Some fascinating stats in there!

It is interesting and in certain areas quite concerning.

The issues that we sometimes hear about from visitors to this forum can be clearly seen in the responses to some of the questions.

The key overall message, as always, seems to be to take as long as it takes to make sure you are dealing with the right debt advisor and considering the right debt solution.

The Herald has featured the survey results today:

http://www.heraldscotland.com/business/corporate-sme/protected-trust-deed-fears-are-revealed-by-survey-1.1061150

hello

New to the forum from the Herald article today.

Whilst the results are interesting, a lot of it comes down to how a question is worded and some questions haven't been asked in my view.

Take Q1 - "What sources of debt advice and Trust Deed advice have you used?"

In my opinion, this doesn't really demonstrate anything. 75% of people sought advice from a Trust Deed company. Well, we would expect this figure to be high as everyone who signs a Trust Deed must have had advice at some point from a Trust Deed company. I am assuming the other 25% were advised to go bankrupt or something and never saw a Trust Deed company? To me, it might have been more interesting to see who people first approached for advice, or who it was that referred them to a Trust Deed company. I wonder how many people going through a website believed they were dealing with a Trust Deed company but were actually dealing with an unregulated agent hungry for his commission?

On that note, take also, for example, question 12 - "Trust Deed agents prepare Trust Deed cases which they then pass/sell to a Trust Deed company. Do you think such agents should be able to charge the client an upfront fee for this service?" Most people have said No.

I wonder what the response would have been had the other question leading on from that had been asked i.e. "Do you think such agents should be able to charge the Trustee a fee for this service payable out of your contributions?"

There have been previous reports in the press of amounts Trustees pay to have Trust Deeds referred to them and I have been advised by a CAB debt advisor recently that she has heard figures of well over ?ú1,000. For what? Ultimately, no matter how it is dressed, this money is being paid by the person signing the Trust Deed at the expense of creditors.

I am sure that generally the target is not the money advisors / CABS / Trustees who already have regulation and it is the referring agents that now need to be regulated and their client fees and referrer fees from Trustees looked at in comparison with the advice they give and work they actually do.

Just my quick thoughts from a lunch time read of the Herald

Hi Bananaman,

Thank you for your thoughts and comments.

We accept that the survey is not scientific or conclusive and that there are many additional questions that could have been asked, including those that you mention. When we run another survey in the future I'm sure that other questions will be included.

There is no doubt in the view of the site support team that trust deed agents, websites and debt management referrers would all benefit from enhanced regulation. This is very much on the agenda of the OFT at the moment and there will be further significant news on this quite soon.

However if you read around this forum you will find many many examples of people who feel very poorly treated by regulated insolvency companies.
To back this up over a quarter of respondents to the survey felt that their treatement by such regulated companies was "poor" or "extremely bad".
We think that there is very clear evidence, anecdotally in the forum and in these figures, that what we know to be very significant regulation of insolvency practitioners does not always necessarily achieve a perception that "treating customers fairly" is at the top of the priority list for some insolvency companies.

Money advisors and CAB's are often recommended as good sources of advice in the forum on this site. I'm curious about your comment about them being regulated though. Could you clarify what you mean by that? I ask the question with no malice, CAB's and Money advisors very very rarely attract any criticism here from forum visitors (unlike some insolvency companies, debt management companies, debt advice websites, trust deed agents etc).

Some quotes from survey takers (answering the question "Do you have any suggestions to make trust deeds better and fairer?") to back up one of the points in my last post about service levels from some regulated insolvency companies:

"I was with (company name removed) and the communication after my last payment to my Trust Deed was non existent. I was having to chase them up every couple of weeks to finally get my discharge letter, 9 months after my final payment!!"

"... maybe limiting the fees that a IP can charge. I dont think my creditors are getting anything due to the value of fees which were never discussed with me prior to signing the trust deed."

"The Trust Deed company took an age to actually set the deed up (6 months after I had completed all paperwork including the standing order for payments), were extremely poor when it came to communication (verbal and written) and it has taken almost 19 months since my final payment to actually get near to discharge, again through no fault of my own".

"... if the firms were more upfront in the beginning regarding home owners and what entitlement they have to the property before they get you to sign up for a trust deed. Misleading statements of everything is safe - you wont lose your home is not always truthful after you have signed the trust deed".

"Less 'complicated' legal jargon from the Trustee... plain English would be better".

"They should be explained in full and mainly the consequences should be explained. I have been in a trustdeed now for over 6 years and have no way of getting out of it. Disgusting".

Sorry, it could have been better put but the regulation part was only meant to refer to the Trustees ie

money advisors
CABS
Trustees who already have regulation

I have to admit my real gripe is the referrer fees or however the agents and Trustees would like to refer to them. I accept the agents may be undertaking some work that cuts down on the Trustee's time but can it really be ?ú1,000+ worth? How does that compare with the Trustee's fees for three years of work.

An article in the Herald in March suggested "Latest figures show that of the 6,166 deeds signed in 2008/9, trustees ÔÇ£gathered inÔÇØ a total of ?ú61 million, but the practitioners swallowed up ?ú32m of it in fees and expenses"

?ú32m of fees and expenses over 6166 Trust Deeds is an average of ?ú5189. If ?ú1000 of that is the agent's fees and say ?ú500 (I am sure one of the experts can help) is other expenses then the average Trustee fee is around ?ú3,500 suggesting the agent is doing over 20% of the work involved in a Trust Deed. I just can't see it.

I would like to see regulation of Agents to ensure good and relevant advice and a cap on the referral fee they charge to Trustees

I understand where you are coming from Bananaman and I think we all feel the same. People need to be sure they are getting good advice about trust deeds - warts and all!

I also fully agree that any payments to agents doing preparatory work on a trustee's behalf have to be proportionate and justifiable according to the amount of work done by the agent.

In fact there are already procedures in place to regulate this area. All insolvency practitioners are monitored by their professional bodies and asked to provide justification for the level of such fees. I would certainly hope that any abuses of this are brought to light by these monitoring visits and a stop put to it.

At present various stakeholders are also involved in formulating a "trust deed protocol" which should go some way to standardising trust deed processes across different firms and will hopefully further expose anybody straying over acceptable boundaries.