Thomas Cook experiences debt crisis

One of the UK’s leading travel retailers, Thomas Cook, has fallen into debt crisis. This has led to fears that business debt could eventually translate into personal debt for those involved.

When businesses experience financial difficulty, such as a fall in share price, this could affect the staff. A period of redundancy could ultimately lead to personal debt.

Trading issues have affected the company badly. This has promoted a widespread review of the business and raised awareness over the need for cutbacks.

The travel industry has been hit hard by the economic downturn and Thomas Cook’s UK arm has been severely affected.

Shares have fallen by 80% in the last year and low profit predictions have only served to put off investors.

The company did not ask shareholders for a rights issue to raise cash. However, the company is in talks with a number of banks as it strives to improve its ‘financial’ flexibility.

Speaking to the Evening Standard, Finance Director Paul Hollingworth said; “The group delivered steady results for July and August, in line with our expectations, but September has been a more challenging month.”

Manny Fontenia-Nova, the Thomas Cook Chief Executive who was paid £15 million over the last four years, left the company suddenly in August.

The latest unemployment figures from the Office for National Statistics revealed that over 150,000 redundancies were made in the three months up to August.

Increasing levels of redundancy, combined with the high cost of living, could leave many in debt.

Seek debt help

Debt problems are widespread and with many now out of work, a number of people could be in arrears with their mortgage, rent, bills and other financial products.

Debt Advice Group could help manage debt problems with specialist advice over a wide range of solutions. Individual circumstances vary drastically, therefore the specialist advice could be tailored to meet your needs.

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Posted in: crisis,experiences,Thomas

UK faces highest unemployment rate for 17 years

Unemployment has risen to its highest level for 17 years, according to official figures.

The Office for National Statistics recently published figures showing that 114,000 more people have become economically inactive between June and August this year. The unemployment rate has increased by a staggering 8.1%, according to the new figures.

Unemployment levels have not been as bad since 1994 and young people have been hit the hardest.

The shocking figures reveal that youth unemployment has hit record highs, almost touching the 1 million mark recently. One in ten young people aged 16-24 are currently out of work. Youth unemployment makes up 21.3% of the total jobless market as a staggering 991,000 young people are out of work.

The employment rate was at its highest in the East and South East, and at its lowest in the North East.

In the three months to August there were 9.35 million people out of work between the age of 16 and 64.

The delayed impact of the recession on the UK economy has been made clear by the recent jobless figures.

Deep job cuts to the public sector will also have a huge impact on the unemployment figures for years to come. More than 300,000 public sector jobs are to be cut in the next few years and the UK economy is on the brink of another recession. This could push the country over the edge into serious debt.

Debt Management

As the cost of living soars with higher inflation rates, many people are living on the breadline.

The Institute of Fiscal Studies recently published research estimating that families will be £2,000 worse off a year by 2013. This will be the greatest fall in income for 35 years.

This is likely to plunge several families into poverty. Poverty is expected to rise by 800,000 in terms of working age adults.

Debt Advice Group can help to address your debts with specialist advice.

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Posted in: faces,highest,unemployment,years

Cost of Christmas causes concern for consumers

The rising cost of living is taking its toll on the British public and, with Christmas looming, it might not be long before the nation spirals into debt.

Research from price comparison website, MoneySupermarket , found that 60% of the public is worried about Christmas debt.

Over 50% of people had serious concerns about how they would cope financially over the holiday season.

“For many families Christmas is always a financially tricky time. Ultimately, Christmas needn’t be a financial headache,” said Kevin Mountford, Head of Banking at MoneySupermaket.

Funding the festivities could be particularly difficult for many this year as the rate of inflation is expected to increase to 5% before the end of the year. Higher gas and electricity bills are likely to tighten the purse strings further.

“This year will be tougher than most as a result of the increases in the cost of living and widespread pay freezes. It’s no surprise therefore to see that more people are worried about funding the festive period this year compared to previous years,” continued Mr. Mountford.

“If you cannot afford to borrow to fund the festivities or don’t have any savings, don’t despair. Consider having a thrifty Christmas and make your own cards and presents – we are all feeling the pinch and doing Christmas on the cheap needn’t prevent you enjoying the occasion.”

Christmas Debt

Overspending during the festive season is common, many people turn to credit cards in order to be able to afford the gifts, travel, food and other expenses.

