Episode 4 Rip Off Britain

We asked you to tell us who's left you feeling ripped off.

I think this is very, very, very wrong for what they have done.

The bank piles charges upon charges upon charges.

Legally, it was right.

Morally, that's where the question of doubt comes in my view.

And you contacted us in your thousands, by post, email,

even stopping us in the street.

And the message could not be clearer.

You don't get a straight answer, they're trying to fob you off.

I'm not happy at all.

There's always that small print that's got the clause in that you didn't realise.

We're being ripped off, big time.

Whether it's a deliberate rip off, a simple mistake,

or a catch in the small print, we'll find out why you're out of pocket

AND what you can do about it.

Keep asking the questions, you know, go to the top if you have to.

We get results, that's the interesting thing.

Your stories, your money, this is Rip-Off Britain.

Welcome to Rip-Off Britain, the programme dedicated to helping you make every penny count.

These days, that's more important than ever.

But you've been telling us that some companies don't always make things easy.

Absolutely right. So we're here to make sure that every time you sign on the dotted line,

you know exactly what you've agreed to.

And what, indeed, the circumstances could be if things go wrong, which they do.

Exactly, which is why today we're going to be looking at an issue

on which we've received more correspondence than anything else,

and that's problems with debt and loans.

And in particular, those companies that have sprung up

promising that they can sort everything out.

But as we've learnt, sadly all too often, they just make things worse.

Also coming up on today's programme. Is it too easy to get a loan?

When you hear how many this man was able to take out, you may think, "Yes."

I contacted the company and they started talking

about the default process, how it would affect my credit rating, how I would risk doorstep collectors.

And how we solved some of your problems face to face

at the Rip-Off Britain pop-up shop.

I can be pretty confident that this problem will have dropped off your file,

because these late payments only stay on your file for a limited amount of time.

Here's more of your stories.

Now, it's estimated that as much as 2% of the population regularly

uses what seems to be the quick-fix money solution of a payday loan.

The number of people taking them out has quadrupled in recent years, and they're still on the rise.

So you can see why some people have questioned

whether they're just too easy to get hold of.

A position you may well agree with

after you've heard just how many loans one man was able to get hold of without any bother at all, really.

Sometimes, keeping your cash flow on the right track can be quite a ride,

and it can be incredibly frustrating if you know that although payday will soon arrive,

you need to get your hands on your money right now.

That's the situation Steve Perry found himself in in the summer of 2009.

He needed £200 to stay afloat

and decided that a payday loan was the way forward.

When I took out the first payday loan, I was in full-time employment

at the time and I had no real concerns that there would be

any problems with it.

The interest rate at the time didn't really concern me. It was advertised as something-thousand per cent.

But I just saw it as 30-40 quid on top of what I was borrowing,

and that would be it.

Payday loans do exactly what they say on the tin.

They're meant to be a temporary stopgap for people who have cash flow problems

and want to get hold of some money to see them through until payday.

But after Steve paid his loan back, he was left with a shortfall in cash for the coming month.

So he got another loan, this time for the higher price of £315.

It was so easy the first time round, the account was already set in place

so I felt it'd be just as easy the second time round to borrow again.

But Steve's fortunes were about to change.

He sadly lost a job as a call centre administrator, and was out of work

for three weeks before starting another, which meant he couldn't meet the payday deadline on his loan.

As soon as I realised that there was going to be a problem with finances,

obviously I was concerned straight away.

I contacted the company and they started talking

about the default process, how it would affect my credit rating, how I would risk doorstep collectors,

and after having a history of pretty bad credit, it was like, "Oh, my God, here we go all over again."

It was pretty terrifying.

The loan company agreed to give Steve more time, but because he'd gone over, he'd racked up £75 in interest,

which he couldn't afford to pay. So what Steve did next started him off on a merry-go-round of borrowing,

which was to have devastating consequences.

I made a stupid decision, I took out a second payday loan of £160

with another company in an effort to pay off the first one.

All of a sudden, I found myself with two, totally separate payday loans.

Before long, Steve's financial problems were spiralling out of control.

Struggling to meet the APR, he borrowed more and more.

Over the next 21 months, he took out a staggering 64 loans with 12 different companies.

And although the interest rate on them is low to start with, if you go over payday, it shoots right up.

The whole situation of borrowing every single month was just destroying me,

mentally and physically.

I couldn't go a single day without thinking about it.

