A BBC investigation has found that some debt management companies have been holding on to clients’ cash rather than paying it to creditors, The practice has left many debtors thousands of pounds worse off and facing financial ruin.

If a firm goes out of business and client funds have not been kept in a protected account, some or all of the money is likely to be lost and the debtor becomes liable for the shortfall.

The Office of Fair Trading (OFT) has condemned the practice as “totally unacceptable” and has promised a crackdown.

Repossession order

One couple mentioned in the report had to put their house on the market and could face repossession, after responding to a cold-call from a debt management company and taking out a Debt Management Plan or DMP.

That company, Global Debt Solutions, based in Bolton, offered to arrange a repayment plan for £40,000 of credit card debt and loans. However, after having made payments to Global Debt Solutions for several months, the couple found the money was not being handed over to creditors.

Those creditors have successfully taken the couple to court, so they now have County Court Judgements against them. They’ll also have to go to court on their mortgage, so their debt problems have got far worse instead of being solved. It could soon be at a point where they’ll lose their home.

A widespread practice?

Global Debt Solutions, later known as 3 Step Finance, has been shut down by the Insolvency Service, which found that it did not monitor payments properly.

However, it has emerged that other companies have adopted the same tactic of accepting money from people in debt and not passing it on to creditors.

OFT action

A debtor taking out a DMP with a company using this tactic runs a real risk that the company might fail while the funds are in its account.

David Fisher from the Office of Fair Trading is promising action. “We regard the practice as unacceptable,” he warns. “Where we have evidence we will remove a company’s consumer credit licence, which means it cannot operate.

“We will also next month (i.e. June 2011) be issuing stronger rules for the entire sector, which explain what we expect of them.”

That is welcome news but sadly it is already too late for those debtors who are already dealing, or will soon be dealing, with a repossession order for their home.

Conclusion: take impartial advice

I conclude by saying what I always say: before making any important financial decision – including taking out a Debt Management Plan with a commercial company – take advantage of the free and impartial debt advice which is available these days. I stress the word “impartial”, because some advice is advertised as free but is not impartial, i.e. the organisation has a commercial motive for advising a certain course of action.

The advice you’ll get from the three major national charities working in this field – Citizens Advice, National Debtline and Consumer Credit Counselling Services – is indeed both free and impartial.

There are also many similar (i.e. “not-for-profit”) organisations that operate at a local level but check out carefully that they indeed “not-for-profit” before taking their advice. You can also refer to the Resources section of my book “Back to the Black: how to become debt-free and stay that way”; there you’ll find contact details for about 50 advice organisations.



The full BBC story is at:

My book “Back to the Black: how to become debt-free and stay that way”, is available on the following retail sites:

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Smashwords store for other e-formats, including .pdf:



Jamie Oliver’s latest initiative, “Dream School”, sounds interesting, though I admit I haven’t seen any of the programmes yet. His personality, energy and high profile have ensured the involvement of all those “experts”: people with not only exceptional levels of knowledge but also the time to give the 1:1 attention that many “troubled” children inevitably lack at school.

Teenage nightmare rehabilitated?

A couple of days ago, I tweeted about an interview with former “problem pupil” Angelique Knight on Radio 4’s You and Yours. “Dream School rules”, was my conclusion. The findings were unsurprising to me but encouraging. Unless she was no more than an accomplished actor, Angelique had changed in a short time from a teenage nightmare to a motivated young person who now wants to go to university.

“So what?” you might say. Is this just a neat way to get TV ratings? A country mile from what can be achieved in a practical sense? Resource constraints will never allow this kind of thing, or anything like it? As the saying goes, “You might think that; I couldn’t possibly comment” although I do admit to being pretty impressed when I heard that interview with Angelique Knight.

Real-world school on show

I was even more impressed recently when I saw one small snapshot of what a difference good leadership can make in schools. I was staying overnight at a hall of residence at the London School of Economics (LSE, to us Brits) and when I went down to breakfast the dining hall was half-full of schoolchildren on a study trip; it was university vacation time, so they, and I, were taking advantage of the good-value accommodation such halls offer.

