Debt management firms fail to pay clients' creditors

clock •

Some debt management firms have failed to pay clients' creditors, instead keeping their money.

The Office of Fair Trading said the practice as "totally unacceptable" and vowed to stamp it out, after a BBC investigation revealed the extent of the malpractice. The private debt management industry serves 375,000 clients and makes £250m in fees per year. Andrew Smith, a manager at ClearDebt, said as many as 10,000 people could be at risk from the rogue firms. Clients who believe debt management firms have arranged alternative loan repayments with their creditors have discovered the firms are actually keeping their money, leaving their debt to snowball. The practice of holding...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Your profession

Feel Good Friday: Personal Finance Awards winners named

Feel Good Friday: Personal Finance Awards winners named

Awards ceremony took place yesterday

Professional Adviser
clock 23 October 2026 • 1 min read
What do younger clients really want from their adviser?

What do younger clients really want from their adviser?

'They're going to need all the help they can get'

Justin Cash
clock 21 October 2026 • 5 min read
CII and PFS celebrate more than 300 chartered graduates

CII and PFS celebrate more than 300 chartered graduates

347 graduate from CII and PFS

Sophia Panayi
clock 21 October 2026 • 2 min read