Glasgow builder given record loan ban after breaching bankruptcy terms

A builder from Glasgow has been banned from applying for loans or acting as a company director for seven years after he broke the terms of his bankruptcy agreement.

John Henry, 45, was brought before Stirling Sheriff Court accused of continuing to trade despite being declared bankrupt. A major investigation was launched into Mr Henry and his construction business by Accountant in Bankruptcy (AiB), which is the insolvency agency for the Scottish Government, and a number of fraudulent activities were revealed.

Mr Henry was found to have used a variety of methods and a number of different company names to keep his business going, even though he himself had been declared bankrupt in 2009 due to his inability to tackle his debt problems. He was also found to have neglected his tax obligations for his employees, as well as failing to keep accurate business records.

A spokesperson for the AiB said:

“Mr Henry was declared bankrupt in 2009. However, he continued to trade when he knew or ought to have known that he was unable to pay his debts, incurring over £100,000 of additional credit over a four-month period.

“Mr Henry had continued trading in the construction industry across the west of Scotland while using a variety of different company names. As a result of his misconduct many businesses, organisations and consumers may have suffered financial hardship.”

As part of an unprecedented Bankruptcy Restriction Order, the court told Mr Henry that he could not head up a company nor apply for a loan for at least seven years.

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Posted in: after,Bankruptcy,breaching,builder,given,Glasgow,record,terms

Is The Citizens Advice Bureau Worth Your Time?

When looking for debt advice UK wide, one of the sources often cited is the Citizens Advice Bureau.  The stated mission of this particular charity is to provide sound advice to consumers regarding issues that are pressing on their minds.  Foremost among the advice offered by the Citizens Advice Bureau is debt consolidation, as well as advice on bankruptcy and other options open to consumers who find themselves in dire financial circumstances.  While there are many supporters of the bureau, there are also detractors who raise valid questions about whether consumers benefit from utilising the resources it provides or if their interests would be better served by seeking debt consolidation advice, along with other forms of financial information, from a different source.

The Citizens Advice Bureau relies heavily on the assistance of volunteers to manage the requests for information and help that are received each day.  Often, the volunteers are professional debt advisors who offer some of their time each month to help people who are in need.  At other times, the volunteers are less informed and up to date on issues such as bankruptcy law, changes in the qualifications for an IVA or even on what is happening in terms of laws that impact the function of debt management and consolidation options.

The citizen’s debt advice that is obtained from the CAB should be double-checked with other sources.  This makes it easier to identify any information that may be outmoded or is incomplete in some manner.  Doing so will typically accomplish one of two things.  First, the double check may confirm that the information obtained from the debt advisor via the CAB is in fact up to date and complete.  When this is the case, the consumer can move forward with confidence and make informed decisions on how to proceed.

At other times, the double check may reveal that the citizen’s debt advice obtained through the CAB was not as complete or as accurate as the consumer first thought.  When this is the case, verifying the data with other sources makes it possible to fill in the blanks, update the information and avoid making what could have turned out to be a rash and ultimately damaging financial move.  From this perspective, taking the time to verify data from more than one source makes it possible to reach a responsible decision regarding which strategy to use in settling debt and getting back on an even financial plain with as little difficulty as possible.

While many see the Citizens Advice Bureau as the best way to get advice on dealing with debt, it should be viewed as only one resource among many and not necessarily always the best source.  Take the time to obtain information on debt management and settlement from more than one source and your chances of making the right decision and getting out of debt in the timeliest manner will be greatly enhanced.

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Posted in: advice,Bureau,Citizens,Worth

Football legend's £2m debt write-off sparks fury

Former Scotland and Blackburn Rovers captain Colin Hendry has been discharged from his bankruptcy and will only have to pay back £36,000 of a £2.1 million debt.

Hendry, who also played for Glasgow Rangers, turned to drink and gambling after the death of his wife Denise and was declared insolvent in June of last year.

Creditors were contacted by Hendry’s solicitor in writing to inform them that the retired star would be paying back £1000 pounds a month for the next three years – less than 2 percent of the original debt.

One of the creditors, Hector McFarlane, is a former friend of Hendry and claims that the ex-player borrowed £95,000 from McFarlane and his wife in the knowledge that his debts were going to force him into bankruptcy.

Mr McFarlane was incredulous when he spoke to the Daily Record: "I am just flabbergasted. I stand to get back £1800 of the money I loaned him. It's an absolute disgrace."

McFarlane also claimed that Hendry, who is a football pundit for ESPN, was still able to live comfortably, despite the repayments he has to make: "His lifestyle has hardly changed," he said.

"He lives one of the best lifestyles of people I know. I gather he gets more than £1000 a game as a TV pundit.

“My wife and I have not received one penny of the £95,000 he owed us, while he can get on with his life.”

The largest of Hendry’s creditors was HMRC, owing them £1.3 million, but he also owed £65,000 to his late father's estate, £35,000 to his brother and £10,000 to Denise's parents.

The case for his bankruptcy was brought forward by the spread betting firm Spreadex.

Hendry’s luxury home in Lytham, Lancashire was sold but it was reported that the sale was only enough to pay off mortgages and secured loans on the property.

Denise died in 2009 and Hendry admitted to falling into a destructive cycle of gambling and alcohol abuse because of his grief to the Daily Record: "I did drink quite a lot initially. And I gambled - not as badly as has been reported.

"I'm not a bad guy. I've made mistakes in my life, like most people have."

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Posted in: football,legends,sparks,writeoff

In Profile: Dave Collier of CA Tax Solutions

We spoke with Dave Collier, Director of CA Tax Solutions, to found out a bit about how they help individuals and small businesses make savings on their tax bills....

1) Firstly, what exactly does CA Tax Solutions do?

We help owners of commercial property – from offices and warehouses to medical centres and furnished holiday lets – recover the unclaimed capital allowances that exist within their properties. If you’ve not come across them before, capital allowances are a valuable form of tax relief available to anyone incurring capital expenditure buying, building or making adjustments to commercial property. The problem, historically, has been that identifying capital allowances within commercial properties is extremely complex and a very specialist area, so much so that even accountants only scratch the surface. Therefore few commercial property owners have been properly alerted to it and have had the tax rebates they are due. Indeed, while your client’s accountant will claim on more obvious items such as shutters and curtains, fire extinguishers, floor tiles or carpet, generally speaking they will not drill down to the items where the far more significant costs to a business lie. These might include air conditioning or heating systems, (emergency) lighting and security systems, plant and machinery items. Also, we estimate that a massive 90% of commercial property owners will have the right to some level of claim, which can range from a few thousand pounds to several million.

2) How long have you worked for CA Tax Solutions and what did you do before?

I’ve worked at CA Tax Solutions for three years now. Prior to that, I worked as a property developer and a mortgage broker.

3) What do you predict happening in the debt management sector over the next 12 months?

We’re certainly not through the current economic downturn yet — and it could be some years before we are. The first wave of insolvencies, personal and corporate, are now behind us but many companies and individuals are still struggling and further waves are likely. Therefore, the sector looks set to continue to grow in at least the short term.

4) How many companies don’t understand that they can claim capital allowance?

The vast, vast majority of companies out there have no idea that they can make a claim. Most don’t even know what capital allowances are.

5) How can this help companies cut their overall expenditure?

Capital allowances rebates don’t help firms cut their expenditure as such but what they can do is provide a significant capital injection at a time when many companies, struggling in the current economic climate, need it most.

6) How straightforward is the procedure?

It’s straightforward enough for the client but can be quite technical for us — but then technical is our expertise. Basically, we start by establishing the capital allowance history of the property. The main thing, at outset, is to ensure the client will benefit from the exercise and that we are aware of all the details of any prior claims made by the accountant. If we feel that unclaimed capital allowances exist then we will carry out an in-depth forensic survey of the entire site. We are essentially identifying items that fall within the definitions of Plant and Machinery as laid down in the Capital Allowances Act 2001 and will therefore qualify for capital allowances. Using cost models and data sources accepted by HMRC, we produce a report detailing the grounding for us making a capital allowances claim on items within the property along with a breakdown of the claim amount. We then send the report and guidance to the client and accountant on how to submit the claim to HMRC. The result is almost always positive.

7) Do you charge fees?

Yes, we charge clients a survey fee and a report fee of 7% plus VAT of the total allowances identified — but only if they amount to £50,000 or more. If the client is a limited company then the fee chargeable comes down to 5% plus VAT. It’s also worth stating that we only charge the client a fee if we uncover capital allowances totalling more than £50,000, so there is no financial outlay for them at all.

8) Do you offer brokers commission?

We most certainly do. The introduction fee payable will naturally vary according to case and volume but we pay from 15% of our fee.
9) How do brokers benefit from telling their clients about your company?