These kids were of primary school age; animated, not Ritalin-sedated, but so well-behaved that I admit to thinking (please forgive my former prejudices) that they must be from a fee-paying school. It’s a well-known fact that discipline is an issue / challenge (we don’t say problem anymore, do we?) in many British state-sector schools, even at primary level.

But not all schools. Suddenly I heard an adult voice raised, in a quietly authoritative tone: “Sit down! How dare you embarrass the school by your behaviour!” Silence reigned again. We random adults looked at each other and smiled; this took many of us back to our own schooldays.

Primary school rules

I went over to a table occupied by half a dozen teachers and congratulated them on the kids’ behaviour. One said: “well, these are pretty tired kids.” That’s when I found they were from a state-sector primary: Southill Primary School in Weymouth, Dorset, and I talked briefly to the Deputy Head, the man who had laid (or is it lain?) down the law.

After the kids had left (in an orderly fashion) I noticed the same guy going round and thanking all the dining-hall and kitchen staff. That impressed me too, as it seemed to be consistent: show respect to kids and to adults alike and with luck you get it back.

As I said before, it was only a snapshot; but it showed what can be done, even without Channel 4’s budget and the presence of TV cameras. I don’t know anything about the academic results of Southill Primary School but I’ll bet they are pretty good.

Ideal vs. real

In conclusion: hats off to Southill. It’s inspiring to find out what could be done in an ideal world, through projects like Dream School. It’s even better to see people who seem to be doing it in the real world.

Want to know more?

Southill Primary School:

Jamie Oliver’s “Dream School”:


Please indulge me, dear reader, if I take a short canter on one of my favourite hobby-horses. We all know that the thing that best sells newspapers (after sex) is bad news. I once listened to a media consultant speaking at a conference here in Bristol, saying: “News is what somebody, somewhere, doesn’t want you to know. Everything else is advertising.”

OK, so newspapers have to be bought or the publisher will go bust. (alongside “bought”, you can now include subscribing to a website pay-wall, in the case of the Times group of papers). If we complain, as I often do, about the relentless sensationalism of which our media is so fond, the remedy is in our own hands: don’t buy that particular paper.

What really gets my goat (Why “goat”? Answers please!) is when the same policy is adopted by the BBC, which, the last time I checked, is funded by licence fees.

The thing that got me going was just a snippet and I am not even 100% sure of the motivation of the presenter in this case … but I can make an educated guess. The subject was, I think, the London Olympics.

Presenter: “what do you think of these recent rule changes?”

Interviewee: “I am sure that the people who are responsible for those rules have made the changes for a good reason, so it’s up to us to get on with it.”

Presenter: “That’s a very diplomatic answer.”

(Presenter’s thought-bubble: “Rats! No controversy? Very disappointing answer.”)

OK, the presenter’s actual response to the answer was spoken softly, in the very polite voice that particular presenter always uses for her most penetrating questions. I could be adding two and two and making 57 … but I doubt it.


“Broadcasting House” is one of my favourite radio programmes and I always make time for it. (0900 every Sunday on BBC Radio 4, if you haven’t got into it yet)

Time was a central theme in one of the first items last Sunday, 13 Feb. A character’s obsession with “the quickening pace of time”, as he grows older, is the central theme of a stop-motion film “The Eagleman Stag”, a 9-minute short nominated for a BAFTA in the “short animation” category. The film’s director Mikey Please was interviewed; the BBC website tells me that he is a freelance animator who graduated from the Royal College of Art last year [only last year and winning a BAFTA? Impressive!]. He has directed several music videos and title sequences as well as making his own short films.

By the way, through watching the award ceremony later that day I now know that Mikey’s film won the BAFTA. Do the people at the BBC know something that we don’t know? Was his selection as an interviewee a lucky or a smart choice? Or did the editors at “Broadcasting House” have a time machine?

Alvin Toffler

The quickening pace of time as one gets older is, of course, not a new theme. I remember reading Future Shock and The Third Wave, Alvin Toffler’s remarkable books of 1973 and1981 respectively. Toffler was very interesting on this phenomenon. He suggested that one solution was for retirees to live in enclaves where clocks ran slower. He was totally serious, of course. Although I haven’t retired, I qualify, age-wise; I want to move there now.