It would be the last thing I'd think about before I'd sleep,

it's the first thing I'd think about when I wake up and it pretty much consumed my whole life.

To get a payday loan, all you need is a bank account and to be able to prove that you work.

Unlike a bank loan, no financial checks are done and you can take out as many as you like.

So while Steve was able to borrow a total of almost £15,000,

he doesn't think it should ever have been possible for him to get hold of such a large amount of money.

Since it's all spiralled out of control,

I've always held my hands up to my own share of the blame,

which, admittedly, is obviously quite a large share of the blame.

I am the architect of my own demise.

This was my doing, but having really looked into the whole situation since then,

I have realised that I am not the only one to blame in all of this, there is joint accountability.

The payday lending industry is worth an estimated £1.2 billion and is growing fast.

But last year, it was criticised by the Office Of Fair Trading who gave it a chance to self-regulate

and come up with a code of practice.

But after his experience, Steve Perry thinks the code they've come up with is a disappointment

because it isn't compulsory for lenders to sign up to it.

The Consumer Finance Association, who helped draw up the code with industry

and consumer groups, disagrees. They say payday loans compare favourably

with other forms of lending because they're clear, simple,

have no hidden charges, and out of millions of pounds of transactions,

there are very few complaints. They say their members do undertake

checks to ensure applicants can meet repayments,

and that many, many people are rejected.

And rather than keep on borrowing,

they suggest that anyone who gets into trouble

takes advice from one of the free national debt advisory services.

Well, Steve is now managing his debts via a repayment plan.

But his story really is a cautionary tale of how payday loans can

very quickly spiral out of control. Something many of you have told us

about that you discovered to your cost.

So here with some tips is Matt Hartley

from the Consumer Credit Counselling Service.

Payday loans should only ever be used as a last resort.

Always, always, always read the small print.

Make sure you can repay the loan in full with the interest and on time.

If you don't, the payday loan company will add so-called

roll-over charges to your debt

to extend the loan into the following month.

These high charges, together with the high levels of interest,

very quickly turn a small payday loan into a large one.

Many companies offer loans you can apply for in a matter of minutes,

online or even on your mobile phone.

But that doesn't mean that you should take the decision lightly.

If you find yourself turning to payday loans on a regular basis,

it may be a sign that there is an underlying problem with your finances.

If this is the case,

then the best thing you can do is seek free advice from a debt charity

like the Consumer Credit Counselling Service as early as possible.

Here at Rip-Off Britain, we hear a lot about the mistakes that energy companies make with your bills,

but rarely on the scale of our next story.

Hundreds of small businesses are being hit with crippling bills,

because it turns out that for years, they'd been under-charged.

Now, even though they knew nothing about it, they are now suddenly being told, "Pay up!"

Rick Waters owns a small independent shopping centre in Rye, Sussex, home to around 20 small businesses,

he's been running it for the last 20 years and it's become an established part of the local community.

Local people who want to start their own businesses come here,

pay £80 a week, which includes rent, electricity is on top and water,

but all the other services, rates, rents are included in the £80

which is pretty small, when you're starting up.

The secret to the shopping centre's success is that Rick keeps running costs low.

But in January of 2011, he received a letter from his electricity supplier, EDF Energy,

that threatened all of that.

We received a huge envelope from EDF Energy

which contained a demand for just under £60,000.

Now, the normal monthly bill at the time was about 200, maybe 250.

To make matters worse, the bill, or bills, because there were no less than 192 pages of invoices

going back four years, arrived during Christmas, when the centre was shut!

So I didn't actually pick up the envelope until 7th January

and by that time, we'd received another letter which was a reminder

dated 4th January, saying "You should have paid this by now."

I mean, some of this defies belief.

With no easy way of getting hold of £60,000, Rick feared that he'd have to close the shopping centre.

That, or make himself very unpopular with the tenants.

'You can't go round to the tenants and say, "Right, that's £2,500 each, please."'

Life doesn't work like that.

So why exactly was Rick sent such an enormous bill?

Well, it seems that in January 2007,

EDF made what they call an "administration error"

and started billing the centre for ten times less electricity than they were actually using.

The result - a whopping backdated bill

and no way of paying it back.

On 14th January they sent a threatening letter

saying, "You haven't paid the bill. If it's not paid within five days,

"we're going to come and cut you off, take you to court."

Domestic customers can only be asked to pay bills dating back 12 months,

but Rick is far from being the only person to have discovered a very different situation for businesses.