Brokers benefit by making some serious money for doing very little indeed. And if a referral results in a client making a sizeable rebate, that alone is invaluable from a client relations perspective. The strength of this proposition is that nine out of ten owners of commercial property will be due a rebate of some kind, so rarely will the effort made by the broker go unrewarded.

10)  Can the service be used in conjunction with debt management?

It certainly can. A lot of struggling companies and individuals who own commercial property will be sitting on unclaimed capital allowances that could make a real difference to their financial position.

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Posted in: Collier,Profile,Solutions

The A4e blog: Isn't it time we did something about high cost lending

Last week the House of Commons rejected the idea of an amendment to the Finance Bill. This would have included with the Bill a review of high cost lending. This is a very real problem. In my view, one of the reasons the political debate often fails to make progress on debt issues and access to affordable and appropriate financial products for low income consumers is that the challenging issues are treated in isolation.... read more. 

Apprentice star's secret debts revealed
Wednesday 13th July 2011

Threatening debt management company loses licence
Tuesday 5th July 2011

Men Behaving Badly star in £1m IVA
Wednesday 22nd June 2011

Repossession hotspots revealed
Wednesday 22nd June 2011

FSA breakthrough in the fight against boiler room fraud
Wednesday 15th June 2011

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Brits become slaves to their energy bills

The number of UK families falling in to fuel poverty is rising rapidly according to the Department of Energy and Climate Change.

The worrying figures from their ‘Annual Report on Fuel Poverty Statistics 2011’ come alongside a statement from British Gas saying their fuel prices will increase come 18th August this year. Just eight months after prices were upped 7 per cent, the price of electricity will be raised by 16 per cent and gas by 18 per cent. This rise equates to an extra £200 pounds a year on their fuel bills.

These are alarming numbers for householders and are not made easier by the above report claiming that the number of families that fell into fuel poverty had risen from 4.5 million in 2008 to 5.5 million in 2009. The majority of these were in England, where the number rose from 3.3 million to 4 million in that year.

Matt McKenning, Operations Director of MoneySave, said: “Household finances are already being stretched and the upward trend in those falling into fuel poverty is very worrying.  With the recent news of further price increases in gas and electricity the number of people having to make the choice between being warm or being fed looks set to rise even further.

 “Consumers should be aware that fuel suppliers must give 30 day’s notice prior to any change in prices.  This allows householders the opportunity to shop around for the most competitive tariff.”

Kevin Still, Director of Atlantic Financial Management added: “Rising costs of living, notably fuel, energy and insurance premiums, are having a significant impact in reducing household disposable income and in many instances creating serious debt problems. One of our initial priorities as a debt adviser after undertaking a review of your financial circumstances is to prioritise payments, so that the essential ones are made to protect your house and key assets, like a car used for work.”    

A household is classed as living in fuel poverty when they spend 10 per cent of income on fuel to keep the household at an adequate level of warmth. Adequate warmth is defined as 21 degrees for a main living room and 18 degrees for other rooms that are occupied.

Apprentice star's secret debts revealed
Wednesday 13th July 2011

Threatening debt management company loses licence
Tuesday 5th July 2011

Men Behaving Badly star in £1m IVA
Wednesday 22nd June 2011

Repossession hotspots revealed
Wednesday 22nd June 2011

FSA breakthrough in the fight against boiler room fraud
Wednesday 15th June 2011

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Posted in: become,bills,Brits,energy,slaves,their

OFT's latest intervention saves landlords millions

Commercial landlords have saved millions due to the OFT’s High Court order against Foxtons.

The OFT secured an enforcement order in February 2010 after they deemed Foxtons had breached the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs).

The High Court ordered that Foxtons' renewal commission terms were not transparent.

In an evaluation recently published by the OFT it states that Foxtons then amended some of its terms resulting in an estimated £4.4 million benefit to commercial landlords.

In the report the OFT deems its intervention a success and is now warning the lettings agent sector to check their terms and conditions are fair and transparent.

They are aiming to raise more awareness about the evaluation of the Foxtons case as they found some consumer landlords and letting agents remain unaware of the High Court ruling and its implications for the sector, with similar potentially unfair terms still appearing in some contracts.

Amelia Fletcher, OFT Chief Economist, said: “This research clearly demonstrates that there has been an immediate financial benefit for consumers from our intervention, and also evidence of knock on benefits from making this market more competitive.

“However, there is evidence of continuing poor practice by some letting agents, which need to go further to make their contracts transparent and fair.”

In order to highlight this to the industry OFT has sent out letters to letting agents and their industry associations.  They have also invited a number of agents to an event this autumn that will focus on the need for transparency of terms in contracts, including the need to highlight terms which relate to charges.

The High Court Order made to Foxtons declared terms which required landlords to pay commission to Foxtons after the sale of their property to a third party, because the original tenant remains in occupation, and terms which require landlords to pay a sales commission to Foxtons in the event they sell the property to their tenant, were unfair, not binding, and may not be used or relied upon in contracts with consumer landlords.

The evaluation was conducted in house by the OFT's evaluation team as part of the OFT's commitment to evaluate the impact of its work for external accountability and internal management purposes.
 

Apprentice star's secret debts revealed
Wednesday 13th July 2011

Threatening debt management company loses licence
Tuesday 5th July 2011

Men Behaving Badly star in £1m IVA
Wednesday 22nd June 2011

Repossession hotspots revealed
Wednesday 22nd June 2011

FSA breakthrough in the fight against boiler room fraud
Wednesday 15th June 2011

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Posted in: intervention,landlords,latest,millions,saves

Jobless figures mask reality of households struggling on reduced incomes

The latest job market figures have revealed a startling rise in the number of families struggling on reduced incomes because they can’t find full-time work.  

The figures follow a recent report suggesting that increasing numbers of workers are being forced to take pay cuts or ‘downbanding’ of their jobs or face redundancy.With loss of income the top reason why people enter Debt Management Plans (DMPs), debt solutions specialist and DEMSA member Atlantic Financial Management is warning that while the headline jobless figures look positive, the underlying picture is much more worrying for families across the UK.The ONS figures have revealed that the number of employees and self-employed people working part-time because they could not find a full-time job increased by 80,000 in the three months to May 2011, on the previous quarter to reach 1.25 million, the highest figure since comparable records began in 1992. This rise is also echoed in the number of people claiming Jobseeker’s Allowance (JSA) which has risen by 24,500 in June – the highest increase in two years. Redundancies have also risen by 16,000 over the quarter. Kevin Still, Director for Atlantic, said: “While the overall figures show a reduction in unemployment, when you dig below the surface there’s clearly a growing number of people tackling a loss of income either because they can’t find full time work, or because they have had an enforced pay cut or have been ‘downbanded’. “When you look at this combined with the rising costs of day to day living – utility bills, food costs and fuel for example – the challenge of balancing reduced income against rising outgoings is becoming a real issue for many UK households.” He explained that people often turn to their credit cards in order to manage the rise in costs, which can often lead to a debt spiral. “It’s at this point that household need to start prioritising debts and a Debt Management Plan (DMP) from a DEMSA accredited debt solutions provider such as Atlantic can prove invaluable in this regard.“A new schedule of payments can often be negotiated with all the creditors and will ensure rent, mortgage, energy, critical insurances and council tax bills get paid before other unsecured debts,” he added.  "Atlantic Financial Management offers a range of debt solutions including Debt Management Plans (DMPs), IVAs, Protected Trust Deeds and Bankruptcy advice and its expert legal support team prioritises dealing with any court actions an individual or household may be facing. "It also offers a number of money saving tools including energy switching and a prepaid current account," Mr Still said.He explained the process individuals can go through in order to find the best debt advice for their circumstances. "Debt Advisors will confidentially discuss an individual’s financial circumstances over the phone and provide initial debt advice without obligation. Once they know more about the current financial situation, the best debt solution for their circumstances will be recommended."If a Debt Management Plan is chosen, Atlantic will then complete a statement-of-affairs, from which it can work out which payments are prioritised and which can be negotiated. Priority debts, such as mortgage, secured loans, rent, council tax, priority insurances and utility bills must be paid first and Atlantic makes allowances for these in the client’s monthly budget and statement of affairs."Mr Still revealed that Atlantic’s business model is based upon very early contact with a client’s creditors to advise them of their appointment and to commence the debt repayment negotiation process at the earliest point possible. Atlantic is licensed to use the Common Financial Statement, which is widely accepted by creditors and their collecting agents. "Part of the Atlantic model is to look at benefit entitlements and ways of optimising income,"  he concluded.     
Apprentice star's secret debts revealed
Wednesday 13th July 2011

Threatening debt management company loses licence
Tuesday 5th July 2011

Men Behaving Badly star in £1m IVA
Wednesday 22nd June 2011

Repossession hotspots revealed
Wednesday 22nd June 2011

FSA breakthrough in the fight against boiler room fraud
Wednesday 15th June 2011

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Posted in: figures,households,incomes,Jobless,reality,reduced,struggling

3.2 million households in the UK are in debt

More than three million households across Britain are suffering financial difficulty while another three million are financially vulnerable.

