Initeresting Mirror Article on DMCs & Fees / referals to the free sector

[Wintry]

Hi

 

I thought this might be interesting and worthy of discussion in the context of this particular forum section as it could be significant when you consider the big picture.

 

Are the fee chargers setting themselves up for a massive own goal? they just might have, if so then the marketing and sales people might have to go full stretch, then of course they may be vulnerable to further goals, but this time from the 'other side'

 

Think it is a voluntary code however and a fickle industry you could argue...maybe

 

http://www.mirror.co.uk/money/personal-finance/debt-management-firms-back-clampdown-agree-2677433

 

Only my opinions!

[Nick Pearson]

Thanks Wintry, hadn't spotted Mirror article. Now I'm no longer working for a fee charging debt management firm ( as of 6th Nov) I can say what I please! The real challenge for debt management firms is not this protocol (most of the 22 firms who are protocol approved haven't yet actually started offering protocol compliant DMPs but are instead offering their usual DMP fee structure eg 2x monthly DI as set up fee) but the FCA regulation from 1st April 2014. Take a look what is proposed by FCA in relation to fees and then add in FCA consultation on fees for 2014/15. The fee for debt management firms is proposed to be £10,000 a year; a set fee regardless of size of firm. Commercial debt manages are bailing out of the market as we speak. Although the FCA draft rules are largely only the OFT DMGs made into FCA rules with some new prudential rules plus a bit of the DMP protocol it's how FCA expect firms to demonstrate compliance that will be a bridge too far for many/most debt managers. As one firm said to me last week, it's clear that the FCA hope to remove the majority of debt managers from the market. If the draft rules and fees are implemented they will succeed. You know what to do!