The Creditor Climate for 2012 – time for a change?

by on January 23rd, 2012

Further to the success of his blog on Lloyds, Creditor Liaison Team Leader, Chris Brown, takes a moment to put fingers to keyboard and finally, tell us how it is.

Starting a Debt Management Plan

Photo credit to Pat Pilon

It’s a common experience for many of our debt management clients, that the first few weeks of a plan can be the most difficult. Contact from creditors does not stop overnight and it is during this time that we write to creditors explaining our client/s have chosen to enter into a debt management plan. In order to progress with the plan, we ask creditors for information regarding what is owed to them and then await their replies…and in some cases we can be made to wait for an unreasonably long time while the contact to our client persists.

We understand how stressful this time can be for our clients, so we work as quickly as we can to deal with your creditors and get the process moving; our team are always looking for new ways to make this process as fast as possible but as you’d expect, there are a few obstacles in place to slow us down.

Some creditors are easier to contact than others

Obtaining information from Barclays, for example, can be like trying to get military secrets out of North Korea. We get a standard pre-prepared response which outlines their resolve to shun western conventions such as helpful call centre staff or debt management departments who use email. Instead we are given no other option but to send our correspondence in the post and wait for Barclays to sort, read and reply to our query.

We have hundreds of clients with debts to Barclays but despite this, they are unwilling to re-evaluate their procedures and consider allowing us to call them so that we can move our Debt Management Plans forward as quickly as possible.

Scripted answers to our queries

Another stumbling block for our team is speaking with non UK call centres. Some staff at companies such as Capital One and Blair, Oliver & Scott are trained to only answer certain queries with pre agreed scripts. This can often be like talking to a badly programmed robot whose owner didn’t install the basic logic software correctly. I could go on more about this issue but I suspect many of you reading this will also have experienced similar problems and so share my frustration.

Photo credit to Douglas County History Research Center

Using data protection to slow down the process

We take the protection of our clients’ personal information extremely seriously and expect creditors to do the same. However, recently there have been a couple of creditors who appear to be abusing the Data Protection Act, making obtaining information and setting up payment arrangements as slow as possible. Capital One, for example, reject on a daily basis countless letters of authority (which permit us to speak on our clients behalf) claiming that the signature does not match the one they have on their records.

It’s as if they have somebody with a magnifying glass, who spends their day rejecting our authorities on the basis that the first letter is angled forward 45 degrees rather than the 46 degrees the debtor used on the credit agreement.

We applaud creditors who are moving with the times

Despite these problems, a vast majority of creditors and collectors are now accepting payments by BACS (Bankers’ Automated Clearing Services) which is much quicker than cheques. And a growing number of creditors (Allied International Credit, Moorcroft, Apex and JD Williams but to name but a few) are also now communicating with us by email, eliminating the need to wait for their letters in the post.

Each day our team is trying to communicate with creditors and grow relationships so that we can improve the processes – for you – our clients. We’re finding more logical, time and cost efficient methods of progressing a client’s Debt Management Plan with as little inconvenience and stress to either party.

Have your say

If you have any ideas which you feel creditors could consider to improve the process of Debt Management Plans, then why not have your say here too? Consider your thoughts carefully as we value your feedback and we will use some ideas to put forward to creditors as we develop our relationships with them.

Posted in Creditor Behaviour | 5 Comments »

Blue Monday 2012- the most depressing day of the year?

by on January 12th, 2012

As the date of ‘Blue Monday’ is calculated, we offer you some simple steps you can take to lessen the blues.

The January blues have suddenly become a lot more specific, being at their most vivid on 16th January according to a formula used to calculate the most depressing day of the year. This takes into account the weather, the distance from Christmas, the level of individual debt and failure of New Year’s resolutions; ‘Blue Monday’ is decided.

The outlook becomes even worse when you think about the large gap between most people’s December and January payday, combined with the delivery of active credit card users’ January statements.

The current economic climate means that ‘Blue Monday’ is going to affect more demographics than ever before – youth unemployment over a million, house repossessions forecast to rise again, to name but a few bleak statistics- it could feel that these January pressures are reaching their peak.

The outlook isn’t all doom and gloom though and there are steps you can take to put you on the right track.

Budget

Set an agreed amount to spend at the start of each month. Try to put aside a little bit each month as a contingency plan for any emergencies that may arise.

Plan Ahead

Christmas, birthdays and anniversaries come but once a year yet they still catch people out. Plan ahead for set dates and what specific gifts you have in mind and your monthly budgeting could be much more successful.

Preparation

Buy in bulk in the supermarket but only if it’s a necessity. Use the calculator on your phone to price up whether a bulk buy really is good value for your money. A box of 12 light bulbs for example probably isn’t needed. However, buy one get one free on an everyday item will be worthwhile.

Save

Whilst you spend. If as a habit you use the same supermarket for the majority of your shopping, look into loyalty cards or reward schemes they offer- it could greatly reduce your weekly spend.