However, if people become too reliant on financial products they could soon find themselves in debt.

If you are concerned about the cost of Christmas this year, you could talk to Debt Advice Group who can offer specialist and confidential  debt advice.

Confidential advice could be offered to discuss debt problems.

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Posted in: causes,Christmas,concern,consumers

Fourth successive monthly fall in consumer confidence

Friday 21st October 2011 Consumer confidence in the UK has reached a point close to its all-time-low as a fourth successive monthly fall has been recorded by the Nationwide Consumer Confidence Index.Households are struggling to cope with weak economic growth, rising unemployment, and further fears about a double-dip recession; factors which have combined to place consumer confidence a mere four points above its record low back in February.The survey revealed 80 per cent of households are concerned there will be no improvement over the next six months.Robert Gardner, Nationwide’s chief economist told This is Money: “The economy has hardly grown in 2011 and pressure has continued to mount on household budgets.”Mr Gardner suggested ‘recent signs of concerted action’ by politicians and policymakers may bolster sentiment in the months ahead. He added, “This could translate into increased consumer confidence if people believe these efforts will be successful in lifting the economy out of its current malaise.”Sir Mervyn King, Bank of England Governor, told households earlier this week that they could anticipate that the high cost of living should have been alleviated somewhat next year.
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Posted in: confidence,Consumer,Fourth,monthly,successive

Top tips to cut down your energy bills.

This winter it is thought that hundreds of thousands of families will struggle with their energy bills after seeing a huge hike in the cost of fuel over the course of the summer. A report by the Citizens Advice Bureau has recently suggested that this year those that are the most vulnerable will have to make a choice between either feeding themselves or keeping warm.

This week marks world Energy Saving Week, an initiative that aims to get everyone thinking about their energy usage and look at what they can do to cut down and reduce their bills.

Here are a few tips that we would like to share:

Leaving your appliances on standby still uses electricity. If you switch them all off at the plug you can save money of your bill.Insulating your home can make a big difference to your bills. Lots of energy companies now provide grants to those that are the most vulnerable or struggle to pay their bills to enable them to insulate their homes.Switching all of your light bulbs in your house to energy saving bulbs can make a small difference, but a difference none the less.By turning your thermostat down by just 1degree you can save 10% on your energy bill.

Although only a few small steps, they can not only save you money but will also make the planet a little bit greener.

We would now like to hear your tips, what do you do to try and keep your bills down? No matter how big or small, we want to know!

Written by Gemma on October 18th, 2011

Filed Under  Budgeting   |  Trackback  |   1 Comment

Rich Ronson

Some great points there to help save on the bills. Just thought I’d add that LED bulbs can help keep the costs down too as they use up less electricity and last longer.

October 20, 2011 at 4:38 pm    

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Posted in: bills,energy

What can Payplan do differently?

I recently spoke to a lady who had previously contacted a debt management company for some advice. They explained to her that she didn?t have enough money to begin a Debt Management Plan and that her only option was bankruptcy or to come to an agreement with her creditors where she pays token payments.

So after eventually plucking up the courage to call and speak to someone about her debt problems she felt very disheartened and lost hope in trying to find a viable solution. This was when I asked her to call Payplan and speak to one of our debt specialists, to which she replied ?what?s the point??

The point is, each and every debt management provider works differently, so one person has said you have limited options, this doesn?t mean that you do actually have limited options. With all things debt related it is always best to speak to a few debt specialists and get a few opinions before making your decision.

The cost of a call to Payplan is just a few moments of your time and nothing more. The worst that could happen is that we tell you the same as you have heard before. But with Payplan at the very least we will provide you with a Self Help Pack and will assist you every step of the way with our dedicated team, the Special Advice Team.

Written by Gemma on October 10th, 2011

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Posted in: differently,Payplan

Redundancy brings a rollercoaster of emotions

I am new to Payplan and really pleased to be part of the team. It?s not just that this is a great place to work ? and it is ? it?s just that after being made redundant last year I was worried I may be out of work for some time.

It led to a rollercoaster of emotions. Well-meaning friends and family told me not to worry and assured me I would soon find another job. I?m sure they believed what they were saying, but kind words don?t pay bills or put food on the table.