An anecdotal, non-scientific illustration of the time-speeding-up phenomenon came from the late Tony Curtis, when interviewed in his 80s.

Interviewer: “Could you give us a thumb-nail sketch of your movie career?”

Curtis: “Well, I arrived in Hollywood as a very young man with very little money. So I checked in to the cheapest motel I could find. I had a shower and put on a clean shirt; then I came down here to meet you.”

Which proves the point rather neatly.

Stop-motion and “The Wind in the Willows”

Back to that interview about animated film “The Eagleman Stag”. Paddy O’Connell, the host of Broadcasting House, said: “from Wallis and Gromit onwards, the UK has a hold on stop-motion”.

I love Wallis and Gromit to bits (and I live in Bristol, where Aardman Animations is based), but I really must dispute the idea that the UK’s hold on stop-motion started with them. Paddy is maybe too young to remember, or he didn’t have young children in the 80s, as I did, but in 1983 there was a wonderful feature film version of “the Wind in the Willows”, followed by more than one TV series. They were produced by Cosgrove Hall and voiced by wonderful British character actors such as David Jason and Michael Hordern. Both the feature film and the TV series were, according to good old Wikipedia, “sometimes misidentified as being filmed in claymation, which is incorrect. The method used by Cosgrove Hall is a stop-motion animation process using scale model sets and pose-able character figurines.”

Best version

A review of the 1983 feature, on Amazon, says: “Before it became a Wallace-and-Gromit ghetto, model animation was pioneered by Cosgrove Hall – and this is arguably their magnum opus. Beautifully produced, lovingly detailed, with a great vocal cast and classy score, it has the nerve to stick closely to the book. As a result it is the best screen version by miles and, in my opinion, likely to remain so.” To which I can only say “hear, hear!”


Do “ugly fonts” help us remember what we read? Is the everlasting trend towards making information more “readable”, and in general easier to digest, counter-productive? There was an interesting piece on Radio 4’s “Today” programme this morning, together with a very short and unscientific test of the theory: from three short pieces on three different subjects, all the presenter could remember about the text she’d been shown in Arial was that it was in Arial.

I said the test was “unscientific”, not just because it was so short (they probably had to leave enough time for yet another weather forecast) but also because I strongly believe that interest is the key to memory. If she’d been shown three pieces of text in three different fonts, but all on the same subject, then we would have removed a very significant variable.

If this theory is true (and it seems logical that making our brain work harder will aid recall), then my wonderful Kindle is too easy to read! Maybe it needs more font options. It currently has the choice of a “regular” typeface, also “condensed” and sans-serif.

I was somewhat surprised when I found that the Kindle’s “regular” typeface was a serif font; I’d always heard that sans-serif was better for reading onscreen, serif for print. Maybe the point is that the Kindle is designed to be as close as possible to the experience of reading from the printed page.



A recent news item (Channel 4 News, I think) flagged up a potentially alarming problem that’s been caused by the recession. (Yes, that’ll be the recession that the experts say is now officially over. Try telling that to someone who has lost their job.)


What’s the problem? According to a report by the charity Shelter, there’s been a large increase – possibly 50% in a year – in the number of people using credit cards to pay their mortgage or rent.


Does this affect owner-occupiers? Or tenants? Or both?


According to the BBC website, the Council of Mortgage Lenders (CML) suggests that the problem has been sensationalised by the media. That may be true. It would not be the first time. I should point out the obvious, however: the CML’s concern is only for mortgages. What Shelter describes may well be more of a problem for tenants than for homeowners. Mortgage rates are exceptionally low at present, so it’s less likely that an owner-occupier will have difficulty meeting housing costs, other things being equal. Also mortgage payments are normally taken on a direct debit, the CML says.


The reduction in housing costs caused by low mortgage rates has not yet been mirrored in reduced rents (why not?? Logic tells me it should be). Therefore, other things again being equal (which they never are) a tenant is more likely to be tempted to solve a short-term cash-flow problem by paying the rent with a credit card.


Is the story true?