The Crossing Church And Centre in Worksop is a charity that received a similarly hefty bill

from their gas supplier - British Gas.

Mark Pengelly is the reverend.

Out of the blue one day, our church treasurer received

a new set of bills from British Gas which went back

over the complete four-year period since we'd opened.

The additional amount being asked for, for the back payment over the four years,

was a very alarming £38,000.

Unable to pay the bill, the reverend began negotiations with British Gas,

and even though it was all down to the meter underestimating the church's consumption,

they insisted that he still had to pay for all of the backdated gas that the church had used.

With little choice, Mark agreed to pay an initial £10,000, and then pay the balance off monthly.

But as the church relies on volunteers and donations to keep going,

the affects of this bill have been far-reaching.

Paula Howard is the centre administrator.

It's been quite a shock to the system. If that has to be passed on to our users,

especially community users, it'll have a massive impact

because we won't be able to subsidise their meetings as far as we do now.

That threatens the survival of popular activities such as the Knit And Natter Group.

It would be difficult to find somewhere else that would help us in this way.

Cos the church have been very kind to us, we've never had to move out.

No matter who's fault the error, energy companies can bill businesses for up to six years

of back payments, leaving people like Rick in a very difficult position.

We've reached an agreement with EDF

that we will pay £22,500 over 5 years, which is £375 a month.

We contacted both EDF Energy and British Gas for their comments.

Both apologised for the "inconvenience caused"

and in each case, they're reduced the bill and agreed

an extended repayment plan.

EDF have also switched Rick to a better value tariff.

British Gas point out it wasn't them that installed the church's faulty meter, although the company

that did insists that their annual inspection had flagged up that there may be an issue.

Meanwhile, Reverend Pengelly has had his faith in British Gas severely tested.

In one sense, we don't dispute the fact that that meter may have been reading wrongly

and technically, we have been underpaying.

But we feel that if we've been treated very unjustly

and to say, "Actually, you owe us three times the amount per month

"and you owe us £38,000 as a back payment,"

it's really undermined all of our financial planning of the last five years.

Big companies don't always make things easy to understand,

and it can be confusing trying to work out just why you haven't ended up what you expected.

So, if you feel bogged down,

we've put together a booklet of tips and advice.

You can find a link to the free guide on our website...

Or, to receive a copy in the post,

send an A5 self-addressed envelope to the address that we'll give you at the end of the programme.

Now, an issue that's dominated the Rip-Off postbag this year.

Credit brokers is one of the subjects that you've written to us about in droves.

They're the companies whose ads you can't miss in the back of the papers,

saying they'll help you get a loan if you're in financial trouble.

If you're not working, applying for a loan can be hard.

But Mandy Hayes, a single parent from Mexborough,

didn't want to use her much-needed Incapacity Benefit to buy a new car.

The car that I was wanting to get,

it was only a small car that I wanted,

I were willing to get a loan for around £4,000.

To increase her chances of getting a loan, Mandy decided to apply

to three credit brokers she found online,

all of which seemed to be offering loans quickly and easily.

Yes Loans, UnsecuredLoanCompany.net and Merlin Money.

She registered with the three companies, paying a fee to each.

I paid the fees on the understanding that they would be able to give me a loan,

and if they didn't get me a loan, I could get it refunded back into my bank.

Mandy is looked after by her 12-year-old son Liam

who is her registered carer.

She paid the three credit brokers from their holiday fund.

At nearly £160 in total, that was quite a sum,

but Mandy accepted the charge.

I was happy cos they sounded 100% in getting me a loan,

so therefore I paid it on the understanding that I could get it refunded.

With the fees paid, Mandy could sit back and wait for the credit brokers to do the work for her.

I only got one paper through from Yes Loans, and it was I needed a guarantor,

which I haven't got no guarantor.

I did explain that I am medically retired, unable to work.

So not quite a yes from Yes Loans, but what about the next one - UnsecuredLoanCompany.net?

They was offering me things like a £500 loan, a credit card to build

my credit limit, statement, whatever

and it wasn't what I was asking for.

I wanted a £4,000 loan with monthly payments.

OK, so maybe Merlin money could magic up some cash.

Again, I paid the fee and never get anything back.

Only one e-mail and that was it.

So, Mandy doesn't seem to have had quite the service

she expected or that the credit brokers advertised.

A problem that Sue Edwards at Citizens Advice hears a lot.

