Warning issued over claims management firms

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Consumers may be better off seeking free debt advice than using claims management firms, it has been suggested.

According to myfinances.co.uk, there has been a rapid rise in the number of companies claiming to be able to write off debts and save people from repossession.

However, the website suggests that many of these firms are unscrupulous, talking money from desperate consumers and then either doing very little or providing services which are available for free.

It reports how the Ministry of Justice urges people to think carefully about enlisting the help of such companies, since upfront fees can be very high and the likelihood of success can be low.

Myfinances.co.uk states: "People with debt problems should not see claims management firms as a way out of trouble, and there are other ways to deal with debt. And using more than one avenue is possible."

The site suggests that contacting the Citizens Advice Bureau may be a good starting point for people with financial liabilities.

Last week, Beccy Boden Wilks, spokesperson for the Money Advice Trust, urged consumers to prioritise their debt payments, making sure they do not default on their mortgage.

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Tags: citizens advice bureau , free debt advice , financial liabilities , good starting point , money advice , management firms , claims management , debt payments , rapid rise , ministry of justice , repossession , upfront fees , debt problems , spokesperson , likelihood , debts , consumers , mortgage ,

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2009-10-23 15:01:33 © Moneyextra.com