Research, conducted by debt charity the Consumer Credit Counselling Service, reveals that 3.2 million households are either in debt action such as insolvency or are three months or more behind with debt repayments.This figure may be set to rise, however, as the proposed increase to electricity and gas prices will potentially affect the three million financially vulnerable households. Electricity prices will go up by 14.5 per cent, whilst gas will increase by 19.7 per cent.Any increase in monthly outgoings for these financially stretched homes, which are only just managing to meet existing repayments, would result in them also being categorised as being in financial difficulty.The chairman of the CCCS, Lord Stevenson, said: “These figures confirm our fears – that troubled times lie ahead for many people in the UK. This report shows the pain is going to spread wider and affect many more people than many commentators have previously assumed.”The CCCS’s report on debt and household incomes shows the difficult financial situation faced by around one tenth of the UK population, and includes more than a million people struggling to pay their mortgage.More than one third of the CCCS’s clients earning £13,500 to £25,000, and a quarter of clients earning £25,000 to £50,000, have no surplus money to repay unsecured loans and debts, the report revealed.Clients earning less than £13,500 per year were likely to have unsecured debts worth more than 20 per cent more than their yearly income. Clients who earned between £25,000 and £50,000 per annum had average debts worth 95 per cent of their annual income, whilst those who received benefits had the greatest levels of unsecured debts, worth 124 per cent of their yearly income.“CCCS was contacted by almost 418,000 people last year, and our data reveals the stark realities faced by many decent, ordinary people who struggle to make ends meet in these difficult economic times. “It is important that the complexities of their vulnerability are understood and addressed by government as well as the financial and charitable sectors,” Lord Stevenson continued.
Apprentice star's secret debts revealed
Wednesday 13th July 2011

Threatening debt management company loses licence
Tuesday 5th July 2011

Men Behaving Badly star in £1m IVA
Wednesday 22nd June 2011

Repossession hotspots revealed
Wednesday 22nd June 2011

FSA breakthrough in the fight against boiler room fraud
Wednesday 15th June 2011

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Experts slap £11.5bn price tag on contaminated land

UK homeowners could be hit with a bill of £11.5 billion for cleaning up contaminated land.

A survey conducted by property search provider and conveyancing experts SearchFlow, revealed figures showing that 3% of all properties in the UK are affected by land contamination. Many of these homeowners may not even have caused the contamination but will still be held liable for the cleaning under the Environmental Protection Act 1990.

The act states that responsibility for cleaning up any contaminated land falls to those who have caused it but the peril lies where this cannot be determined by a local authority – the person who currently owns or occupies the land is then liable for the cleanup.

The average cost of cleaning contaminated land is about £250,000 per acre and, given that an 768,000 of 25.6 million separate dwellings in the UK could be affected, the average clean up per residential plot would come to about £15,000.

David Kempster, director of SearchFlow said: “For those affected, land contamination is a financial hand grenade, which is often not picked up by conveyancers. Many homebuyers – especially those making their first purchases – have limited equitiy in their properties and so cannot borrow to cover the cost of cleanup work. Being hit with £15,000 of additional costs for a new house could be financially catastrophic and for those with plots larger than the UK average of 243 square metres, the expense could become even more unmanageable.”

However, it may not be so bad for some as  a ‘suitable for use’ approach is currently being taken by the government and local authorities will only force the current occupier to clean up contamination if the risk posed is considered to be ‘unacceptable’.

Mr Kempster also gave reasons as to why contaminated land could pose such a large risk to homeowners: “As green belt land has been fiercely protected by local authorities in the last 50 years, a large proportion of UK homes have been built on brownfield sites, which often contain multiple types of contaminant. This means the number of residential occupiers potentially at risk of major liabilities for land contamination is growing rapidly.

In many cases, the contamination dates back many years and identifying past owners and proving that they caused the contamination could be very difficult indeed. In these situations, buyers of large plots could find themselves facing huge costs.”

Residential property owners can protect themselves to a certain extent as there are a number of options available when dealing with land contamination. There are insurance policies that will pay out if any historical contamination is found on the site and are passed down through the home owners. However, their value is fixed, not related to the value of the property and will not protect homeowners from any health consequences arising from any unidentified property blight.

David Kempster comments: “Contaminants in land can potentially have a harmful effect on the health of the people living on it, as well as expensive costs of decontamination. If contaminants leech out into neighbouring land, owners could find they are liable for the cost of cleaning up that contamination too. As far as buyers are concerned, it’s far better to avoid the problem of land contamination altogether than to face its discovery down the line. Making sure your conveyancer looks carefully into the possibility of contamination will pay large dividends in the long run. ”

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Posted in: 115bn,contaminated,Experts,price

Millions facing financial difficulties

A recent charity report that has been released has suggested that millions of households across the UK are in financial difficulties due to debts, rising living costs, and wage freezes or cuts whilst millions more are in danger of falling into similar financial problems. The report comes from the Consumer Credit Counselling Service and paints a bleak picture of the state of millions of household finances.

According to the report more than three million households are now facing financial problems across the UK. Moreover a further one third are facing financial difficulties and are described as ‘financially vulnerable’ by the Consumer Credit Counselling Service.

The report shows that more than one million people are now struggling to repay their mortgage, and over 3 million are at least three months behind with a debt repayment or are facing action such as insolvency. A further three million are now struggling to make ends meet and could fall behind with repayments if there are any further rises in living costs or any cuts to their household income. Many people are said to be left with little to no disposable income once their essential costs such as mortgage or rent, bills, food, and car running costs have come out of their salaries and some do not even have enough to meet all of these essential payments any longer.

One debt industry official said: “With the recent increases in the cost of living and static or reducing family incomes it is not surprising that more and more people are suffering with financial difficulties. I expect this figure to continue to rise as more and more government cuts start to kick in and the unemployment rate starts to rise”

Tags: essential payments, United Kingdom, car running costs, insolvency, report, bills food

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Posted in: difficulties,facing,financial,millions

Is bankruptcy still affordable for Britons?

After the cost of bankruptcy fees rose by 17 per cent this year, Brits have been left wondering whether filing for bankruptcy is still an affordable option.

The hike in deposit fees means that individuals or creditors must produce a substantially larger sum of money in order to secure a court order, and comes as a further reminder of the nation’s continuing debt troubles. Insolvency expert Melanie Giles explained: “Bankruptcy is becoming an option that is no longer there for those who may need it the most. “Individuals, who may be in debt through no fault of their own, perhaps through divorce, loss of employment or illness, may be being denied bankruptcy because they simply can't afford the application and Court costs.”The deposit that must be paid in order for an individual to be declared bankrupt has risen sharply from £450 to £525. In cases where a creditor is petitioning for the bankruptcy of an individual owing them money, the cost has also risen by 17 per cent, from £600 to £700.The costs would need to be paid to an official receiver, who is a civil servant in the Insolvency Service and an officer of the court. The deposit, a down-payment on management fees payable once a court order is obtained, is paid to an official receiver before they receive the rest of the actual management fees for handling the bankruptcy. Personal debt expert James Falla told Beat My Debt: "If you are already struggling to pay your bills, then trying to get together the £700 required by the bankruptcy court can be a real problem."Rumours have been circulating about the basis for the rise in deposit prices. Melanie Giles suggests that the reason is due to the government’s deficit reducing drive. “The main reason that the cost of declaring bankruptcy has gone up is because the Insolvency Service needs to bolster its own finances as a result of government public sector cuts,” she explained. There have also been suggestions that another reason for the deposit rise is due to the fact that official receivers have found it increasingly difficult in recent months to collect fees owed for handling bankruptcies. Whilst those with assets have traditionally been more secure, the sliding value of assets caused by the uncertain economy has resulted in increasing bad debts. The increase in deposit fees being charged has given rise to valuable questions about how to ensure that bankruptcy remains a viable option for individuals. Perhaps, ultimately, what the industry needs is a government initiative designed to help provide funding for those without the means to pay.
Apprentice star's secret debts revealed
Wednesday 13th July 2011

Threatening debt management company loses licence
Tuesday 5th July 2011

Men Behaving Badly star in £1m IVA
Wednesday 22nd June 2011

Repossession hotspots revealed
Wednesday 22nd June 2011

FSA breakthrough in the fight against boiler room fraud
Wednesday 15th June 2011

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Posted in: affordable,Bankruptcy,Britons,still

'Wannabe' football tycoon is bankrupt

The man who used the services of a convicted criminal in an attempt to take over Sheffield Wednesday has been bankrupt.

