Only use professional advisers if in debt

A recent case highlights that people in need of debt advice should ensure they are speaking to professional advisers or could fall prey to imposters who sell their debt on to debt management companies charging hefty repayment amounts.

In the reported case, the wife of a businessman in poor health found that as well as not being able to pay the business bills, her husband was also struggling to pay their mortgage.

She tried to get advice by visiting what she thought was the website of debt charity StepChange, but it was a bogus site and she ended up speaking to someone who claimed to work for the charity but was, in fact, a ‘lead generator’, who sells people’s details to debt management companies.

These copycat sites, which have targeted several debt advice charities, are just one symptom of a broader problem with the aggressive marketing and patchy regulation of insolvency plans which can potentially leave thousands of people worse off.

In most cases, the lead generators attempt to steer people towards a provider of Individual Voluntary Arrangements (IVAs), a form of insolvency that allows people to clear their debt within five years without selling their home.

While IVAs can be a good solution for those with assets and are definitely on the increase, they usually carry high upfront fees and can prove expensive if things go wrong. The number of IVAs failing within the first year has doubled since 2013.

Unfortunately, when people fall into debt, they are often already in a vulnerable state through issues such as ill-health, job loss or bereavement and can become prey to bogus websites so taking advice from a trusted professional adviser is key.

Tim Close, Insolvency Partner at Milsted Langdon, said: “When seeking advice, it’s imperative that you ensure the help you seek is legitimate. With many copycat sites now active, it can be difficult to spot the signs of a fake website, which is why it’s important to seek out a trusted professional adviser.

“For help and advice on matters relating to insolvency, contact our expert team at Milsted Langdon today.”

Posted in News.