I soon found out that when you lose a regular income the spectre of debt soon follows. It?s amazing how quickly I felt vulnerable. I can understand why so many in a similar situation don?t bother to shop around for the best solutions when it comes to coping with debt.

Those adverts offering instant cash or debt solutions can seem like the answer to a prayer when you are desperate. There is evidence that only 1 in 6 people with debt problems seek help and when they do seek advice they tend not to shop around or pay much attention to the high fees.

At Payplan this is something my colleagues hear all too often from clients who come to us after having bad experiences with unscrupulous fee-charging companies. Many of them are unaware of free-to-client debt solutions, like those at Payplan.

So, in my new role as the Public Relations Manager, I am looking forward to raising awareness of Payplan and its role at the forefront of the campaign for regulation of the debt management sector.

In the meantime, I?ve been told that the average working person only has enough money in reserve to cope with being unemployed for three months before debt becomes a real problem. I?d love to hear your views. Post a comment or send me a message via Twitter @JanePR_Payplan.

Written by Gemma on October 10th, 2011

Filed Under  Debt News   |  Trackback  |   1 Comment

Naomi Lowde

For your interest…Please check out Redundancy the Musical http://www.redundancythemusical.com/ – which focuses on the threat and process of redundancy unfolding an emotive tale of love, loss and life transformation. The musical debuting in London February 2012.

October 10, 2011 at 4:09 pm    

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Posted in: brings,emotions,Redundancy,rollercoaster

Diary of a Debt Advisor: R for Relationships

After years in the debt management industry I thought it was finally time to lift the lid on some of the most interesting cases of my career. Every week I will reveal an exclusive insight into the people behind the debts and how I managed to help them....

This week, I have been thinking a lot about relationships – about the huge impact a bad one can have on an individual’s ability to cope with debt. I am not necessarily just referring to a relationship with a partner (though of course romantic relationships can definitely be tainted by monetary worries) but also familial relationships, with children, parents, siblings....

One African lady that I came into contact with had been made physically unwell as a result of struggling with debt. Erika had a highly paid job with the NHS, earning around £40,000 per annum and working significant hours. Unfortunately, she had a son who suffered with autism. The boy wasn’t a bad lad, but he was keeping her awake because he was smashing up his bedroom every night and causing all sorts of damage to the house. Erika could not concentrate on her job due to severe lack of sleep – which escalated to such an extent that, in the end, she had to start reducing her hours in order to cope with the situation, and to be there for her son.

She was not working more than 16 hours per week – surviving on a fraction of her wage combined with some benefits. By the time I came into contact with her, however, she had had to give up her job completely to cope with her son (who was getting worse) and she was unwell with sheer physical exhaustion.

She confided in me during our meeting that it was not only coping with her son that was adversely affecting her health, she was also being hounded day and night on the phone, via letters and emails from creditors. Erika told me, whilst pointing her finger to a picture on the wall of Jesus Christ, that if it hadn’t been for him, she would have done something very stupid. I felt so sorry for this poor lady, who had to cope with so much – and after much negotiation, I managed to reduce her creditors’ payments by 75 per cent.

Another lady I helped was suffering from debt as a result of a romantic relationship. Her husband was a gambler, a womaniser and an alcoholic. Having used up all his credit and with his own credit file in a bad way, he forced his wife to go out and get credit cards and loans for him in her name. Of course, she began to struggle and when she was not longer able to secure credit because he was not paying back what he owed, he threw her out on the street and changed the locks. Mary was left with no money and huge debts. After living on the sofa of a friend for some time, she eventually met a builder and fell in love. He was a widower, who soon asked her to move in with him. It was Pete who eventually contacted me to see if I could help her, because he could not bear to see her being chased by creditors.

Luckily, I was able to help her get her payments down to an affordable level, with the help of her new partner. The poor girl was sobbing her heart out the entire time I was there, but in the end, when I was able to give her the good news, she came over to me and thanked me for giving her back her life.

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Posted in: Advisor,Diary,Relationships

Three more debt management companies disciplined by regulator

Three debt management companies have had action taken against them by the OFT as part of the regulator’s ongoing enforcement work.

David Fisher, the OFT’s Director of Consumer Credit, said: “We expect commercial debt management businesses to meet the standards that we set out in our guidance. If they do not, we will take action as we have demonstrated here.”