Geoff Sheard’s bid for the club was fortified using the services of a convicted money launderer. Mr Sheard used a fake letter from an offshore Caribbean bank in his bid for Sheffield Wednesday, and is also suspected to have fronted a bid to take over Newcastle United.

In 2008, after it was revealed by the Yorkshire Post that a bank letter sent to Sheffield Wednesday claiming that Mr Sheard had 100 million euros available for investment was fraudulent – it had in fact been produced by criminal financier Richard Frank Downes, Sheard’s involvement with the club bid came to an abrupt halt.The Dominican Republic bank which was said to hold the funds for the Sheffield Wednesday takeover was not in fact operational.Not long after this incident, it was uncovered that Mr Sheard had also been taken to court over a string of personal debts. A series of county court judgements included a number of charges on Mr Sheard’s former home near Lancaster. It is understood that the residence has since been repossessed, The Yorkshire Post reports. It was in fact after these revelations that Mr Sheard was reported as having been the front man in a failed bid to take over Newcastle United. It has now been revealed that Mr Sheard filed a bankruptcy application in Application. The order was then made at Lancaster County Court. It is not known how many creditors were affected by the bankruptcy, but it is expected that Mr Sheard’s debts run into several hundreds of thousands of pounds. The bankruptcy is due to be discharged 12 months after the date of the original order, pending the outcome of inquiries by the Insolvency Service.
Apprentice star's secret debts revealed
Wednesday 13th July 2011

Threatening debt management company loses licence
Tuesday 5th July 2011

Men Behaving Badly star in £1m IVA
Wednesday 22nd June 2011

Repossession hotspots revealed
Wednesday 22nd June 2011

FSA breakthrough in the fight against boiler room fraud
Wednesday 15th June 2011

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Apprentice star's secret debts revealed

Wednesday 13th July 2011

Whilst an Apprentice hopeful steps up his on screen performance, his real companies are falling into mounting debt.
31-year-old Tom Pellerau’s company ‘M&P Consulting’ turned over just £500 last year and has a net worth of minus £15,597, whilst his second company ‘Foxfile Ltd’ has a net worth of minus £6,721, meaning that it owes more than its assets.

It seems that winning the Apprentice would give Tom more than fame, as it would also offer him a £250,000 business investment from Lord Alan Sugar.

A friend of Tom’s told the Daily Star Sunday: “Tom would be a fool not to want Lord Sugar’s money – and expertise. He’s got a very creative mind but he needs help with running a business.”

Commenting on the state of Tom’s companies, a financial expert told the London Evening Standard: “These balance sheets don’t look good at all. To say they’re in a dire situation is an understatement.”

Other friends of Tom told the News of the World: “Tom understands the hard work that goes into a new business. He is also aware that companies take time to perform at a profit. M&P Consulting has never been refused credit.

“Tom is not ashamed of the fact that the company has debts which are, in fact, loans from the two owners. He’s confident it will be profitable soon. Tom is determined to win The Apprentice to prove to Lord Sugar that he will make a fantastic business partner.”

However, rumours are circulating that the state of Tom’s companies may affect his chances at winning the show.
An insider said: “This is a huge embarrassment for Tom. He’s tried to keep this a big secret and hid it during the show.

“When Lord Sugar realises this, it won’t reflect well on Tom.

“He may make out he’s a successful businessman, but the figures speak for themselves.”

Apprentice star's secret debts revealed
Wednesday 13th July 2011

Threatening debt management company loses licence
Tuesday 5th July 2011

Men Behaving Badly star in £1m IVA
Wednesday 22nd June 2011

Repossession hotspots revealed
Wednesday 22nd June 2011

FSA breakthrough in the fight against boiler room fraud
Wednesday 15th June 2011

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Posted in: Apprentice,debts,revealed,secret,stars

Final blow for IFA network director duo

Two former directors of Alpha to Omega IFA network have been fined for compliance failings by the FSA.

Andrew Ruff and Richard Lindley, the directors in question, were fined after putting customers at risk of receiving investment advice that was not suitable.

Richard Lindley was fined £14,000 while Andrew Ruff was banned, in addition to facing a hefty fine of £28,000.

Alpha to Omega (UK) Limited (A2O), which was first investigated back in 2009 when the FSA reviewed some customer files of an appointed representative at A2O, entered administration in January last year.

Because of the 2009 findings, A2O was ordered to review the company’s compliance systems by appointing a person with the relevant skill-set.
The individual uncovered widespread compliance failings within the company, putting A2O’s customers at risk of receiving unsuitable investment advice.
The firm failed to protect customers from high risk options such as Unregulated Collective Investment Schemes (UCIS schemes), the FSA ruled.

The acting director of enforcement and financial crime, Tracey McDermott, said: ''Lindley and Ruff shared the ultimate responsibility for ensuring the financial advice provided by their network of advisers was suitable for their clients.

“They both failed in their responsibilities and this resulted in unsuitable advice being provided to some clients.”

The FSA stated that the two directors had been fined because they failed in their responsibility to control and monitor sales made by A2O’s appointed representatives.

They also stated that A2O lacked control and oversight over the network of advisers, which led to the risk that its appointed representatives were not offering suitable advice and treating customers fairly.

According to the FSA, “A2O failed to collect relevant and accurate management information to enable them to adequately identify, monitor and mitigate the compliance risks to which the business was exposed.”

Furthermore, the FSA stated, they ‘failed to take appropriate action in order to correct the behaviour of appointed representatives when they became aware of potential compliance risks’.

Ruff, whose role was that of Compliance Director, was banned because he was primarily responsible for the compliance arrangements at the firm.

Additionally, the FSA’s final notice reveals that Ruff was aware of a group of advisers, “so notorious with A2O that they were given nicknames such as ‘the famous five’ and ‘the three amigos’” who were well known for recommending high risk products including UCIS.

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Posted in: director,Final,network

In Profile: Nicki Stewart of Money Return Ltd

We sat down with Money Return Ltd's Nicki Stewart to find out a little bit more about the company and how they help people face up to their financial situations...

 1.   Firstly, what does MoneyReturn Ltd do?

We help customers recover any money owing to them, save money on monthly outgoings and protect their future interests. Money Return looks at most areas of personal cost, both past and present, and reviews each one to maximise monthly savings and money recoverable from claims or available from grants. We do this by offering consumers a without obligation comprehensive money saving review in the comfort of their own home. 

2.   What’s the best advice you can give to consumers to minimising the chances of them getting into debt?Review everything you do. There is always a more cost effective option available.3.   What do you find the most common cause of debt is? Biggest financial burden?The cost of living is going up and most of us are suffering from pay cuts, four day weeks or even redundancy. It is about unequal income versus expenditure.4.   What is the most unnecessary expense faced by consumers?Charges on PPI, charges on loans and credit cards and things like care home fees. People just aren’t aware of the protocol of hidden fees.5.   What is the most common reason for people getting into debt?It’s about income versus expenditure again. People are living as if they have the same salaries as they used to – there is still a commitment to pay bills.6.   How can people minimise their monthly costs?It is important to review everything and look at the policies. There is always a cheaper option. 7.   With so many people in debt do you think more needs to be done to encourage people to take a better approach to managing their finances?Yes. No one wants to be in debt, but people don’t know where to turn. Money Return Ltd has panels of experts all over the country. Consumers need that knowledge because they don’t know where to start.8.   Do you think more people are facing up to their financial problems?Yes, I think more people are aware of the situation but people are stuck in a rut and they don’t know where to turn.9.    Do you expect the financial situation to improve in the coming months?No, not with the state of the economy the way it is. We need to take control of our own situation.

More information can be found at www.moneyreturn.co.uk

Apprentice star's secret debts revealed
Wednesday 13th July 2011

Threatening debt management company loses licence
Tuesday 5th July 2011

Men Behaving Badly star in £1m IVA
Wednesday 22nd June 2011

Repossession hotspots revealed
Wednesday 22nd June 2011

FSA breakthrough in the fight against boiler room fraud
Wednesday 15th June 2011

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Posted in: money,Nicki,Profile,Return,Stewart

One in four unemployed Scots considers suicide

One in four unemployed young people in Scotland have been so depressed they have considered suicide, a new report reveals.

 Online mentoring service The Future You collated the responses of more than 750 individuals across the UK to highlight the negative effect that unemployment, and a subsequent fall into debt, is having on young people.Two thirds of the Scots surveyed revealed that being classified as a Neet – Not in Education, Employment or Training, made them feel bad about themselves, whilst one third often felt that their “life was being wasted”.Patrick Gilford, of Future You, told the Scotsman: "Traditional methods of getting young people into work aren't working. Young people have told us that career advisers and Job Centres were the least useful tool available to them.

