Companies claiming they wish to help preying on people
London, UK -- (SBWIRE) -- 11/14/2012 -- Recent research has found that many people who face debt are losing even more money when trying to set up debt payment plans. The study was done by the Center for Research in Social Policy at Loughborough University.
There a lot of free ways to set up a debt payment plan, but there are also expensive ways, and many people are being duped by companies that claim to want to help them, but actually end up putting them into more debt.
Research done by the Money Advice Trust and Lloyds Banking Group found that outfits that “help” people get out of debt have been found to be doing just the opposite.
Nearly half of the total number of clients in the study said they did not realize they could be getting help with debt payment plans for free. Instead, people were paying these outfits to help them organize their money and set up a plan to pay it back.
Unfortunately, clients had already been forced to pay upfront fees and rates for the services of these companies. For most people in debt, paying more fees is not going to help them get back to even. These people are being taken advantage of as companies use fees to help themselves rather than helping people who truly need it.
One client even admitted that he was paying 400 Euros into a debt management plan a month, 300 of which was going to the company helping him. In effect, he was putting 400 in and only getting credit for 100.
Two clients also said they had paid 600 Euros up front just to set up a payment plan.
It is clear that most people do not realize that debt payment plans can be set up for free, and that these companies that are charging them fees are completely out of line, and have been reduced to scams.
The Government plans to increase awareness for consumers who may be taken advantage of; however, it will not stop companies from seeking out uninformed people to try to get money out of. The study showed that people who end up paying for help are often ones with the most need who have made on the spot decisions with little to no thought.
It was recently reported that the Office of Fair Trading will be given permission to stop these rogue companies who have been scamming folks for years. Unfortunately, it will be hard to seek out every company involved in such scams, but the Government says it needs to do something to discourage the wrongdoings and inform the public.
DebtManagementPlans.uk.com (http://debtmanagingplanninguk.com) helps those in debt create a plan for the future. With a free debt assessment, Debt Managing Planning UK will help people manage their money in a safe and organized way, and get them out of trouble.
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