Debt management plan (DMP) providers

Frequently asked questions

Do DMP providers charge fees?

Some DMP providers do charge for their plans.

On average:

• Fees are around 17% of the monthly payment
• A DMP from a fee-charging company could cost you an extra £4,000

We do not believe people should pay for DMPs.

• StepChange will set up and manage your DMP with no hidden fees
• Our clients only pay toward paying off or reducing their debts

What does a DMP provider do?

DMP providers will:

• Help you work out your budget
  
  • This includes your bills and living expenses
  • They will use this to see what you can pay toward your debts
• Send payment to your creditors on your behalf
• Keep track of what you pay and what you owe

Do DMPs hurt your credit score?

DMP payments are smaller than what you first agreed to pay.

• These are called ‘partial payments’
• They are on your credit file for six years
• This forms part of your credit score
• Sometimes creditors add a 'DMP marker'
• They may also default your account
  
  • This stays on your credit file for six years

Find out more about how DMPs affect you.

DMP providers – advertising rules

Strict advertising rules were introduced in 2010.

DMP providers are breaking the rules if:

• They advertise themselves as free but
• They actually charge fees

A typical plan from a fee-charging DMP provider could cost around £5,000.

DMP providers must follow rules and guidelines set by the Financial Conduct Authority.

The advertising code states that:

1. If the client will pay anything other than unavoidable charges like:

• Response costs
• Delivery costs

Then companies cannot call themselves:

• "Free"
• "Without charge"
• Or similar

2. Financial products must be shown in a way that:

• Is easily understood
• Does not take advantage of inexperience

Never pay for debt help. We provide free, impartial debt help and advice with no hidden charges.

Has your debt management firm closed down?

Many debt management firms closed recently.

We can help if this impacts you.

Visit our closed debt management company page for more information.

Who uses our help?

Being in debt is often caused by a change in circumstances, like:

• Reduced income
• Losing a job
• Relationship problems
• Family crisis
• Changes in employment

We offer debt help and advice to clients are from all walks of life.