"What they want is support from people their age, their families and working people they can take realistic advice from."

The report exposes the negative impact debt and unemployment has on self-worth, with one in five of the respondents surveyed expecting to rely on state benefits for life. All of those surveyed were 25 or under. Official figures for Scottish unemployment place it at 7.7 per cent, the same as the UK average. The Citizens Advice Scotland (CAS) has revealed that the unemployment rate for young people is around 20 per cent. The chief executive of CAS, Lucy McTernan, said: "The evidence from Scottish advice bureaux shows that young people in Scotland have been hit hard by the recession, and that this is really causing a wave of anger and despair across their generation.”She revealed that a survey CAS conducted of Scots aged 18 to 25 highlighted that “the scale of the crisis in our youth is much greater than is generally realised.” 

She revealed: "One in every five young people aged 16 to 24 are now unemployed. For 16- to 17-year-olds, this figure jumps to one in every three."

Apprentice star's secret debts revealed
Wednesday 13th July 2011

Threatening debt management company loses licence
Tuesday 5th July 2011

Men Behaving Badly star in £1m IVA
Wednesday 22nd June 2011

Repossession hotspots revealed
Wednesday 22nd June 2011

FSA breakthrough in the fight against boiler room fraud
Wednesday 15th June 2011

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Posted in: considers,Scots,suicide,Unemployed

Fuel prices forcing drivers to make a permanent pit-stop.

Financially squeezed drivers have been hit hard this year by the increasing rise in fuel prices. As a direct result, more households are seeking debt advice to deal with the rising costs of driving.

Within the last year, 1.3 million motorists have given up driving indefinitely, as they can no longer afford to run their vehicles. New research from Sainsbury’s Car Insurance has also revealed that 76 per cent of remaining road-users are being forced to change their driving habits to save money.

However, for the many who do not have the option to change their habits (i.e. those with long journeys to work) a debt solution could provide peace of mind, as they would not have to sacrifice their lifestyle or indeed their job. Included in those changes, motorists are altering their fuelling habits. 26 per cent of which admit that they no longer fill up their tanks, for instance.

They are purchasing specific values of fuel, for instance £10 or £20 per visit. 38 percent of drivers have started using specific forecourts, as they perceivably offer cheaper fuel, or because they offer reward points.

“We estimate the average motorist has an annual fuel bill of over £1,700,” stated Ben Tyte, Head of Motor Insurance, Sainsbury’s Finance. This figure represents a 22.9 per cent year-on-year increase, and highlights just how much the rising cost of motoring is affecting households.

The average total cost of running a car in 2011 is an astonishing 21 per cent higher than it was in 2010, standing at around £3000.

This rise means that 45 percent of motorists (16.5 million people) admit to having to drive less and 7 per cent have even adopted car sharing. A further 10 per cent (3.53 million people) have been made to downgrade their car for a more economic, cheaper model. For those who either cannot afford to make these changes, or those who have but still cannot afford to drive, there is an effective solution at hand. An IVA is suitable for people owing £12,000 or more, and allows you to pay back as much as you can afford, over a five year period.

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Posted in: drivers,forcing,permanent,pitstop,prices

Another case of debt collectors using pressure tactics

by Nazma Noor on July 12th, 2011

Following on from our recent blog post about the debt collection letters sent to Lloyds TSB customers in debt management plans, this week we came across another instance where a debt collection company put a customer under pressure to pay back his debts.

This story initially came to light when “Phil”, the debtor, posted a question on the ClearDebt Community. You can view the community thread here: I am being pressured by a debt collection agency.

For anybody who is being pressured by debt collectors, here are some key points.

People in debt can sometimes receive aggressive sounding letters which seem to be sent from an external debt collection company, acting on behalf of the original creditor. However in a number of cases we’ve found that this supposedly external company is actually just another trading name of the creditor. Companies often create this pretence as a collection tactic to add pressure and intimidate the person concerned. One quick and easy way to see if this is the case is to read the small print in the footer of the letter, where it should state if the collector is a trading style of the creditor.

A debt collector isn’t a bailiff – they do not have powers to force entry into your home and you do not have to let them in. Companies may threaten to send door step collectors but more often than not, this is all it will ever be, a threat. Door step collection is a very costly and inefficient way to recoup money and is an option very few companies use, although they are more than happy to threaten it.

Creditors will use ambiguous language in letters to lead a debtor to believe that a collector has been at their home. Phrases like “we called your house today” or “we have tracked you to your address” can lead debtors feeling that a collector may be at their door any moment, when in fact they have never been to their home. One well known bank were sending postcard sizes cards, similar to the type delivery companies often use, to debtors homes saying that they had called at their home that day. However they had not been to the debtors property but in fact had “called” via telephone.

Most people don’t know the in’s and out’s of the court system and creditors use this to their advantage. Check what you have received contains a court stamp, if it does not then this letter is not an official court document. If the letter makes reference to appointing a bailiff, remember that before a bailiff can be appointed a CCJ must be obtained. The court would then set a repayment amount and they could only apply for a bailiff if you did not meet this repayment.

If your creditor applies for a CCJ the first thing you will receive is a County Court Claim form which you will need to complete and return within 14 days of the date of the form. Return the form to the Court as detailed on the claim form. As you owe the money, you should admit the debt and complete the form with your income and expenditure details, explain who else you owe money to and make an offer of payment.

Once you have returned the form to the court, the creditor/collector will receive a copy of your offer. They might object to your offer of payment (if they have applied for a CCJ then it’s unlikely that they will accept your offer of payment) so in most cases you will receive a Judgment after Determination. If this is more than you can afford then you can apply for a redetermination.

In order to apply for a redetermination you will need to complete a N245 form. This form is used to establish your income and expenditure as well as how much money you owe to other creditors. Make sure you include all relevant details (but remain realistic) as they will use these figures to determine your monthly repayment amount.

When completing this form, you must tick both the suspension of the warrant box AND the reduction in the instalment order box. By ticking both boxes it will stop a bailiff from being appointed and the court will also review the repayment of the debt, normally setting a monthly instalment amount.

Be aware that there is a £40.00 fee charged by the court for processing the N245 form, although you may be exempt of paying this fee depending on your circumstances. You can apply for fee remission by completing an EX160 form.

If you maintain the instalment amount, set by the court, no further action will be taken. Further action will only be taken if you do not maintain repayments. If your circumstances were to change and you were struggling to maintain the payments, then you can apply to the court to review the instalment amount.

The above is just a summary of the advice we gave recently to somebody in need, you can pose your own debt and finance questions here on the ClearDebt Community, or if you’d prefer to speak to somebody over the phone, you can reach us on 0800 019 2095.

By Nazma Noor and is filed under Creditor Behaviour.
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Posted in: another,collectors,pressure,tactics,using

Unpaid tax debt causes £1.6m hole in Staffordshire council budget

East Staffordshire Borough Council has revealed that residents and businesses which are not paying their council tax and are failing to take action on their debt problems have left a £1.6 million hole in the local authority’s budget.

The council said that after months of chasing tax debts, it had now been forced to take legal action to recover the money. Burton magistrates have granted multiple liability orders which will allow the council to pursue £260,000 of debt from 498 households in the area. Its debt recovery agents will also work to claw back a massive £1.4 million debt which has been racked up in business rates by 80 companies.

A council spokesman clarified the local authority’s position on tax debt recovery, and advised anyone who is struggling to pay any bills or taxes to seek immediate debt help. He said:

“At East Staffordshire Borough Council we follow the legislation laid down by central government in relation to non-payment of council tax and business rates and we take this responsibility very seriously, as it is unfair to those who pay their bills on time to be carrying those that don’t.

“However, taking individuals or businesses to court is our last option and if council tax payers or business rate payers find themselves in difficulty paying their bills, we urge them to contact us as soon as possible as there may be benefits, discounts or reliefs that can be applied which can reduce the amount to pay.”

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Posted in: budget,causes,council,Staffordshire,unpaid

Derbyshire man caught dealing drugs to tackle debt problems

A 24-year-old man originally from Glossop in Derbyshire has been caught attempting to deliver drugs to Dundee in a deal designed to help him tackle his debt problems.

Peter Hadley, 24, was arrested by police leaving a hotel in Perth with more than a kilo of heroin in his possession. He was caught after a tip-off informed police that Hadley was involved in supplying drugs and they spotted his car outside the Travelodge hotel whilst on another call. In addition to the drugs, which were believed to have a street value of £116,000, Hadley also had around £1,700 in cash on his person.

The High Court in Edinburgh heard how Hadley had serious debt problems, and it was this that motivated his crime. He had apparently borrowed money from an acquaintance in Liverpool, and the interest on the loan was mounting faster than he could cope with.