We see a lot of complaints, increasing numbers of complaints

about people contacting credit brokers or being contacted

by credit brokers and saying "Would you like a loan, don't worry,

"just give us 50 quid or 70 quid up front

"and we'll find you a loan, no problem."

Obviously, if you're on a very low income, 50 quid

can be an awful lot of money.

People find that they contact these companies,

pay the money and then the loan doesn't materialise.

Mandy quickly gave up on trying to get a loan and decided

she would pay for the car from her disability allowance after all.

So all she had to do now was cancel the £160 worth of application fees

she'd paid to the three credit brokers.

I got on the phone to the companies.

They asked if I'd put it in writing for the cancellation

and said that I would receive the cheques within 30 days.

After 30 days, I still hadn't received my cash.

In a super-complaint sent

to the Office of Fair Trading, Citizens Advice said they'd often

heard of credit brokers stalling on cancelling these contracts

with customers often waiting beyond the 30 days

that the regulations lay down.

So, how quickly did Mandy get her money back?

They came up with excuses.

"Oh, well, the person you need to speak to

"is not in the office today."

Etc.

This is the model that we're having.

But Mandy's persistence paid off in the end.

After numerous phone calls and letters, she eventually got back

all but five pounds of the broker's fee from Yes Loans

although she says it took seven weeks from first asking

until she got it.

Merlin Money also refunded her fee, again minus five pounds,

and it took them around ten weeks to sort.

And finally, Unsecured Loan Company.net took three months

to refund Mandy though they did give her the full amount.

They can take the payment out of your bank account just like that

but yet, we have to wait 30 days

to even think about getting it back anyway.

Yes Loans say they're surprised Mandy's unhappy and at no time,

did they guarantee they'd be able to broker a loan for her.

They also claim they did send her the refund within the required time.

Unsecured Loan Company.net say they're sorry for any

inconvenience and frustration

but that it's more challenging to find applicants a loan if they're

making numerous applications at the same time, like Mandy was,

as this will be detrimental to a credit score.

But Merlin Money say they're shocked

and disappointed to hear of her experience and can understand

why she feels their customer service hasn't met expectations.

They insist the delay with the refund was an exception.

I feel as though they're playing on very, very vulnerable people.

And I most definitely would not do it ever again.

I feel let down.

Still to come on Rip Off Britain, we ask you to tell us

how you feel you've been ripped off and I have to say,

you've inundated us with your stories.

Many of you told us about your problems in person at the Rip-Off Britain pop-up shop.

Plus, what happens if the company that's supposed to be stopping

you going bust, goes bust itself?

I spent many evenings out here at three, four,

five o'clock in the morning with my head in my hands thinking,

"What am I going to do?"

If you already have a loan that you're paying back,

you might have thought that the drop in interest rates would have made things a little easier.

But not only have quite a few lenders been failing

to put their rates down, in some cases, they've actually gone up,

leaving many Rip-off Britain viewers

seriously worried about their future.

This is someone who knows her stuff when it comes to money.

Dr Gaia Garino is a university lecturer in economics.

So when she needed a £48,000 loan for medical treatment,

she was confident that securing it against her home

was the best way forward.

I have a good job, there was equity in my property

and I needed this money cos I had incurred previous serious expenses

so I was absolutely fine with it.

She'd seen adverts for a company called First Plus featuring

Carol Vorderman and though they seemed a good company to go with.

'You could borrow anything from

'£5,000 to £100,000

'at a competitive rate like this.'

Before signing on the dotted line, Dr Garino did her research

to make sure a variable rate loan was right for her needs.

I did read the terms and conditions before signing them, of course.

And I made sure that I understood

and appreciated that the interest rate would be variable.

But what I did understand was that it would go up and down.

That was in 2006 and over the next 14 months,

the loan's interest rate went up five times.

But as this was just prior to the crash of 2008, and therefore,

a period of instability for the banks,

those rises didn't worry Dr Garino too much.

I was fine with this because you would expect any bank

to move in line and those times were times of high interest rates.

So when the bank base-rate fell to an all-time low,

Dr Garino looked forward to seeing her rate do the same.

Being an academic, she's been able to work out what actually happened

and put it into a handy presentation just for Rip-Off Britain.

So this is my First Plus interest rate

starting at 9.4 in October 2006...

The yellow line at the top is the interest rate

Dr Garino was paying.

The dark line is the Bank of England base-rate.

