Financial Ombudsman Service and Debt Management Plan Complaints
Despite continued negative coverage of DMP firms in the media, the number of DMP complaints received by FOS is surprisingly low.
A complaint about a debt management plan would be included in their category of "debt adjusting".
101 debt adjusting complaints have been received in the past three months.
This figure is down compared to the previous quarter, but the overall trend in debt management plan complaints is upwards over the past three years.
Other financial services areas attract much higher complaint levels, for example mortgages (2383) and vehicle insurance (1814).
However, it's clear that many fewer people are using a DMP than have mortgages or insurance for their car or motorbike.
The numbers are therefore not truly comparable.
The responsible part of the DMP industry is taking such matters seriously and has formed two trade associations where members have committed to steps that will drive up standards and reduce complaints.
These include external audit of their businesses and training programs for their staff.
Sadly there remain many cowboys in the UK debt management plan industry so it's likely that complaints will continue to trend upwards in the future.
Anybody that is thinking about starting a DMP, or just taking some debt management plan advice, would do well to restrict their sources of advice to the major free-to-client agencies or private companies which have joined the trade associations (Debt Resolution Forum and DEMSA).
Both associations have member lists on their websites.
The example complaints provided in the FOS newsletter are fascinating.
In the first a gentleman complained that he had expected his debts to be written-off after he signed up for a debt management plan service, something which did not transpire.
FOS looked for evidence that this client had been deceived by the DMP firm but actually found the opposite to be true.
Phone recordings indicated that this promise has not been made and the marketing materials of the DMP firm made no suggestion that such results should be expected.
The complaint was therefore rejected.
The other example concerns a lady who received a cold-call from a debt management plan firm (always a warning sign in itself) that had promised her that her debts would be written-off if she started a DMP with them.
Their promises and marketing were found to be inappropriate and misleading by FOS and the company could not provide evidence to the contrary.
As well as ordering the debt management plan provider to return her fees, FOS ordered them to pay an extra amount in recognition that their complaints handling process was so poor.
If you have received bad DMP advice or services you should, in the first instance, use the complaints process of the DMP firm.
Should they not deal with the matter to your satisfaction you can then take the matter to FOS.
As debt management plans fall within their jurisdiction they have the power to deal with your complaint should they agree with you that you have been treated incorrectly.
A complaint about a debt management plan would be included in their category of "debt adjusting".
101 debt adjusting complaints have been received in the past three months.
This figure is down compared to the previous quarter, but the overall trend in debt management plan complaints is upwards over the past three years.
Other financial services areas attract much higher complaint levels, for example mortgages (2383) and vehicle insurance (1814).
However, it's clear that many fewer people are using a DMP than have mortgages or insurance for their car or motorbike.
The numbers are therefore not truly comparable.
The responsible part of the DMP industry is taking such matters seriously and has formed two trade associations where members have committed to steps that will drive up standards and reduce complaints.
These include external audit of their businesses and training programs for their staff.
Sadly there remain many cowboys in the UK debt management plan industry so it's likely that complaints will continue to trend upwards in the future.
Anybody that is thinking about starting a DMP, or just taking some debt management plan advice, would do well to restrict their sources of advice to the major free-to-client agencies or private companies which have joined the trade associations (Debt Resolution Forum and DEMSA).
Both associations have member lists on their websites.
The example complaints provided in the FOS newsletter are fascinating.
In the first a gentleman complained that he had expected his debts to be written-off after he signed up for a debt management plan service, something which did not transpire.
FOS looked for evidence that this client had been deceived by the DMP firm but actually found the opposite to be true.
Phone recordings indicated that this promise has not been made and the marketing materials of the DMP firm made no suggestion that such results should be expected.
The complaint was therefore rejected.
The other example concerns a lady who received a cold-call from a debt management plan firm (always a warning sign in itself) that had promised her that her debts would be written-off if she started a DMP with them.
Their promises and marketing were found to be inappropriate and misleading by FOS and the company could not provide evidence to the contrary.
As well as ordering the debt management plan provider to return her fees, FOS ordered them to pay an extra amount in recognition that their complaints handling process was so poor.
If you have received bad DMP advice or services you should, in the first instance, use the complaints process of the DMP firm.
Should they not deal with the matter to your satisfaction you can then take the matter to FOS.
As debt management plans fall within their jurisdiction they have the power to deal with your complaint should they agree with you that you have been treated incorrectly.
Source...