The crooked lender offered Hadley the chance to eradicate his debt problems by delivering packages, now known to contain heroin, to Dundee. Rather than seeking proper debt help for his problems, Hadley took this opportunity.

He had already travelled to the Scottish city on three previous occasions before he was caught, with the promise from the loan shark that his debt would be reduced by a few hundred pounds each time.

Krista Johnston, solicitor for the defence, made the case that Hadley had not previously been involved with the dealing or supplying of drugs, and argued that it was being threatened and even assaulted over his debt problems that had prompted him to do it.

Nonetheless, Hadley was sentenced to 40 months in prison for preparing to deliver the heroin.

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Posted in: caught,Dealing,Derbyshire,drugs,problems,tackle

Overstretched finances lead to debt for Midlanders

Over recent years many people from all around the UK have found themselves facing rising levels of personal debt as a result of the difficult financial climate, soaring bills and inflation, and in some cases a reduction in income. One recent report has shown that many people from the Midlands are now struggling with debt and getting deeper into debt as a result of having finances that are severely overstretched.

According to the report many people from the Midlands are no struggling to make their salaries last for the whole month, leaving them with a shortfall between when they receive their monthly wage and when they next get paid. Many of these people, who are having to cope with higher petrol prices to get to work, higher food prices, soaring bills, and spiralling living costs, are having to bridge that gap by borrowing money, either from friends and family or through credit cards, overdrafts, and even payday loans.

Over the past three months around five million people are said to have taken on more debt, which compares to four million people in the previous quarter. In the past twelve months around two million people have taken on more debt specifically to bridge the gap between paydays. This data comes from the insolvency trade body R3.

An industry official from the Midlands said: “It is extremely worrying that such a large percentage of people nationally are struggling to make it to payday and I know from professional experience that this is also the case here in the region. Many local individuals are using short-term loans to cover the gap in their finances. These loans tend to have high interest rates and often those who use this type of credit find themselves in a vicious debt cycle, particularly if they experience a sudden job loss. If individuals are experiencing difficulty in meeting their financial obligations, then it is important that they seek financial advice before taking out further lines of credit.”

Tags: higher petrol prices, Midlands, higher food prices, vicious debt cycle, debt cycle, financial advice, bills, credit cards, gap

Filed under: News

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Posted in: finances,Midlanders,Overstretched

New OFT Debt Management Guidance Makes Cases Like DCM Apex Less Likely

Debt resolution company, ClearDebt, is pleased that the OFT’s new debt management guidance, published on Tuesday June 14th June is likely to outlaw “full and final settlement” schemes such as those run by companies like DCM Apex, whose clients ClearDebt has been working with since that company went into administration on 2 March 2011.

Commenting, ClearDebt CEO, David Mond, said:

The guidance makes completely clear that it is to apply to firms offering full and final settlements and also that only in exceptional circumstances will a firm be permitted to retain clients’ funds for more than five days. Further, the guidance stipulates that a company cannot hold on to monies that should be sent to creditors unless both debtors and creditors are made fully aware of the fact and it requires client monies to be protected if the company itself goes bust.

Had these arrangements been in place before, it’s likely that many clients of companies like DCM Apex would be much better off now than they are.

The OFT guidance imposes much more detailed requirements on debt solution companies than has been the case until now. ClearDebt believes that the guidelines may force many debt management companies to throw in the towel:

The cost of compliance – both in financial terms and in more onerous business processes – will go up sharply when these guidelines are enforced.

says ClearDebt director of marketing and external affairs, Andrew Smith:

Many of our competitors, especially those that rely on cold-called leads bought from third parties, will, we believe, find it difficult to sustain their business model under these new rules.

By Marketing and is filed under Press Releases.
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Posted in: Cases,guidance,likely,makes,Management

ClearDebt recommends The ClearCash Prepaid MasterCard

For anybody who is in debt or struggling financially, we often recommend setting up a new bank account – particularly if you have debts, such as an overdraft or credit card with your bank.

As an alternative to basic bank accounts, we recommend our ClearCash Prepaid MasterCard® for anybody who has a poor credit history, and wants a payment card which is widely accepted.

The ClearCash Prepaid MasterCard is a payment card which doesn’t let you go overdrawn and has no late fees – you can only spend what you have loaded onto the card.

Another feature of ClearCash is the online BudgetMaster tool which can help you manage your outgoings and identify areas where you are overspending.

Here are some of the other great features:

Standing order and bill payment facilitiesAbility to check your balance online or by text, 24 hours a dayAccepted anywhere the MasterCard mark is shown (over 29 million locations worldwide)Top up your icount by bank transfer, PayPoint, Post Office and ChequeSupport via email, customer services phone line and online livechat facilityFree purchase protection for pay monthly cardholders on purchases made up to £1,500

ClearCash is part of ClearDebt Group plc and if you’d like to find out more about whether a ClearCash Prepaid MasterCard could help you manage your money visit the ClearCash website now.

By Marketing and is filed under Managing Your Money.
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Posted in: ClearCash,ClearDebt,MasterCard,Prepaid,recommends

Do you trust kitemarks?

Increasingly kitemarks are being used by companies in their communications materials to signify importance and trust to consumers.

Kitemarks, or logos from third parties are ever more evident these days, and I’m not just referring to the financial sector. Perhaps the most outstanding example of third party logos are flat screen TVs which manage to plaster ever more combinations of the weird and wonderful stickers of high tech features that your 42? plasma is capable of.

In the consumer finance sector, third party logos and kitemarks are also seeming to trend. This week saw the launch of a new kitemark in the high street banking sector.

Vote in the poll and leave your views below in the comments. If you voted Depends, do explain your thoughts below in the comments section.

Judging by reaction on Twitter from seasoned finance journalists it would seem newly launched kitemarks in the consumer finance sector are coming under scrutiny.

Finding it telling, ironic and a bit sad that our efforts to improve banking products in UK, as a charity, has attracted cynicism. Sigh!Thu Jun 16 10:10:44 via webFairBanking
Fair_Banking

The above is just extracts from various healthy jousting on Twitter, we’re sure the debate will continue, to that end you may be able to follow and add to conversations using the Twitter search of the term kitemarks or better still hashtag your conversation #kitemarks.

So how does ClearDebt use kitemarks?

ClearDebt uses third party logos on its webpage. One of these logos is to denote membership of an important debt industry regulatory body that maintains professional standards and offers extensive certified programme of training qualifications, the first of its kind in the UK, for individual debt advisors. We think this is important.

The other logo is of a independent third party website to ClearDebt that publishes regular feedback and ratings of companies in the sector. We understand it’s not just what we say about ClearDebt that matters to people, we welcome others to be the judge of ClearDebt in an open manner.

Share your thoughts in the comments.

By Paul Gailey and is filed under Debt Management.
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Posted in: kitemarks,Trust

Check the license of a debt adviser

Last year ClearDebt blogged briefly about how to check the license of a debt company with an explanatory video of Consumer Credit Register.

Well, the consumer borrowers champions Zero-credit whom occasionally guest blog here at ClearDebt have produced an excellent in depth video explanation of how to fathom the search page of the Consumer Credit Register.

As Zero-credit states in the video,

with so many credit and debt companies being closed down, it’s easy to worry about picking a dud…

There is a remarkable amount of information available online, sometime it takes more effort than normal to uncover it.

Next week ClearDebt will blog a similar tutorial on a related topic, stay tuned.

ClearDebt’s Consumer Credit License is 0565479 and the company registration number is 5157741.

By Paul Gailey and is filed under Creditor Behaviour.
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Posted in: adviser,Check,license

The Daily Mirror, John Denham MP and fee-charging debt management companies

by Andrew Smith on June 22nd, 2011

Dear Tricia and John,

I read both your pieces in the Daily Mirror:

I do agree there’s no room at all for rogue debt management services – and I strongly believe that the coming 12-24 months will see the industry I work in and believe in contract to about half it’s current size – at least in terms of the number of companies trading.

That could be a disaster for debt advice in the UK, of course, because the free-to-client sector tells us they can only deal with half the demand.

But, I believe fee-chargers will be able to take up the slack and that they will do so without causing consumer detriment. Tricia, I believe we are on the brink of being fully regulated and that we will thrive as a result.

John, it was good to see you say that there are some “excellent companies out there”: I really believe that, not long from now, it will be only those companies that are left.

The industry is taking pains to be able to show consumers that we are worth our fees – with a 210 hour study, properly examined, Advanced BTEC qualification for the advisers employed by Debt Resolution Forum (DRF) members, with a truly independent complaints process and with annual independent inspection by a government trusted regulator (the Insolvency Practitioners’ Association).