You can see that while the dark one goes down sharply,

her own rate, at the top, does nothing of the kind.

Then we come to 2008 when the base-rate plummets

and my interest rate here stays the same.

With her First Plus interest rate remaking high,

Dr Garino is now baffled about how variable rate loans actually work.

Second charge loans should really work like a mortgage like advertised

by First Plus so the rate should really go up and down like a tracker.

I accept the interest rate should be higher

because there's more risk for the lender,

but, other than that, it should go up and down, not only up.

# The only way is up. #

And surely, this is what the word "variable" means.

The Oxford English Dictionary defines it as...

That doesn't seem to suggest that the change should just be in one,

upwards direction.

But financial services specialist, Adam Samuel,

says that when it comes to interest rates or loans,

"variable" doesn't mean quite what you think it does.

It's not at all surprising that people are confused partly

because the word "variable rate" doesn't mean anything.

It just means, "We, the lender, can choose the rate of interest

"we're going to charge you on the loan you've taken out with us."

First Plus chose to set their rates up to ten times higher

than the base rate.

So when lenders do that, are they being greedy or is it

because in tough times, they've got problems of their own?

They've got big levels of loan delinquency.

That's lots of people not making their loan payments on time, or at all.

They've got big payment protection insurance for mis-selling compensation to pay

and they have no great incentive to bring the loan rate down,

and every incentive to try and make some money from keeping their rate reasonably high.

First Plus say changes to customers' interest rates were made

in a completely transparent way

and only took place where pricing needed to reflect a change in costs.

Dr Garino knows First Plus are within their rights to apply

the clause in the terms and conditions which says the rate

can go up as well as down but it's left her

and many other customers with real fears for their financial future.

The lender can apply the clause in a one-sided way so I am very

concerned because it means that we are basically there to be milked

for as much cash as we can give out

in order to keep the business afloat.

The experience of Dr Garino

and everyone else in the same boat shows what a minefield taking out

a loan can be so if that's something you've ever considered,

here's personal finance expert Ed Bowsher with some advice

on what to watch out for.

If you're thinking of taking out a secured loan,

please consider the alternatives first.

You can transfer your debt to a 0% credit card

and then pay off your debt without paying any interest at all.

Another option is to remortgage or do a top-up to your current

mortgage and then you'll probably be paying a lower interest rate

than a secured loan.

The alternatives to secured loans all have their plusses but sadly,

not everyone will be able to get one of those alternatives.

If you take out a secured loan, the first thing to do is

to make sure you're going with a reputable lender.

I think do an internet search

and just check they don't have a history of dodgy lending.

Think about the length of the loan.

If the loan is over a long period, say ten years,

your monthly repayments will be relatively low and that's attractive.

But, of course, over a longer period,

you'll end up paying more interest.

You may also be offered a cashback loan.

Now, that means that when you come to the end of your secured loan,

you may get some of the interest you paid back.

Now, that sounds great in theory,

but there are normally lots of catches to a cashback deal.

If you miss one monthly repayment

or you try and pay the loan off early, the cashback will end.

So I think you're much better off going for a straight simple loan

and not just for a cashback special deal.

We're back at our Rip-Off Britain pop-up consumer advice shop,

and it's a first for the series.

Julia, this is your first face-to-face experience of Rip-Off Britain.

What have you thought of it?

Well, I've been absolutely amazed.

First of all, I'm staggered by the level of public response.

Obviously, there's the experts.

I think that's incredibly impressive the way they really focus

on the people and the people go away feeling comforted from this.

I suppose the other thing I come away with is the real

feeling of upset that bring them here in the first place.

They've been battering their head against brick walls,

been fobbed off and so on, and then they come here

and they find someone who actually knows, who says "No, you're not mad,

"you have got a case, do this, do that and moreover,

"come back to me if you don't get any satisfaction and keep going."

I think it's absolutely brilliant.

One person who felt he'd come to the end of the road was Ron.

Thankfully, financial expert

Sarah Pennells was on hand to hear his story.

Ronald, you've been with Sarah quite a long time,

you have a mountain of paperwork. What was your problem?

The problem was I tried to transfer my account from one bank

to another and it took for ages, there were mistakes made

and it never actually got transferred.

And so what happened because the money wasn't transferred?

Because the money wasn't transferred,

they actually transferred the direct debits and started to pay them.

-With no money in the bank?

-With no money in the account.

-So what has this done to your credit rating?

-It destroyed it completely.

