Debts Reduced Ltd has closed down – what can their clients do next?

posted by in Budgeting

DMP unexpected costs

Don’t despair! We’re here for you.

It seems that the number of failing debt management companies isn’t slowing down anytime soon. We’ve now seen the demise of Swansea-based Debts Reduced Ltd.

Following warnings from the Financial Conduct Authority (FCA) they agreed to pull out of the debt management market. (read ‘my debt management company is no longer trading’ if your debt management provider has closed)

An update on the Debts Reduced Ltd website states that the company are intending to pass on their clients to another debt solution provider, who will contact them soon.

However, if you’re affected by this closure, you should obtain free debt advice through us first.

Who’s the FCA?

Earlier this year Financial Conduct Authority (FCA) took over from the Office of Fair Trading. They ensure that consumer credit companies and advice agencies act fairly and ethically.

Will I get my money back from Debts Reduced Ltd?

Despite Debts Reduced Ltd’s closure, hope remains that former clients may be refunded the money that was paid toward their debts. Debt Reduced Ltd state that they are “in discussions with the FCA about how we should deal with the money you recently gave us to pay creditors and will contact you again when we have more information about this. Your money is safe and in a protected client account.”

For more information, please contact the FCA consumer helpline on 0800 111 6768 (freephone) or 0300 500 8082 (charged at a local rate for mobile phone users), and press ‘2’.

Can I move my DMP to StepChange Debt Charity?

When a person gets in touch with us for free and confidential debt advice, we take an in-depth look at their budget to determine what solution is best for them. So before we would offer you a DMP, we first look at your situation from all angles.

There’s two ways we can do this:

  1. Our online advice tool Debt Remedy can help you put together your own personal action plan. This will take approximately 20 minutes, and is an easy and anonymous way for you to get the debt advice you need.
  2. Our friendly team of debt advisors are also on hand to go through your budget and talk through all available options with you. Visit our contact us page for more information.

If a DMP is most suitable for you, then we’ll happily provide one that’s completely free of charge. It’s possible however that another solution might be a better fit for you. If this is the case, we can guide you through this and help you with your debt-free journey.

Please be aware that other fee-charging companies make phone calls to former customers of closed debt management companies. We strongly advise that you seek free debt advice before you agree to anything a fee-charging company offers you.

Rachel Connor has been with the charity for over 8 years, starting in Helpline before joining the MoneyAware team in 2012. Rach enjoys travelling, video games, watching anime, reading and creative writing in her spare time (currently writing a Young Adult fantasy series). She had a previous life as head writer on Cartoon Network's Ed Edd n Eddy and as a copywriter for LivingSocial. She's also written comics and graphic novels for the animated series Regular Show.

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