Research by Debt Resolution company, ClearDebt shows that average debt repayment time for remaining Apex DCM Solutions clients was more than 20 years
ClearDebt investigated a sample of 1,036 DCM Money clients. Results provide a unique insight into the dubious business of DCM Money – a company run by bankrupts (for consumers in debt) that went into insolvency on 2 March 2011.
The sample showed clients of DCM Money trading as Apex owed their unsecured creditors a total of £31,897,427 yet the balances for debtors had only reduced by £972,348, amounting to a 3% reduction of its clients’ initial balances across the board.
ClearDebt’s analysis attests that 57 per cent of DCM Money’s clients’ debt had either increased, or stayed the same. 18 percent of clients’ debts had increased. The balances that had risen had gone up by, on average, 12 percent and the balances that had fallen had gone down by just over six per cent. Further indicators of how DCM Money, went into insolvency.
Research showed that the average DCM Money client would take more than 20 years to repay their debt and the company failed to distribute around £75,000 per month for clients, breaking OFT guidelines.
Andrew Smith, director of marketing and external affairs for ClearDebt, commented: “When clients first go into a fee-charging debt management plan it is likely that – for a few months – the total debts will continue to rise. However, over an entire book of debts, sometimes including plans that have been going for years, we would expect to see a significant majority of the individual debts would have decreased in value,. This has not been the case with the DCM clients whose data we have seen.”
David Mond, CEO of ClearDebt commented: “What seems quite telling is the time it looks likely it would take Apex DCM to repay their clients debts. The average Apex DCM client, assuming all interest and charges were frozen would see their debts repaid in just over 20 years. It can’t be certain what effect, if any, negotiating full and final settlements would have had on this.”
ClearDebt is advising Apex DCM clients on all their options and is providing them with the last data relating to their cases held by Apex DCM. ClearDebt is also offering previous clients of Apex DCM two different options, Individual Voluntary Arrangements (IVAs), which appear to be feasible for around a third of that group and which would enable them to become debt-free within five years and a completely free debt management plan which, on average should make clients debt-free after just over 11 years.
Andrew Smith concluded: “We know that some clients had been paying into their plan for years and others had run for only months – so it’s very difficult to make more than very general conclusions – the administrators have a duty to report on the conduct of directors in any insolvency case: We think they will find plenty to say in the case of DCM Money.”
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Notes to editors:
Andrew Smith is available for comment and Interview:
Andrew Smith, ClearDebt Director of Communications and External Affairs, will be available to comment.
Andrew is the spokesman for Debt Resolution Forum and has spent more than 25 years in professional services marketing – half of that specialising in insolvency and debt, and played a major role in raising the profile of the insolvency profession and it’s regulatory and representative bodies. Andrew is a member of the Chartered Institute of Public Relations and also has diplomas from the Chartered Institute of Marketing and the Communications, Advertising and Marketing Foundation.
About the data:
The data sample used relates to 1,036 customers who either had a current DMP with Apex DCM or who had stopped paying into their plan sometime prior to the company going under, however around 500 clients did complete their plan with Apex DCM. Some clients had been paying into plans for several years whilst others for just a few months’ hence only general conclusions can be drawn.
Apex DCM customers should note that ClearDebt Group plc, or any of our member companies, agents or representatives have had absolutely nothing to do with the prior conduct of any plan held with Apex DCM prior to 2 March 2011 and cannot advise you on any matters that took place before this date. Nor can we advise on any matters arising from the current administration of Apex DCM, however clients should note that any payments made since 3 March 2011 should be recoverable from the joint administrators, who are currently formulating proposals which will be sent to clients in due course. The administrators will not be making any payments to the creditors of debtors in Apex DCM debt management plans.