So what have you been able to do?

What sort of help have you been able to give?

Well, I can understand why Ron's been so frustrated because it's something

that should have been so simple and it just went completely wrong.

What we have been able to find out is that there was a reason why

he wasn't able to open a bank account or get credit cards afterwards

because the payments that went from his empty account

essentially are showing up on his credit file as being late payments.

It's a disputed amount. But this is two years ago,

and looking at his credit file,

I think I can be pretty confident that this problem will have

dropped off your file because these late payments only stay on

your file for a limited amount of time.

I also think that it might be worth him putting what's called a notice of correction.

This is basically a short, 200 word statement that explains why

you dispute the fact that the credit rating company says you owe them money.

Now, by law, a lender has to read this information before

it reads the rest of your file and it, at least, puts it into context

because looking at your file from 2009,

if a lender was to look at that, all they would see is that you were

five months, four months, three months late with payments.

Now, we know it's money that you didn't owe but they wouldn't know that.

But I think enough time has passed.

so I think you should get your credit file first of all,

apply for that joint account that you said you want with your son

and apply for a credit card.

Don't do it all in the same day cos they might think there's something funny going on!

The help I've got today has been really good.

Particularly the credit rating.

I've got information now that I didn't know existed

so I may be able to sort that out.

So, another satisfied customer.

375,000 people in the UK are currently on repayment plans

with debt management companies but where does it leave you

and your debts if the company keeping you from going bankrupt...goes bust?

A series of misfortunes left Mike Jones from south Wales with rapidly increasing debts.

He had a car accident that left him unable to work for a while,

then a lengthy child custody battle with his ex-partner.

Eventually, he owed £39,000.

We didn't squander money by any way, shape or form,

but when it got to nearly £40,000

and the repayments started getting higher than what you were earning,

which meant you started getting late fees or you get overcredit fees

and then it started to spiral down and get bigger and bigger and bigger,

you just had to stick your hand up and say "Stop, we need to find a way of doing this."

A father again with his new partner,

Mike was reluctant to declare himself bankrupt.

So in 2003, after seeing an ad in a newspaper, he signed up with

a debt consolidation company called Apex DCM.

For one payment each month, the company promised to negotiate with

Mike's creditors and sort out all his payments, minus their admin fee.

It sounded like the perfect option or as the company said...

"The light at the end of the tunnel."

It's like someone sticking a ladder down a hole and saying "Come on out."

We can take all that pressure away, we can deal with your creditors.

All you have to do is if you get any mail from your creditors,

stick it in an envelope, post it to us, we will deal with it.

It takes that huge weight off your shoulders and passes it to them.

Mike paid Apex DCM £450 a month

and was told he'd be debt-free in six years.

So, by late 2010, having paid £34,000,

Mike expected his £39,000 would be nearly paid off.

He called the company to check his balance.

And she said "Well, you owe £36,000." And that's a big shock.

Of the £34,000 Mike had paid the company,

only £4,000 had been passed on to his creditors.

Which instantly begs the question, "Where did the rest go?"

When you start putting it together,

you start getting the flavour of "Hang on, we've got a problem."

But that wasn't the end of it.

Apex DCM, the debt management company set up

to steer people away from bankruptcy,

went bankrupt themselves leaving all of their clients, including Mike,

to pick up the pieces.

I spend many evenings out here

at three, four, five o'clock in the morning

with my hand in my hands thinking "What am I going to do?"

Forensic accountant Geoff Mesher has looked at the administrators' report into Apex DCM's accounts.

I understand that at the point of administration,

DCM were managing in the region of £31 million worth of client debt.

But only a very small proportion,

somewhere in the region of £1 million,

had actually been paid across to settle debts.

And we see Mr Jones' case as a microcosm of that if you like,

where large amounts have been paid across DCM

but DCM hadn't passed that over to the client's creditors.

As Apex DCM is now in administration,

we tried to contact its former directors. None of them wish to comment.

Seeing no other option, Mike has now declared himself bankrupt.

He's been made redundant and has an autistic child to care for.

Apex DCM had sold themselves as being the light at the end of the tunnel,

but, for Mike, and hundreds of other customers

that they have left in a similar situation, it made things worse.

The stress of dealing with the creditors is gone,

but it's the stress of, I suppose, being fleeced for £30,000,

which is still there.

All over the country, people are feeling the effects

of the difficult financial climate,

which means that, sadly, as we have seen,

more and more of them are struggling with debt.

