Debt charities turn away debt-stressed consumers

February 2010

The National Audit Office has released a report that indicates that some debt advice charities are struggling to cope with consumer demand for help.

At least two debt agencies are reported to be refusing to take on new clients and others have waiting lists of up to 6 weeks for a face to face appointment.

Leading debt solutions provider, EuroDebt, believes this highlights a major issue for consumers struggling with their finances.

"The charity sector does an excellent job in supporting individuals facing financial difficulties, but the reality is that there just isn't the resource for them to help everyone", said Kevin Still, Director, EuroDebt. "Added to which, the model used by the charities is well proven to have less acceptance from creditors. The voluntary organisations focus on a self-help approach to debt management. These keep the onus with the individual on managing the relationships with their creditors and, unfortunately, this often means that they are less successful in getting interest frozen on outstanding debts or stopping debt recovery activity.

"We firmly believe that there is a place for both types of debt advice organisation. It is not uncommon for EuroDebt to refer people with very low disposable income to their local CAB. But the primary goal of EuroDebt is to act fast to help consumers take a responsible position with their creditors, especially where they have multiple credit cards and loans, by notifying the unsecured lenders that they have entered a Debt Management Plan."

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