My friend up until 2 years ago was in a Debt MAnagement Agreement and had handed over a set amount each monthfor them to pay his debts. They suddenly stopped the standing order and when he quieried this they said they were no longer dealing with the issue and to wait for his creditors to contact him, as they had been informed of the fact that they were no longer acting on his behalf.
He has only just heard back from one of his creditors (the AA - it was aloan) and been informed that there is still £3,000 outstanding on the debt and they are now demanding payment.
I have an idea as to what he can do, but would like to hear some advice from you guys.
not sure, but I don't find it unusual, as I have heard this a couple of times now from friends in similar situations.
One company took loads of fees and paid very little to the actual creditors and then stopped paying the crditors at all. they got loads of letters still from their creditors stating that they have received no payments.
Sorry i have no helpfull advice for you, im hoping one of the experts will be along soon with some as im curious to know what they will say. How can a company do this and still be advertising their services? (ive just googled them)
he was with them from 2008 to 2010 making substantial payments. then in 2010 was told that the standing order had been stopped (not by him) and that the creditor would be in touch for any outstanding monies. it's taken the creditor 2 years to contact him.
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I do not think a standing order cannot be stopped by the recipient so it must have been a direct debit that was in place. Regardless, it seems odd but I think this crowd was part of Accuma and perhaps they stopped debt management when they sold the IVA book.
Your friend should try elsewhere for advice and perhaps get copies of their credit files just to see what has been recorded there.
This does seem very odd - Michael is right that the DM company could not cancel the standing order. So far as I am aware this company is still trading, so your friend should ask them for a full account of the monies he/she paid over and what was actually paid to creditors, together with the notice of disinstruction they say was provided to them.
Thanks guys. He owes £3000 and is in a position to be able to pay £50 per month, possibly occasionally more if he gets enough overtime.
Taking aside the issue of the DM obviously going wrong at some point (not sure about the ins and outs but he is ademant that they stopped payments, not the other way round)... surely the AA should have been in contact with him sooner. It just seems like they have piled on charges purely for the sake of it.
He has moved, but he lived at his father's address, and his father (who still lives at the previous address) has confirmed that any mail received has been forwarded to him.
I'm wondering if it's worth arguing that they should have contacted him sooner and not loaded charges on top.
AA loans are usually front loaded with interest so there may not have been any further interest or charges added. If this is his only debt he should speak to the bank and make an arrangement that he can afford with the option of paying a bit extra when he can.
And creditors are not that smart at chasing up defaulting customers once a DMP has failed, so it doesn't suprise me that he is in this position now. Best thing to do would be to get the debt paid off as quickly as he can. Were there any other debts left behind in the DMP that he is aware of?
