Let’s be clear about this. Not all debt management companies are in the business of ripping their customers off but a vast amount of them are.
Surely the point of a debt management company is to do exactly that – manage your debt situation. This should mean that they charge minimum fees or no fees at all, after all, most of the people they are helping are people who have got themselves into an unfortunate situation that requires a debt management solution. This would also mean that the people in this situation are the type who have no spare disposable income and money (or rather saving money) becomes the No.1 objective.
Why is then that certain companies are charging clients up to 5% of the loan or remortgage, just for consolidating their debts? It is absolutely staggering and something should be done about it, whether by Government legislation or by the financial services industry regulating themselves properly for a change. It is all well and good, saying that it doesn’t make a lot of difference to the client as the charge is added onto their final loan amount but in my eyes this is still tantamount to daylight robbery.
Surely this situation is one where the clients are desperate for good solid financial advice and not be at the mercy of mortgage brokers and debt management companies who care only for their commission and not for the clients well being.
The message is to choose your debt management company very carefully and check out the facts:
Maximum charge of .5% added on to the loan