The regulator has revoked the licence of Prime Legal and Financial Services (PLFS), which is based in London’s Mile End, after it failed to demonstrate the necessary skills, knowledge or experience to hold a consumer credit licence and advise consumers on debt management matters. According to the supervisory body, the company did not have appropriate business practices and procedures in place.

The OFT also took action to stop Money Advice Direct Limited (MADL), also based in London, from using its existing trading name ‘The UK Insolvency Helpline’ and the proposed domain names which also include the word ‘helpline’. The OFT stated that the names fail to make it clear to consumers that the business is of a commercial nature. MADL, which retains its consumer credit licence, has appealed against the OFT's above decision to vary its licence and the refusal to grant its variation licence application.

The third debt management company which has had action taken against it by the regulator is Midlothian-based Deric Hamilton Oliver’s company – his application for a licence was rejected in part because the information he gave the OFT was false. The OFT found that Mr. Hamilton Oliver had provided debt management services even though he was aware he did not have a licence and demonstrated a serious lack of integrity which made him unfit to hold a licence.

David Fisher continued, “Revised debt management guidance, which is due to be published before the end of the year, will give even greater clarity as to the standards that the OFT expects of businesses that it licenses in this sector.”

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Celebrity Dragon paying £25k a day on debt
Wednesday 24th August 2011

Fraudster flogs phantom luxury cars in broadsheets
Wednesday 10th August 2011

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Posted in: Companies,disciplined,Management,regulator,Three

Schofield Speaks: Regulation and respect

Tuesday 11th October 2011

Where would we be without fee-charging Debt Management companies? 

As news broke this week that the number of Debt Management companies surrendering their licences to the OFT increased to 61 I thought back to a quote I heard at the DRF Conference last week.“It’s arguable that if it wasn’t for the fee charging commercial sector then the debt charities would have collapsed under the volume of enquiries several years ago.”Back in 2009 the Citizens Advice Bureau (CAB) announced they were dealing with 9300 new debt problems a day. I think it’s a fair assumption to predict that this number will only have increased since 2009. I travel past my local CAB every morning on the way to work and regularly see queues of people at 8 o’clock in the morning, if the fee-charging sector was to disappear overnight then these queues would get longer and longer and longer.But what would happen if in fact it was the free sector that was to disappear? As a person in need of help with their finances what kind of service could they expect to receive?When the OFT published its Debt Management Guidance, it announced that 129 companies needed to improve their practices; so far 61 have had their licence revoked or relinquished. This leaves many companies who do provide a quality service and who are operating within OFT guidelines.Industry body the Debt Resolution Forum (DRF) has introduced a qualification that is the equivalent to an A level and accredited by EDEXCEL to ensure levels of competence and knowledge of staff increases.All DRF members are inspected by the Insolvency Practitioners Association – an inspection which checks, amongst other things, that Marketing, Terms and Conditions of business, Call scripts and complaints handling are of a satisfactory standard.They will be charged a fee for the service they are provided.What other credible alternatives to the fee charging sector is there?Without any, the fee charging sector is here to stay. Will a fee charging DM company ever provide a high enough standard of service to gain the respect of the free sector?
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Celebrity Dragon paying £25k a day on debt
Wednesday 24th August 2011

Fraudster flogs phantom luxury cars in broadsheets
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Posted in: regulation,respect,Schofield,speaks

Katie Price victim in credit card fraud

£14,000 was fraudulently taken out of glamour model Katie Price’s bank account after an impostor wearing a blond wig and sunglasses managed to convince staff at an HSBC branch that she was the star. 

Katie, 33, only found out about the fraud after three of her credit cards were declined during a shopping trip in Brighton.After complaining to her bank, she learnt that all her cards had been reported as lost or stolen the day before and £14,000 had been taken out of an account.The un-named woman had withdrawn £9,000 on one occasion and a further £2,500 in two other instances. According to the Daily Mirror, police believe that a criminal gang had a member dress up as Katie’s alter-ego Jordan in order to carry out the scam.Lancashire police are currently in possession of CCTV footage which shows a woman wearing a blonde wig and sunglasses attempting to make withdrawals.Katie told the Mirror: “It is just terrifying that this could have been allowed to happen.”

She subsequently had the missing £14,000 refunded.

