Moving on…
After exploring the differences and needs for both a free and fee charging sector in the debt management industry in my last blog, this time I wanted to look at the importance of knowing who you are referring your clients to.
All debt solutions companies are required to hold a consumer credit licence, which is issued by the Office of Fair Trading. They are also required to follow the recently updated OFT Debt management guidance.
There are two industry bodies The Debt Resolution Forum and DEMSA. Membership is not a requirement. (Ashley Park is a DRF member) Both bodies aim to promote the highest professional standards within our industry.
Unfortunately our industry has seen a large number of opportunists set up with the intention of making hay while the sun shines. We all know the story, new company offering higher commissions with nothing but hot air to back up what they are promising.
As a financial intermediary the two questions you should be asking when dealing with a debt management company are:
1. Am I confident I am dealing with a reputable company?
2. Am I happy for them to handle my client’s finances long term?
Also, be aware of what fees they are charging to your client, if they are offering you more commission than others, how are they able to do so? If they are offering unsustainable commissions then whilst great for you in the short term, what does this mean for your client in the future if they can not maintain these inflated commercial terms?
If you are confident they are the right company to use after considering these questions then a referral by you could be the difference between your client keeping or losing the family home.