For many, the situation is absolutely desperate,

which leaves them vulnerable

to the practices of debt management companies.

Something that the Office of Fair Trading

is quite determined to stamp out.

Nigel, the Citizens Advice Bureaux have launched

a super complaint about debt management and in fact,

your department have done your own investigation.

What are the worst things you have discovered?

For debt management,

the main concerns are about the poor quality of advice, biased advice,

companies giving advice that is really only in their interest,

they're advising, no matter what the problem is that the consumers are in,

that this is the product for you, and that is the product that they offer.

And also, for the fees, and the amounts of money

people have to pay to get into a debt management plan.

You are clearly aware that there are major problems.

What authority does the OFT have to do anything about those problems?

We issue detailed guidance for the sector, setting out the standards

that companies should adhere to if they want to continue to operate.

If they don't meet those standards,

if they rip people off, if they're not transparent,

if they have unfair business practices,

we can impose restrictions on their licence or take it away.

Let's talk about some of the things that came up in your report.

Cold calling, first of all.

What is your advice on cold calling not just for the consumer,

but in terms of the regulations that you set out for companies?

We would advise people not to respond to that at all.

-Never take a cold call?

-Never act on those.

There are legitimate areas where cold calling can happen,

but those types of things, if you are in debt,

your best bet is to go to someone that you know you can trust.

Aggressive advertising and sales techniques.

People are put under a lot of pressure

to sign on the dotted line. What is your guidance, there?

Do your own research into which credit companies you go to,

which debt management company to go to.

Definitely go to the charities first.

Don't give out bank account details.

Lots of these companies, they're not going to be up-front,

saying we're going to take money from your account as an up-front fee.

Some will say we need your bank account as a security check,

and to check you are who you say you are,

and then before you know it, you have had money leaving your account.

So, be incredibly careful with your personal and financial details.

So is any company asking for an upfront fee

breaking your code of practice?

Should they not be doing that?

We can't ban upfront fees. That is one of the issues.

That would take a statutory change to the law, basically.

Would you like the government to be able to do that?

It's something that definitely needs to be looked into,

for certain products. In the outcome up to the super-complaint.

What are the criteria by which we should judge a company we can trust,

as opposed to one that is likely to rip us off?

Look on the OFT website, look at Lenders Compared,

to check the different cost of credit.

Look at the cost of credit.

I think one of the problems, particularly, on the internet,

is that many of the companies, you go to their website,

and it looks like they are a lender, they're not,

they're someone that will take your financial details and sell them to other companies,

then you're going to get cold calls from all those other companies.

If you're in debt, speak to your creditors first,

and if you're really in serious difficulties,

go to a charity. Go to the Money Advice Service, Citizens Advice,

or the Consumers Credit Counselling Service.

If you can afford, and it's right to go to a commercial debt management provider,

go to a member of the trade association.

So they've got OFT approval, which doesn't guarantee standards,

but does mean you'll get redress, and get proper complaints handling,

and you're going to a business at the reputable end of the market.

Nigel, thank you.

Here at Rip-off Britain,

we're always ready to investigate more of your stories.

Confused over your bills?

Wading through never ending small print that leaves you confused?

I might have been stupid for not reading, or I've read it and not took it in.

I could kick myself. I really could.

Unsure what to do when you discover you've lost out,

and that "great deal" has ended up costing you money?

I thought, this cannot be true, it's totally unacceptable.

I was so angry.

You might have a cautionary tale of your own

and would be happy to share the mistakes you've made with us,

so that others don't do the same.

No-one knows about this, so this is very, very strange to me.

I really would like to get this clearer.

You can write to us at:

Or send us an e-mail, to:

The Rip-Off team is ready to investigate your stories.

It's very clear from some of the stories we've heard today

that no-one likes to be caught out by all those unexpected charges,

and the worst thing probably is not knowing where your money is going.

So, remember, never be afraid to ask questions. Always do your research.

If everyone is after your hard-earned money, let's face it, you've got to protect it.

You certainly do, and you can never do too much research and background checking,

when it comes to handing over any of your cash.

And that's because, nine times out of 10, you'll probably discover

that there's a better deal available somewhere else.

Well, thanks for watching today, and do join us next time,

when we will be looking at more of your stories and seeing

if we can help resolve your problems.

So, until then, see you soon, and from all of us, goodbye.

Thanks for your company. Bye-bye.

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