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Biased Debt Advice From The CCCS?
The Consumer Credit Counselling service uses its charity status to boost its claim to be champion of the struggling debtor, but is the advice it gives always the best advice?
The CCCS is a registered charity and is financed by donations. However, most charities I’m aware of exist to help the cause of those in need without any other agenda. The CCCS is financed by the credit industry.
Therefore, is it possible to get fair advice on dealing with a debt crisis when the advice is coming from people paid by the companies with whom you have that debt?
The suggestion in a recent (Jan 2008) article in the Mail on Sunday is that advice given tends to be biased towards maximising recovery of borrowed money by those who finance the CCCS.
“Financial Mail has learned that CCCS might not be as independent as it boasts and could be obtaining revenue from possibly ‘ inappropriate’ advice given to debt-ridden clients”
The claim is that too many debtors are advised to enter a debt management plan, rather than an IVA or bankruptcy. Debt Management may be in the best interests of the CCCS’s backers, as they get back the full amount owed. However with an IVA or in Bankruptcy, creditors see less of their money, but these options may be most appropriate for that particular debtor.
I put this to the test. The CCCS has a technically great online tool which takes a full financial statement from the debtor and produces a report explaining a course of action to resolve your debt problems.
See CCCS Debt Remedy Tool
I presented myself of having debts of £54,000. A disposable income of £403 per month and about £15,000 of equity in my property.
This is acceptance criteria for an IVA. £24,000 would be paid back over 5 years and creditors would also see some more of their money returned from a remortgage. I would have been debt free in 5 years, with slightly raised mortgage payments.
CCCS advice - Debt management for over 11 years paying back the full £54,000.
You decide if this is the “best advice”.
One Response to “Biased Debt Advice From The CCCS?”
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January 24th, 2008 at 2:27 pm
If you susbscribe to the theory that “you get nothing for nothing in this life” and if you also accept that “he who pays the piper calls the tune” then you will answer your own questions regarding this article.
For an independent unbiased look at your finances, then feel free to call me directly on 0161 905 8813.