Press three to wipe out your debt...
Just a few days ago I was busy in the kitchen, when the phone rang. Picking it up I was genuinely shocked by the caller’s opening line: “This is a public announcement on behalf of the government.”
Crikey, I thought, what’s all this about - an outbreak of the plague?
The call went something like this: “We have been asked by the government to make you aware that, under legislation, you can have your debts written off. If you have unsecured debts below £15,000 then we can help you clear these in just one year.”
My anticipation soon changed to anger as I realised I had been duped into listening to an automated call. I had just become another victim of one of the 230,137 unsolicited telephone calls made to UK consumers daily by debt management or personal loan companies.
The call ended with the message: “If you want to get rid your debts for good then press three now.”
What would have happened had I followed through? Well I already know, as around eight months ago I experienced a similar call.
On that occasion, I took the opportunity of speaking to someone, intrigued to know how they were going to ‘magic’ my debts away.
This is what happened. I was connected to a smooth talking salesman who actually knew nothing about debt and was just filling out some on-screen boxes about me, such as how much I owed and whether I was a homeowner.
At no time did he mention how much it would cost me to wipe out my debts or what impact this might have on my credit rating.
As there was also no mention of how his wonderful promise would be fulfilled, I asked.
His reply was: “I will need to pass that query onto the firm that will be in contact, they know all about this”.
“Will this affect my credit rating?” I asked tentatively.
“The firm that calls you soon will deal with that,” he replied.
It was obvious this was a lead generator; basically, a firm that gets a whiff of a possible debt job, gathers information about you over the phone and then sells you on as a lead to a debt management firm.
Wanting to know more about how this operation worked, I decided to agree to have someone call me back.
Eight months later and I have received around six calls, always from a different person (and once from an overseas call centre).
On this occasion, the caller asked for my address in order to send me some important information.
“Well, before I do that, can you tell me how you propose to write off my debts?” I asked.
As I receive no answer to this, I repeated in – and the caller, in turn, continued to ask for my address. This went on for several minutes until the caller chided me for being “awkward” and slammed the phone down.
What I learnt from this exercise was that the limited data I gave to the first caller had been bandied around to various call centres and lead generators - and is still being sold on.
I asked several of my friends if they would respond to this type of cold call if they had a debt issue, and was surprised by some of their answers.
The majority said they would consider it mainly because debt is such a taboo subject and they wouldn’t want their family or friends to know that they were seeking help.
If you are having problems repaying your lenders then there are a number of places you can go to for debt advice – click here for a list of free organisations.
Other ports of call can be a reputable debt management firm or a firm of insolvency practitioners – but get a recommendation first rather than take a stab in the phone book or using just any old firm you find on the internet.
You should also read Moneywise's guide on how to hang up on cold-callers for good.
Generally speaking, insolvency is to businesses what bankruptcy is to individuals. A company is insolvent if the value of its assets is less than the amount of its liabilities, or it is unable to pay its liabilities (loan payments) as they fall due. It’s an offence for an insolvent company to keep trading, so the main options available to an insolvent company are: voluntary liquidation, compulsory liquidation, administration or a company voluntary arrangement.