Debt management firms fail to pay clients' creditors

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...