Much of the advice provided by the fee-free sector just stops at advice. Good advice – but that’s all. Often clients aren’t given the robust friend they need to ensure they pay their contribution monthly and that it gets distributed to creditors. And, one can’t be sure it’s always the right advice either. In their 2010 annual report, one of the largest free sector organisations, which advises people at every income level, says that it advises Individual Voluntary Arrangements – a really good deal for creditors and debtors who are suitable – in about seven per cent of cases. That ‘s probably three or four times lower than it should be.

….40 minutes or so on the phone. Roughly half our well-trained advisors time is spent giving good advice for which we will never charge a penny.

Oh – and the advice? Clients sometimes can’t get that either from the free sector. The same organisation’s report says it only offers advice at time of first call to 25% of enquirers. Face to face advice offered by services like CAB is unable to deliver the volumes that are necessary, and, in any case, people with debt problems often need multiple sessions in order to understand their own situation.  Almost all fee-chargers offer this call for free to all their enquirers – and it usually represents 40 minutes or so on the phone. Roughly half our well-trained and yes, well-paid, advisors time is spent giving good advice for which we will never charge a penny.

You both mentioned the OFT found 129 firms in breach with action being taken against 54. And that they didn’t name and shame. I agree – there is a dilemma here, but many breaches were minor – a significant number had already been corrected and, as in every other sector in which they work, the OFT consider revealing names to be a presumption of guilt – and everyone is allowed a fair hearing, right?

Well – I think there will be many more who do lose their licences or who are required to change the way they work and that will be a good thing. But there are also many (take DRF members for instance) who are committed to fairness, transparency and high standards.

Now,  John, I have to take you up on your politics too. You say that Labour left the Tories with the opportunity to act as a result of your 2009 consultation.

If this is the Ministry of Justice consultation on regulated debt management plans then, I believe, it was completed in 2009 and it was a Labour ministerial decision NOT to publish: I may be wrong – but I don’t think I am. It’s now, I’m led to believe, with the Insolvency Service and, I think, likely to form part of a consultation later this year that has a chance of radically changing the landscape for debt solutions. So, the effort’s not wasted. Credit where credit’s due too: The OFT’s new debt management guidance published last week was a result of work almost all of which was done while the last Labour Government was in office.

I absolutely agree with John that simply providing guidance on money isn’t the way to go: time and time again we see debtors situations go from bad to worse if all they get is guidance or advice.

People with debt problems need solutions as well as advice.

Some debtors can afford to pay and there is no reason why creditors shouldn’t pay in almost every case (after all, having priced their products on the basis that they have a good inkling of the proportion that will fail to repay, any return the banks and credit card companies get from debt collection is bunts).

The ultimate disappearance of the OFT is, by the way, probably a good thing for the tighter regulation of the debt resolution sector. Under the Financial Conduct Authority (or whatever it’s called today) we’ll fall under a rules based regime that will make compliance even more central to the way we work than it is today.

For many, the fee-charging debt resolution sector provides good advice and well-managed solutions. Well managed companies in the sector should be working more closely with the publicly funded and creditor funded organisations.

Without us, many would simply go unadvised and more would get good advice, but no real debt help. A move to funding the Money Advice Service might see that get worse.

By Andrew Smith and is filed under Government policy on debt.
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Posted in: Companies,Daily,Denham,feecharging,Management,Mirror

Parents raid kids' piggy banks

With the financial squeeze increasing, more parents than ever are dipping into their children’s bank accounts when in financial difficulty, a survey has revealed.

With many parents trying to save for their offspring’s futures, a shocking 57 per cent now borrow from their children a recent survey has found, highlighting the need for professional debt advice to be sought. New figures have revealed that 57 per cent of parents now rely on their children financially, frequently borrowing from their dependent primary school aged children. The research carried out by Clydesdale and Yorkshire Banks found that one in two parents would not hesitate to borrow money from their children aged between five and twelve. Mother’s were the worse culprits with 43 per cent borrowing when they needed change, compared to 23 per cent of fathers. 33 per cent borrowed money from their children because they didn’t have any change, but 13 per cent borrowed money because they were broke. Only 3 per cent of respondents admitted to not paying back money they borrowed. However, the research revealed that 78 per cent of parents are putting money aside for their children’s future. Back in December 2009 22 per cent of parents admitted to dipping into their children’s savings, a survey by Engage Mutual Assurance found. Parents used the money for bills, car repairs, family holidays, and for covering the cost of Christmas. Whilst back in December 2009 parents were using their children’s money to cover unexpected costs, a rising number are now relying on their savings to make ends meet. Steve Reid, Retail Director for Clydesdale Bank, said: “It is encouraging that so many parents are not only saving for their children’s future, but also teaching kids about the importance of saving and working for their money from a young age. “A third of parents opening a bank account for their children while still at primary school is a fantastic way to improve financial education and instil the importance of saving in children from an early age.”
Manchester debt firm is liquidated owing creditors over £2.2m
Wednesday 11th August 2010

Bankrupt football legend probed by police over loan fraud
Monday 2nd August 2010

Mortgage broker ordered to repay £1.5m of client money used to pay off debts
Wednesday 14th July 2010

Barclays lifts lid on banking write-offs
Wednesday 20th February 2008

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Posted in: Banks,parents,piggy

Accountant repays just £1 after £26k fraud

A Lincolnshire accountant has been given a suspended jail sentence for committing fraud, after being caught by HM Revenue and Customs. However, since he is now bankrupt, he has only been forced to repay £1 of the funds he swindled. 

Alan Budd, 56, of Nurses Lane, Skellingthorpe, meddled with cheques from clients adjusting the payee name to his own firm, AMB Accounting. The fraud came to light when a client of Budd’s was due £9,000 in tax rebates for overpayment, but never received the funds. At Lincoln Crown Court yesterday, prosecutor Jeremy Janes said: “A number of individuals were affected. The amounts vary from a few hundred pounds to £5,000.“For two years he was entitled to relatively hefty tax rebates of about £9,000 each through overpayment for self-assessment.“The defendant had registered his address for correspondence. He obtained these cheques and put them into his own bank account.“Mr Allen discovered that by chance. He realised he was owed some £18,000 and had it out with Budd. At that stage, Budd made a variety of excuses and offered to pay some of the money back. Gordon Aspden, defending, told the court that Budd had health issues, including a bad back and according to the Lincolnshire Echo was ‘being treated with morphine to control his pain’. Recorder, Christopher Goodchild told Budd: “Your offences of theft amount to a breach of trust, but I accept you are not a well man.” According to the Lincolnshire Echo ‘Budd had earlier used deception to purchase a £16,000 new Mini car, Budd used a different address to conceal the fact that he had a series of County Court Judgements against him’. Despite benefitting by £56,741 through his fraudulent activity, he was declared bankrupt in February so was only ordered to pay a nominal £1 after he was found to have no realisable assets. Mr Budd admitted two charges of theft, totalling £18,624, between August 2008 and February 2009, and was handed a 12-month jail sentence suspended for two years with a six-month night-time curfew.
Manchester debt firm is liquidated owing creditors over £2.2m
Wednesday 11th August 2010

Bankrupt football legend probed by police over loan fraud
Monday 2nd August 2010

Mortgage broker ordered to repay £1.5m of client money used to pay off debts
Wednesday 14th July 2010

Barclays lifts lid on banking write-offs
Wednesday 20th February 2008

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Posted in: Accountant,after,fraud,repays

Ex-football Chairman embroiled in fresh fraud scandal

Former Tipton Town FC chairman, Bill Williams is being probed by police regarding three further fraud incidents.

It was revealed earlier this month that police are investigating three fresh fraud cases, after the accountant was jailed for illegally pocketing more than £276,000 from the life insurance and pension policies of a murdered father. Bill Williams, of Chester Road, West Bromwich, spent the swindled money on luxury family holidays to the USA, season tickets for Aston Villa football matches, and extravagant family parties he also invested large sums into Tipton Town FC. A further five individuals have come forward to police, claiming to be victims duped by Williams, but his involvement is yet to be confirmed.  According to the Express and Star ‘father-of-two Williams is less than a month into a five-and-a-half year prison term for taking cash owed to the daughter of murdered South Staffordshire company director Andrew Diack’.  Williams worked as an accountant for Featherstone-based Spray Tanker Services, which 29-year-old Andrew Diack co-owned. Days after Diack was stabbed to death at the Flying Dutchman, a pub in Wolverhampton in 2009, Williams set about his plan to swindle the money owed to his two-year-old daughter. The Express and Star reported at the beginning of June that ‘Williams listed himself as an executor of an insurance and pension policy he helped to set up for Mr Diack’. Williams also duped pensioners Ronald and Sheila Haynes out of their £97,000 life savings. At Wolverhampton Crown Court, Judge Amjad Nawaz described bankrupt Williams as a man who ‘preyed on the vulnerable’. ‘The Express and Star revealed earlier this month that Mr Diack was not the only victim of 59-year-old Williams. He was jailed in 1986 for a previous £100,000 fraud while manager of Great Wyrley’s Harrisons FC’. The amount of money involved in the alleged cases has not yet been revealed but an investigation is underway.
Manchester debt firm is liquidated owing creditors over £2.2m
Wednesday 11th August 2010

Bankrupt football legend probed by police over loan fraud
Monday 2nd August 2010

Mortgage broker ordered to repay £1.5m of client money used to pay off debts
Wednesday 14th July 2010

Barclays lifts lid on banking write-offs
Wednesday 20th February 2008

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Posted in: Chairman,embroiled,Exfootball,fraud,fresh,scandal

FSA bans two brokers for 'deliberate failings'

The Financial Services Authority (FSA) yesterday banned two insurance brokers from working in the financial services industry after they were found guilty of misconduct.

