Information Your Debt Management Plan Provider Must Provide
When you set up a debt management plan, or DMP, you’ll have the choice to either do it yourself or by using the services of a specialised DMP provider.
If you choose the latter, then there are certain rules laid out by the Financial Conduct Authority (FCA) that the DMP provider must follow when setting up your plan. A key part of these rules is to do with transparency and the information that you have to be provided with while the DMP is arranged.
In this guide:
Before You Sign the Contract
Before you sign on the dotted line and agree to the plan as arranged by the DMP provider, all of the relevant terms and conditions must be made absolutely clear so that you know exactly what you are signing up to.
As well as this general requirement, FCA regulations state that you must be informed of the following (formally and in writing):
The exact nature of the service being provided
The length of the plan, and any relevant dates regarding payments
The cost of, or at least an estimate of the cost of, the service being provided
The nature of the allocation of your monthly payments among your creditors, including how much will be taken by the DMP provider
Any other costs that will be incurred and the dates they’ll have to be paid
Other information that you must receive from your DMP provider, whether before or after you sign the contract, includes:
Exactly which debts are to be included in your debt management plan,
Any repercussions that might result from you failing to pay any priority debts that aren’t included in the DMP, like mortgages and utility bills,
Any penalty action you could face if you ignore any contact from your creditors.
They must also make it clear to you that you creditors are still within their rights to continue to take action, including involving the courts, to recover the debt that you owe.
What They Can’t Say
There are two things that cannot be included in any contract with your debt management plan provider and they are:
An official declaration that you fully understand what the contract requires and that it has been explained to you fully and clearly, and
A clause that states that you are forbidden from dealing with your creditors yourself.
What To Do If You Haven’t Been Fully Informed
Before you sign up with a DMP provider, make sure that you have been given all of the information listed above.
If you’ve already got a contract with a DMP provider and you haven’t been informed of some of the above, or if you feel like you have been otherwise ill-informed, then you may have grounds for a complaint.
The first thing you should do is to contact the provider you have a contract with and request any information that you feel is lacking.
If they still withhold anything, or if you are otherwise still unsatisfied with their level of transparency then you might want to consider cancelling your existing DMP and getting in touch with a different provider.