“In the current climate”, I would not be surprised if there has been an increase in the number using cards. But has the increase really been 50% in a year? That’s massive. What they say, if you read the various reports, is that it’s gone from 4% to 6% and that is indeed an increase of 50%.


Firstly, you’d have to ask how big was the sample; obviously they didn’t interview everyone in the country (well, they didn’t ask me, anyway). And secondly, here’s a bit of a giveaway. Last year’s survey calculated the number of households, rather than individuals, that fell into this category. However, “the figure for households has not been calculated this year”, according to the report. So are we comparing apples with oranges, to make a point?


So is it safe to pay with a credit card?


Back to the question at the top of this post; is it safe to use a credit card to pay your rent or (less likely) your mortgage? The answer is a cautious yes, but only under certain circumstances. Credit cards do not have the astronomically high interest rates of payday loans, but the principle is the same. IF there is no alternative, and IF you are 100% sure you can pay off the card in full before the interest kicks in (you have 4-6 weeks to do that) then fine. If not, then as I have said many times before … get help from one of the debt advice agencies (for example Citizens Advice, or Consumer Credit Counselling Services, or National Debtline) and put together a plan. If you don’t, you could find yourself on a slippery slope.


I’ll be following up this story. “Watch this space”, as the saying goes.






Here’s a piece on the website of Shelter, who produced the original report:


And here’s an item about the story on the BBC website:




My book “Back to the Black: how to become debt-free and stay that way” is now available to sample or buy, as a multi-format e-book, at:



Would you like to win a free copy of my e-book “Back to the Black: how to become debt-free and stay that way”? I’m giving away five copies for the best “budget Xmas” ideas I receive between now and 20 December.

The reason is simple: getting out of debt is one thing but of course you probably won’t stay out if you carry on spending money at the same rate as before. Cutting costs is not easy, but generating more income is harder, especially in today’s climate. So we all need to share ideas on saving money.

Santa reports peer pressure still strong despite recession

Managing costs is, of course, especially difficult at Christmas, with all the pressure from advertisers, and even harder if you have small children.

Right now, wearing my actor’s hat, I am spending ten days as Santa in a budget store in Wales.  When I ask the children (who are, without exception, delightful): “what’s the best thing about Christmas for you?” the answer in 95% of cases is, predictably enough, “lots of presents”.

Peppa Pig

By the way, if you are interested in toy branding, Peppa Pig is the name I hear most often while wearing the Santa hat. The name comes up unprompted, although I try to avoid getting into discussion of specific gifts. I don’t want to provide yet more cost pressures for the mums and dads who are generally standing nearby.

The popularity of Peppa Pig is good news for the BBC, as they no doubt make lots of money from the merchandising of this TV show. I’ve heard that Toys R Us has 84 Peppa Pig products; that’s a juggernaut for any parent on a limited budget to resist.

Ideas win books

My book has a final chapter called “Keep up the good work”, which is all about ideas for staying out of debt, once those debts have been cleared. Most of the ideas in that chapter are about saving money but I’m always on the lookout for new ideas. So the five best “Budget Xmas” ideas, suggesting how you plan to have a great Christmas without spending a fortune, will receive a free copy of the book in .pdf format. The ideas will also be featured in the book’s second edition.

Please e-mail ideas to me (, or you can post them on this blog as comments, whichever you prefer. Entries requested by 20 December, please.

Want to know more?

My book “Back to the Black: how to become debt-free and stay that way” is available on the Smashwords site. To sample (first 20% free) or to buy at only $3.99, go to


House prices up?

I read recently that domestic property prices in the UK increased by an average of 1.8% over the last month. That seemed surprising, given the economic situation but, according to a friend who is “in the know”, it isn’t a meaningful trend because the volume of sales is still small.

… or down?


However this rise followed “a big drop” the previous month, according to the Halifax. (I think it was 0.7%) Such a wide variation from month to month would seem to support the fact that these are not really meaningful trends. The less volatile three-month index showed a drop of 1.2% in the quarter.


First-time buyers still priced out


When last month’s drop was announced, a newsreader on BBC Radio 4 actually added: “however, first-time buyers are not taking advantage of the drop in prices”. Well, is that so surprising? Even if that month’s price drop had been a meaningful statistic, which it wasn’t, 0.7% is not much of a drop.