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Posted in: Credit,fraud,Katie,price,victim

Payday loan borrowing’s quadruple increase

The number of individuals turning to payday loans to keep them afloat until their next pay-cheque has quadrupled over two years, according to the Citizens Advice Bureau.

Payday loans are attractive to some because they are a quick way of gaining short-term credit, however the charity is concerned that is has become too easy to obtain such credit and is calling for tighter regulation.

Peter Tutton, of the Citizens Advice Bureau, told the BBC: “The sort of regulatory regime isn’t working to protect people, so there’s work for the government to do.

“The government needs to look at consumer credit and get really serious about making it more effective. We need better sorts of messages to firms that it’s not acceptable to treat people badly.”

The Consumer Minister Ed Davey said, "In the last government - the Labour government looked at capping interest rate costs of credit three times.

"And the last Labour government rejected it three times because they were concerned that they would push vulnerable consumers into the hands of these illegal money lenders who are really the nasty of the nasty."

He reportedly raised concerns that tougher payday loan measures could result in people turning to illegal loan sharks.

There are fears that it is too easy to get caught in a payday loan spiral, as Steve Perry, who took out 64 loans from 12 different companies over 18 months, leaving him with a debt of £22,000, told the BBC it was the "roll over loan process" that needed to be tackled.

Some companies are charging as much as 4,000 per cent interest rates, which means that, if debts are rolled over, the interest owed can, quite quickly, get out of control.

Mr Perry added: "The repeat loans where people are going back month after month, either paying off in full and borrowing again or paying the interest only on a loan.

"People can do this for up to twelve months, every single month, this is what's really trapping people."

Stephen Skarloff, head of the Finance and Leasing Association, Stephen Sklaroff, spoke to the BBC. He said, "There's a responsibility on the borrower, as well as on the lender, to make sure that all the information is on the table."

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Posted in: borrowings,increase,payday,quadruple

Cameron changes tack on debt speech

The Prime Minister yesterday retreated from his plans to tell the public to pay off their credit card and store card bills after previews of his Conference speech were criticised.

David Cameron dropped calls to pay off debt, after members of the public protested that those in the red simply cannot afford to clear their debts.Mr Cameron originally planned to say: “The only way out of a debt crisis is to deal with your debts. That means households – all of us – paying off the credit card and store card bills.After the protests, the Prime Minister changed his speech to, “The only way out of a debt crisis is to deal with your debts. That’s why households are paying down their credit card and store card bills.”According to Downing Street aides, it was never Mr Cameron’s intention to lecture the public about credit card living, but instead to highlight that the public are already paying down their debts. However, they acknowledged that the original wording was open to misrepresentation. Furthermore, the Institute for Public Policy Research has indicated that the economy would actually shrink if everybody were to pay off their debt too quickly as it would wipe up to 15 per cent off the national income. The Chief Executive of Money Advice Trust, Joanna Elson, also told the Mail Online that the public could find themselves in deeper financial trouble if they attempt to make repayments too quickly. In the Prime Minister’s speech, he did address the public’s concerns, saying: “It is an anxious time. Prices and bills keep going up – petrol, electricity, the weekly shop.

“On the news it’s job losses, cutbacks, closures. You think about tuition fees, house prices, the cost of a deposit, and wonder how our children are going to manage.”

Facebook campaign targets loan sharks
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Former Man Utd star sued by bank
Wednesday 31st August 2011

Schofield Speaks: The summer of discontent
Wednesday 31st August 2011

Celebrity Dragon paying £25k a day on debt
Wednesday 24th August 2011

Fraudster flogs phantom luxury cars in broadsheets
Wednesday 10th August 2011

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Posted in: Cameron,Changes,speech

In Profile with Barry Mitchell of Recro Debt Management Services

We sat down with Barry Mitchell, Proprietor and Senior Consultant of Recro Debt Management Services, to find out what Recro actually stands for and what he thinks is the biggest issue in the debt industry at the moment... read more

Facebook campaign targets loan sharks
Wednesday 7th September 2011

Former Man Utd star sued by bank
Wednesday 31st August 2011

Schofield Speaks: The summer of discontent
Wednesday 31st August 2011

Celebrity Dragon paying £25k a day on debt
Wednesday 24th August 2011

Fraudster flogs phantom luxury cars in broadsheets
Wednesday 10th August 2011

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Posted in: Barry,Management,Mitchell,Profile,Recro,Services