fee if turning over under £200,000 to that of a competitor turning over more than £15 million per annum.

We are now aware that the trade associations may have changed their respective membership fee structures but cannot confirm this. There are other reasons why we have not applied for membership but will omit these from this blog post to avoid any legal or defamatory claims.  The guidance set out by the OFT is good enough for Lewis Alexander and we adhere to it tirelessly.

The new debt management protocol is being dealt with by the Insolvency Service and the selection of auditors for this protocol may be worth Lewis Alexander investigating further! You now have the OFT with their debt management guidance and the Insolvency Service with their protocol, neither of which seem to be effective. Self regulation will not and has not worked; one will always ruin it for another!

In fact, one of the largest (FREE TO CLIENT & NOT FREE!) debt charities had a complaint raised against it for lack of compliance on a national TV advert this year. Is this lack of compliance actually possible for such a bona fide, compliant, long standing consumer facing charity? Or is it blatant disregard for standard compliance? Are they above the compliance? Does the vulnerable consumer deserve as much information as possible from the time at which the marketing call to action provokes their initial enquiry?

Debt Management Company

Paragraph 1.10 of the debt management guidance sets out that ‘the guidance applies to persons who provide debt advice, debt management and/or credit information services. It applies to standard licence holders and applicants (and their employees) providing advice and assistance to consumers on how to deal with their debts and the range of debt management options available to them.  For the avoidance of doubt, this includes all debt management businesses (whether profit-seeking or free-to-client service providers), insolvency practitioners (IPs), approved intermediaries for Debt Relief Orders (DROs), Debt Arrangement Scheme (DAS) approved money advisers mortgage arrears counsellors, independent financial advisers, introducers and other intermediaries, lead generation and claims management businesses, which are engaged in the licensable activities of debt counselling, debt adjusting or the provision of credit information services (including credit repair).‘

The OFT expects all such businesses to adhere fully to the guidance, where applicable

Does the above paragraph mean that a father or mother of an 18+ year old child cannot give them personal debt counselling or adjustment advice as it is a licenseable activity? Or is the parent covered by parental advice laws even though their child is no longer classed by the state technically as a child?

Let’s get back to the title of this post now we have some background, why would Lewis Alexander have such pressure inflicted upon it and furthermore its ability to market reduced massively when there were differences internally at the OFT based on what they felt reasonable to require from Lewis Alexander without internal standardisation to decide such?

Why is an upstanding member of society that was involved in the running of an authoritative UK public body going to work for a particularly unknown private trade association? Could this in turn be perceived as a conflict of interest with his past role and the dealings continuing from matters effected under his reign at the OFT?

What is going on in the good old United Kingdom? Who is doing what at the highest level to make sure that these public offices are acting in line with the law? Who is regulating the regulators?

We have posted this today as we were called by Jenny from DEMSA this morning offering us an invite to their open day in February 2014, we rang DEMSA to explain thanks but no thanks and Angela the “office manager” dealt with us just as she did when we rang 8 weeks ago to ask for Mr Land who has not taken our calls.  She was told by a male in the background to put the phone down after we asked to speak to the new CEO there.

For the record Angela, there are no “sour grapes” just a requirement for your operation to act as it would be expected to! We were not aware that the new DEMSA spokesperson is the Office Manager! When asked for her confirmation in writing that none of her DEMSA members were non-compliant this was objected to!

We also told Angela that we have heard Mr Watson is a lovely man so this is not against him, we are not concerned about personalities we are just bothered about a level compliant playing field for all regardless of the banner they fall under re trade associations.

DEMSA requested the information on their non-compliant members, we advised that if we have this information, it would only be disclosed to the Debt Management Enforcement team at the OFT which is the correct procedure should we find anything so serious to report.

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