Starting a Debt Management Company

**Call centre** · 19-05-08

Hi All

We are just looking at servicing some of our leads in house and have a few questions with regards to setting up a Debt Management Company. We are looking at a few systems that will look after the admin side of the business in terms of payments in and out and managing the documents.

What I would like to know is how creditors react to a letter from a DMC to say this client is going to pay X instead of the contractual payment. Are they very hard to deal with or is the process as straight forward as it looks.

Your thoughts on this matter would be appreciated.

**123debtsolutions** · 19-05-08

TIP : Leave it to the professionals and don't get involved. (The best tip ever.)

You don't realise how good you have it.

Lead in , Lead out... That is the best way for it to be. Once you start getting involved in DM you have to worry about overheads/admin staff/creditors/client payments/licencing... It's a whole other mine field.

**mjp3000** · 20-05-08

Yeah, what he said ^^^!!!

My girlfriend works in the industry - not for a practitioner, but for a company in the next level above them in the processing chain; like the dark debt industry overlords (I'm sure Lee may have an idea who I'm talking about)

Anyway, the logistics, volitility, industry standards (or lack thereof).. it's not something I'd ever want to get into. Ever. Business lines are shifting so quickly that what was a cash cow last year is being dropped next year in favour of something else. I'd steer clear.

**DALteam** · 20-05-08

Hello

Debt Advisory Line could run the cases and you would receive a percentage of the management fee. This way you see the monthly income without the administration work. PM me for more details.

Regards,

**Call centre** · 20-05-08

Hi All

I do have options where we could get 80% of the first fee and then a decent split of the ongoing but as a business it does not add value to us. This is the reason we want to go in to it. We are ready to invest in infrastructure and recruit the correct manpower.

I do understand your point Lee and for sure it’s good to be on this side of the fence but I don’t see us as a company selling our leads for ever.

We have a bunch of decent sized companies who are buying all we have in terms on DM, IVA's, Mort and Sec loans leads. I have looked at the end conversions of the DM and IVA's and was astonished at the conversion these companies are having with my leads. This is the reason I would like to take the full process in house. I would still sell my IVA's but deal with the DMs in house giving us long term stability.

Its the one part we are stuck at is dealing with the creditors. I have a few versions of the letter that are sent to the creditors that come with the software to manage the cases.

Just wanted some info on how creditors are to deal with?

**Betterwayds** · 20-05-08

Obviously i dont speak for everyone on here but surely DM companies wouldnt want to give away their "trade secrets" on how to deal with creditors?

**Call centre** · 20-05-08

Agree with what you are saying but I am not forcing anyone to speak. It’s an open forum and I feel that we are here to help each other. Even if it is just vague tips that would be great but if you feel it would be giving too much away then no problem.

**notorious** · 03-06-09

Just wanted some info on how creditors are to deal with?[/QUOTE]

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I work for one of the worlds largest companies and deal with dmc's on a daily basis.. basically i will not accept offers from money dmc organisations. basically customers who say they cant afford paying there contractual monthly payments, we make aware that dmc will set up exactly the same plan as we can set up.. we explain for them to look at the situation from our point of view,, they say they cant afford, but they can afford to pay someone else to pay there creditors for them (then they realise how stupid it was to even go with the dmc for just a normal arrangment) and + the customer can leave the dmc at anytime, no matter what terms and conditions were noted, also the customer has a 'cooling off period', by law they are entitled to a full refund on there first payment, by this time we will be intouch to make customer aware of methods the dmc use to try and lock them in to just basically just make profit...

It wouldnt be the best experience dealing with myself or the large organisation to which i work with and we encourage clients to seek advise from CAB or CCCS or PAYPLAN, a Free debt management service as we fund these services to..

my advise is with out advertising on TV, were most Vulnerable people can be targeted, that you wouldnt have a chance in the market. Because small dmc's experience bully tactics to bail out of the situation.

**Flex-Finance** · 03-06-09

Originally Posted by notorious

Just wanted some info on how creditors are to deal with?

If they contact me (which is very rare) I just contact the customer and sort it out myself. Why should the customer pay a firm to pay me?

Some of the crap the some of the debt management companies come out with is laughable. I was told a couple of months ago that if I didnt agree to the customer paying £2.50 a month on a £400 debt that they could "claim compensation from me up to 10 times the value of the debt" Huh?

**westfinance** · 03-06-09

Hi

First I like to say that I like your anteprenorial spirit. It is good.

There will be lenders that they will speak with your customer on your back.
Because you offer a service to your customer I think that you should charge un up-front fee for every case. I know a company that do this and they do it very well.

What you have to explain to the customer is that you work for them not for the lenders, if they agree something with a lender it may be not good for them.

Making one payment instead of 6 is good for the lender as well, they will get a fair share of the disposable income. If left to the customer an agrement when 5-6 creditors are involved won't last very long. But the dm company is there to make sure that payments are made and it is fair to charge the customer for this service.

Most of the lenders like to deal with the dm companies because they save them monies and help them get more monies from a creditor.

I don't think that is right to not get involved in the IVA altdough you will need a practitioner, you can hire one. It is more monies to be made there.

I do have a couple of dm companies that give me referals for financial advice for their customers. You know when you calculate the disposal amount there are allowances for life insurance and pension. The customer can make use of this. I do help the dm companies which give me refferals in pining down their sale as well explaing how good you are and that you work for them not for the lenders.

Let me know if you are more interested.

Eugen

**attemptatfinance** · 02-01-12

Hi all, I realise this is a little cheeky, but I'll ask anyway. I have been thinking about entering this industry where I would try acquire leads and then pass them on, however I have no idea how to do this. What licence do i need, is their a specific place where I can get leads and also if this area of debt finance is deemed to be profitable, any help suggestions would be of a great help.

Kind Regards.