If you’ve tried all of the above and you’re still struggling, we can offer specific advice on your debts and offer solutions please give us a call on 0800 019 2095 or complete our call-back form now

Posted in Managing Your Money | No Comments »

Fresh year, fresh start with ClearDebt

by on January 9th, 2012

New year, new start! That’s how you might think many people across the UK have started 2012. But it appears, if you think this, you could be wrong.

According to a poll by First Direct, the biggest financial worries of the year in 2011 were not saving enough and not paying off enough debt – that sounds like a catch 22 to me.

Other worries are quoted as spending too much on a partner, lending or borrowing money from family, or, paying for an expensive holiday.

So whilst we enter the early stages of January 2012, I have to ask, what were your biggest worries in 2011 and where do you think 2012 might lead you?

For some, I hope it will lead to being debt free – to being more financially aware and confident in budgeting more effectively. For others, it might mean sleeping easier at night, carrying out the weekly shop without breaking out in a sweat or even finding the courage to stay away from the shops and cut down on the non essential spending.

We’d love to know your “financial new year’s resolutions” so leave a comment and your ideas could inspire others who might not be feeling so positive about their opportunities for 2012. Alternatively you can share your positive thoughts on the ClearDebt facebook wall or via twitter to @cleardebt and @jax76.

We’re giving away a £25 voucher for the most thoughtful comment submitted so share yours now!

Posted in Managing Your Money | 1 Comment »

Credit where it’s due: Co-operative Bank freezes Christmas overdrafts

by on January 4th, 2012

We often give creditors a hard time for some of the things they do to customers. Rightly so in our view; so it’s only fair that, when we see a bank bending over backwards to help over-indebted customers, that we should be fulsome in our praise. So, take a bow Co-op:

Co-operative Bank current account customers will have interest on agreed overdrafts frozen for three months in order to provide a helping hand to those struggling with post-Christmas debts.

The Co-op, which has 1.5 million current account customers, says someone using a £2,000 agreed overdraft would save £75 in fees in the three-month offer period, while a customer with a debt of £500 could save more than £18.

UK Debt illustated by Co-operative Banking Group

Click to enlarge © Copyright Co-operative Banking Group

Of course Co-op aren’t being entirely altruistic. We are sure they see good marketing sense in this. They are a mutual, after all (owned by their customers) and this initiative will certainly help people believe that they care for the people who have accounts with them. But, this tiny pinch of salt apart, this has to be a helpful thing to do.

It’s important to note this applies to arranged overdrafts only – take an un-arranged overdraft from Co-op and you’ll still be in the doo-doo.

We often recommend Co-op to our customers if they need to change bank accounts (too late to do this? – you could look at our pre-paid card, ClearCash: commercial over!). And we also applaud them because (along with Barclays) they are the only bank to offer a basic current account to undischarged bankrupts.

We wonder if other banks will join Co-op in taking the post-Christmas pressure off?

We asked their trade association British Bankers’ Association via Twitter:


Well, we are going to ask the other banks through their social networking identities and we’ll report any response we get here.

Meanwhile, credit where credit is due. Here is all the coverage we could find of Co-op’s initiative:

We are going to email all our customers who we know have Co-op accounts to draw attention to this good news.

Happy New Year everyone.

Oh, and, if you want to know more about creditors activities we’ve discovered in the past, then take a look at these links:

Posted in Managing Your Money | 4 Comments »

Debt Relief Orders hit the headlines

by on January 3rd, 2012

Last week the Insolvency Service released figures showing that debt relief orders are more prevalent among 25-34 year olds than any other age group.

These figures were released to launch a “Dealing with your debt” campaign by the Insolvency Service which “aims to help the young deal with their debt in the most appropriate and effective way”.
The campaign gained a lot of publicity, being featured on BBC News programmes across the country as well as regional radio stations. BBC used a case study to illustrate the issue, which you can view below:

I’m all for raising awareness about personal debt and the solutions available, but sadly from some of the comments I saw on twitter about this story, people were focusing on the notion that a debt relief order is an “easy” way to write off irresponsible spending, rather than looking at the real reasons why more and more young people are struggling with debt.

Here are some of the comments left on twitter:

I’m no expert on debt relief orders, however I have studied them as part of the training towards my CertDR qualification and one thing which stands out to me is the strict criteria required in order to apply for a one, including:

  • Your total assets must not be more than £300.
  • Your disposable income after deducting all normal living expenses, must not be more than £50 per month.

From my experiences here at ClearDebt, the reason most people find themselves in debt is because of a change in circumstances. They took on credit when they were in a secure position to pay it back, but then a job loss, an illness, a divorce, a pregnancy or some other life-changing event affected their ability to make the repayments.
There are of course some people who are in debt due to poor money management and a “buy now, pay later” attitude, but these are a minority and I don’t believe that any debt solution should be considered an “easy” option.

Posted in Media Coverage | 1 Comment »

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