First Step Finance does have a Minded To Revoke (MTR) notice on its Consumer Credit Licence (610509), but this has been open since December 2010. This doesn’t mean that the business is being shutdown, but it does mean that you should be cautious. They are listed as a member of the Debt Resolution Forum (DRF). In the first instance I would suggest that you contact First Step Finance to put your mind at rest and to determine whether they have had any success in dealing with your creditors through their ‘debt resolution’ business model. Debt Management Today did cover their response to this matter in March 2011: 

http://www.debtmanagementtoday.co.uk/newsstory?id=1143&type=newsfeature&title=debt_resolution_we_are%2C_debt_management_we_are_not_

Unlike a traditional Debt Management Company, who have to provide an estimate of the duration of your Debt Management Plan (DMP) under the OFT Debt Management Guidance, First Step Finance need to provide you with a clear outline of how you will become debt free. This is not readily apparent, as they are using a variety of techniques to negotiate with your creditors. If you have been with them several months then you should be receiving monthly statements and progress reports. The same points will apply to Gregson and Brooke, who operate a similar model to First Step Finance. My initial impression is that you received an unsolicited call from a competitor where the sales agent has acted unprofessionally. This is not the first contact you have had with them and are understandably cautious.  

My feeling is that you need to work with First Step Finance, as switching providers can break the continuity of your debt solution and creditors can change their mind with regard to accepting proposals, including freezing of interest & charges. You should be contributing based upon what you can afford and your creditors need to be made aware of your current circumstances, especially if you are suffering increased financial hardship. 

Should you remain dissatisfied then you should look at either using a free-to-consumer provider that is able to offer you an early appointment or a commercial debt solution provider that operates a recognised code of conduct and is a member of one of the primary trade associations. These are: 

www.demsa.co.uk/members

http://www.debtresolutionforum.org.uk/members.php

If you elect to switch provider then you should look for a provider that does not charge you a new set-up when switching from another debt solution provider.

“Pension release is a specialist area of financial advice and will depend on your age, as the products are primarily designed for those over 55 years of age. If you are using the funds for debt consolidation purposes then you will need to find a financial adviser that is both authorised by the Financial Services Authority in the provision of advice on pension release and licensed by the Office of Fair Trading for debt counselling. The risks of drawing down your pension early need to be fully explained.”

Where you have one or more debts with your bank, where you hold a current account, it is fairly common practice to recommend that you move banks to either a basic bank account or an account like the Secure Trust Bank current account, which will accept people who are on a DMP, IVA or are bankrupt. Most high street banks offer basic bank accounts, though they may want to offer you an account with credit facilities if they are unaware of your circumstances. Many Debt Management Companies offer a bank account through a reputable bank. 

Without knowing the specifics of your case, the answer should be yes. You should, as a minimum, have an annual review every 12 months or 12 months from your last review. The debt manager should send you an updated statement-of-affairs for you to check. This should include updated balances from your creditors. Many Debt Management Companies trigger the first annual review from the time that you actually start your Debt Management Plan (i.e. the Debt Management Company actually starts disbursing money to creditors rather than you paying the set-up fee). You always have the right to request a review, as do your creditors. I would recommend that you request a review and ask why you haven’t had one to-date. Also check that you have been receiving monthly statements detailing the funds disbursed to your creditors to-date.

Let’s deal with the two different matters. If you feel that one of your original credit agreements was unenforceable then you have recourse to challenge it either yourself, through a specialist solicitor or through a claims management company. As a result of the high court case in late 2009, there are now relatively few cases going through successfully. You will be required to maintain payments to your debt management plan whilst you challenge the enforceability of the agreement. I would stress this is not like PPI reclaims (i.e. mis-selling of Payment Protection Insurance). If a claims management company contacted you in the first instance then you should avoid paying an upfront ‘review fee’.

With regard to the credit card debt that is now with Apex, it is normal for debt buyers and the collectors of the lenders to undertake periodic ‘full and final offers’ at a heavily discounted rate. This is not the same as requesting that you settle the balance with a lump sum whilst a debt manager is acting for you, as this would be a breach of the OFT Debt Collection Guidance. A collector should not bypass a licensed debt management company. Ideally, the collector should make the offer to the debt management company and they would negotiate a settlement balance if you potentially have access to funds from a 3^rd party willing to gift you the money (e.g. parents or other family members).

If you do not have access to any additional funds than your disposable income then this should be the basis of your payment through your debt management company. Both Equidebt and Apex should accept the offers proposed based upon industry standard protocols – hopefully your debt management company is using the Common Financial Statement. They should not chase you directly. If you are currently making regular payments to your plan then I would stick with it, but probably request a full review – which is your entitlement under the OFT Debt Management Guidance.