More importantly, UK property is still greatly overpriced. Who says so? The “Economist” magazine’s survey of international house price comparisons, taken in turn from official stats on price/rent ratios. According to the table the magazine published in late October, average UK property prices increased by 3% year-on-year; more importantly, property here is 32% overpriced.


To compare countries’ housing data over time, including price-to-rent ratios, see

To view my guide to personal debt, “Back to the Black: how to become debt-free and stay that way”, go to




The UK’s economy grew at 0.8% between July and September according to official figures from the Office for National Statistics (ONS). That growth is double the 0.4% expected by most analysts.

“This is the second major GDP growth surprise in a row and suggests that the UK economy is more resilient than many had feared,” said James Knightley, economist at ING.

“The government will no doubt take this as a sign that the private sector can fill the gap created by public sector cuts, but with consumer confidence, hiring intentions surveys and housing activity data all softening we remain cautious.”

The key is that phrase “hiring intentions”. I am a glass-half-full person, so I like to focus on the facts that the GDP increase is double what was expected and that it’s the strongest third-quarter figure in a decade, according to the BBC’s Stephanie Flanders.

However … a growth in GDP does not necessarily – and quickly – improve the lot of the majority of people in this country, particularly those who are already in debt or who face losing their jobs as a result of the recently-announced spending cuts. Our economy is still rather dependent on relatively non-labour-intensive sectors, e.g. financial services, so today’s good news is “necessary but not sufficient”.

Until those “hiring intentions surveys” also show a rise, there will still be large numbers of people going into bankruptcy or taking out an IVA (a Protected Trust Deed in Scotland).

I too was in that situation not so long ago. However I found another way, which I detail in my book “Back to the Black: how to become debt-free and stay that way.”

What is also encouraging is that construction seems to be showing the strongest gains in the last couple of quarters, as this would lead to job creation more than some other sectors.

To quote Stephanie Flanders again: “There is still plenty to worry about in this recovery: much of it beyond our shores, and beyond the government or the Bank of England’s control. But for today at least, I think we’re allowed to join the cabinet in a sigh of relief.”

Here’s a link to that Stephanie Flanders piece:

If you want to know more about how I personally escaped the threat of bankruptcy and IVA and found another way, go to


A most interesting piece on the Today programme this morning, (about 07:15, if you want to find it on iPlayer) about the importance to our economy of the manufacturing sector in general and of small businesses in particular. I switched on part-way through but the interviews I heard were with companies in the Jewellery Quarter in Birmingham; they were honoured in this way, not doubt, solely because the Conservative conference is in the city right now. The excellent presenter (James Naughtie, I think) and his interviewees together made the point that successive governments and the banks have failed to provide the environment where manufacturing could prosper (it’s now a shamefully small proportion of GDP) but that fact has been known for years. But their final clincher was one that had previously escaped me, obvious though it may be to you, dear reader: other things being equal, (which they never are) every new job created in manufacturing will contribute to the creation of far more jobs in supporting businesses than any new job in the service sector. Maybe this fact has always been obvious to the German government and that’s why both their small / medium business sector and manufacturing have been supported by more than words and maybe that’s why their economy is both more healthy and more sustainable than ours.

We’ve often been told about the “trickle-down” theory, i.e. that increased wealth at the top will trickle down to those lower in the food chain (does this justify those massive banking-sector bonuses? Discuss). Maybe it works, maybe not, but this morning’s message about the crucial importance of our manufacturing sector could be called the trickle-round theory. Or the ripple theory. Whatever we call it, I hope that Messrs Cameron, Osborne and Cable were listening to the radio at the same time as I.

Sadly, after that excellent segment normal service was resumed; a piece about Sainsbury’s increased profits followed by one about the will-they won’t-they sale of Liverpool Football Club. The football story was repeated at least four times, I think, between 7:30 and 9:00; the manufacturing story was not. Perhaps that shows where our national priorities lie. No wonder the country’s in the same kind of debt crisis as Liverpool FC but, unlike them, we don’t have an American white knight on the horizon.