Andrew Porter and Alexander Brincat are no longer eligible to work in the industry after the FSA carried out investigations which uncovered a number of failings, including a failure to monitor the financial position of Brincat’s insurance firm Wise Owl Services Limited, which has also had its permissions withdrawn. 

Brincat was the sole director and a shareholder of small firm Wise Owl, which specialises in insurance policies for buildings and life insurance.
According to the FSA, between September 2009 and August 2010 Brincat failed to monitor adequately the high cancellation rate of life insurance policies sold by Wise Owl.

He was also found to have failed to disclose to Wise Owl’s insurance providers that it had a sales strategy of offering free life cover to customers and left the country for prolonged periods without putting in place adequate compliance arrangements at Wise Owl.

In addition, Brincat did not ensure that Wise Owl had sufficient resources to pay premiums due to customers who had agreed to the free life cover offered by Wise Owl, and repay sums of commission claw back owed to insurance providers when such cover was cancelled. He also failed to monitor Wise Owl’s financial position, including the extent of Wise Owl’s liabilities to insurance providers.

Acting director of enforcement and financial crime, Tracey McDermott, said: “Alexander Brincat’s incompetence at Wise Owl posed a risk to other market participants and to confidence in the financial system. In order to remove this risk Brincat has been banned.

“We will continue to take action against individuals who, either through incompetence or fraudulent activity, allow their firms to cause such losses to other market participants.”

As a result of his actions Brincat has been banned from performing any function in relation to any regulated activity.

Porter was the sole shareholder and the only broker at Porter Insurance, which specialised in providing insurance policies for individuals and businesses. The FSA found that he had deliberately underinsured clients and kept the surplus money for his benefit.

He was also deemed to have exposed companies to significant financial risk, by misleading them into paying for cover which was inappropriate for their business needs and therefore left them underinsured.

Porter was also exposed as having falsified documentation in the names of companies to mislead those clients and recipient insurance companies.

Tracey McDermott said: ''Andrew Porter deliberately underinsured clients, many of whom were involved in high risk trades. He provided them with policies he knew were potentially worthless and would not payout if they suffered an accident.

“This is not only a dishonest and deliberate failing in his responsibility as an approved person, but a complete breach of trust with his clients.''

The FSA said that it considered Porter’s dishonest conduct to be serious because he abused the trust and confidence his clients and recipient insurance companies placed upon him, exposing the clients to significant financial losses.

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Posted in: brokers,deliberate,failings

Chaotic state pension deters young savers

Making the state pension simpler could spur millions of younger people to save more towards their retirement, new research shows.

A Populus survey for the National Association of Pension Funds (NAPF) found that half (47 per cent) of those aged between 18 and 34 - more than six million people - would save more for their old age if they knew how much state pension they would get.Surprisingly, younger people felt much more strongly than older age groups about a better state pension. Joanne Segars, Chief Executive of the NAPF, said:“They’re keen to take more control of their retirement, but they need a clearer state pension foundation on which they can build their own nest egg.“If they could see the state offer might not be enough, they’d be more inclined to get their own savings sorted, partly to avoid working past an increasing retirement age.“The current system is a dog’s breakfast and makes it impossible for people to plan their future. Even pensions experts struggle to work out what they’ll get, so what hope does Joe Public have?”The Government is currently thinking of simplifying the system and introducing a more generous flat-rate pension guaranteeing the equivalent of £140 a week in today’s money.The current UK state pension is one of the lowest and most complicated in Europe. The system of pension credits and a state second pension makes it very difficult to estimate what an individual’s state pension will be.The Populus survey showed almost two thirds (63 per cent) of those aged 18 to 24 said not knowing what they would get from the state makes it difficult to plan for their old age, rising to 70 per cent for 25 to 34 year olds.Joanne Segars concluded:“It can be a big ask to get someone in their 20s thinking 40 years ahead. The proposed reform of the system would be a huge improvement, but changes must stay in place over the long-term.“We have to get younger people switched on to their financial future. Starting a pension early can make a massive difference to the final size of a retirement pot. A clearer state pension will bring more young people into the habit of saving.”
Manchester debt firm is liquidated owing creditors over £2.2m
Wednesday 11th August 2010

Bankrupt football legend probed by police over loan fraud
Monday 2nd August 2010

Mortgage broker ordered to repay £1.5m of client money used to pay off debts
Wednesday 14th July 2010

Barclays lifts lid on banking write-offs
Wednesday 20th February 2008

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Posted in: Chaotic,deters,pension,savers,state,Young

The A4e blog: Self-employed and small business personal debt

In 2008, at the heart of the financial crisis, our advice helplines started getting a new thread of calls from people who were self employed or running their own business. A significant number were trades people, heavily reliant on the property building and development markets which had slipped into crisis point. Whereas before they had enjoyed a good relationship with lenders, suddenly very different behaviours were emerging. Foreclosures began, where before a couple of bad months and skipped payments due to poor trading would have been accepted. 

Most of the calls to our advisors came in crisis, with a number even calling from outside the court building, very late in the day. Our analysis of some of the financial information our clients gave us showed that the average loan to value of their properties was only 25%. But the housing market was dead. As well as mortgage debt, the issues discussed on the calls were often only the ‘tip of the debt iceberg’ with a range of credit cards and other lending products. Levels of indebtedness and people’s preparedness to take on debt, as well as the propensity of the banks to lend, often make the headlines. However, underneath this we are not doing enough to support access to finance and understanding of debt for the group of people driving enterprise. The lack of access to bank finance for very small businesses or microfinance means that many people blend their personal and business debt. I was chatting to a young woman who had set up a franchise in hairdressing and her accountant had scared her to death. Looking at her numbers though, there was a mixture of personal and bank debt all muddled up with different terms and impact on her personally and the business. Of course, the worry hindered her ability to focus on the business. She worked through it over nine hard months.Due to the lack of access to a range of products that support self employment, and an underdeveloped UK microfinance offer, debt is a major problem for many people running or starting their own business. The capability and understanding of lenders varies considerably, as does the experience and understanding of people setting up. As the cost of living continues to rise, credit flows are easing a bit, but behaviours on missed payments/defaults continue to be hardline and there is a risk of further debt problems for many people in this space.The banks are seeking to increase credit flows and there are attempts to better support small business and new business by returning to a more ‘old fashioned’ model where bank managers had a greater understanding of, and better relationships with, the small businesses they banked. However, the level of ‘informal’ borrowing to support the self employed or small enterprises is still enormous. The use of personal credit to ‘tide over’ or ‘purchase essentials’ is significant. We have all done it and it is human nature. The debt support services on offer must provide a sharper focus on specific support for entrepreneurs and the self-employed. Knowledge of the range of support for the business aspect is as important as the debt advice per se. Simple techniques can also help people to help themselves. Get a separate credit card and only use it in emergency and only for business if you absolutely must. Pay it off as soon as you can so you don’t accrue interest. Be equally as disciplined on personal and business finance if you are mingling these together. Have that Dr Pepper moment – what’s the worst that could happen - and plan for it. The provision of finance for very small business is hard. As with personal finance, accessing £200 for four weeks is difficult because the products are not there. Some of the best international finance providers in microfinance still cannot differentiate between personal and business finance. However, we do need to do this, in order to look at the different issues of personal gearing and gearing a small business, prudently, to succeed. Debt impacts us all and better products coupled with better financial understanding are essential if we are to avoid further problems as the economy begins to pick up and interest rates on mortgages begin to rise.
Manchester debt firm is liquidated owing creditors over £2.2m
Wednesday 11th August 2010

Bankrupt football legend probed by police over loan fraud
Monday 2nd August 2010

Mortgage broker ordered to repay £1.5m of client money used to pay off debts
Wednesday 14th July 2010

Barclays lifts lid on banking write-offs
Wednesday 20th February 2008

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Posted in: business,personal,Selfemployed,small