A report out from the charity the Money Advice Trust has urged Debt Managers to be more transparent about their fees.

Debt Management companies are hired by those in debt to renegotiate the amount they owe and organise an achievable repayment plan. But the report from the charity claims that clients are often not told about the fees they incur until very late in the renegotiation process. The report also says that some Managers don’t make it clear that in addition to a scheme set up charge, monthly fees also have to be included within the clients’ payments.

This seems a little strange to us. If a person appoints a Debt Management company to sort out their financial affairs do they think that the service is free? Most schemes last up to 5 years and do they expect the company to run their scheme for that time for nothing? Clients must expect charges and be told clearly what they are but the client should remember that usually, these charges are included within their single monthly payment. As such they know what they are paying in total.

Having said that, we are supporters of transparency in all financial matters whether it be debt, loans, mortgages, insurance, credit cards etc. People work hard for their money and have a right to know who is charging for what and on what terms.