Are you still paying fees on an old Gregory Pennington DMP?

For a few years Gregory Pennington (GP), a part of the Monetary Wellness Group (FWG), has charged its shoppers month-to-month charges for operating Debt Administration Plans (DMPs)

However MaPS awarded Gregory Pennington a contract that started on 1 February 2023. And it will probably’t cost charges for DMPs beneath this contract.

StepChange, Payplan and CAP have at all times supplied “fee-free” DMPs, the place all a shopper’s fee go to clearing its money owed.

So what has occurred to the older DMPs that GP prices charges for?

Gregory Pennington’s DMP charges

Final yr its web site stated:

Gregory Pennington Restricted prices an association price of as much as £195 from the primary 6 common funds you make, to cowl the price of organising your Debt Administration Plan (DMP).

A administration price will even be charged of 20% of the fee you make in every fee interval (this might be each 4 weeks or month-to-month relying on what fits you greatest and once you obtain your common revenue), and is topic to a minimal of £42.50 and a most of £90.

We’ll solely take a most of 49% in charges of every fee to make sure that not less than 51% is paid to your lenders.

GP tells shoppers that there are different fee-free DMPs. They do that at the beginning of a DMP and at every annual overview. So it’s the shopper’s selection what DMP agency to make use of.

Charging charges makes a DMP take longer to complete

Payment charging reduces the cash that goes to a shopper’s collectors. In consequence, it is going to take longer to finish the DMP and the shopper stays in debt longer.

Take an instance of a shopper paying £100 a month in direction of money owed of £6,000:

in a StepChange DMP with out charges, the money owed can be all cleared in 5 years
paying the outdated Gregory Pennington charges, the identical money owed would take over 8 years to clear.

That is the explanation I’ve at all times prompt that individuals keep away from fee-charging DMPs, see Selecting a debt administration firm – free or pay charges?

When will Gregory Pennington inform shoppers about fee-free DMPs?

GP will inform a shopper at their annual DMP overview that they’ll now swap to a fee-free plan.

However that doesn’t appear affordable to me. Some shoppers can be instructed after a few months, others after practically a yr.

By delaying telling somebody, it might value that shopper a whole lot of kilos in charges they don’t have to pay.

Additionally an argument that it’s the shopper’s selection whether or not to modify doesn’t appear proper right here. A shopper could also be pleased with their DMP and be anxious about switching to a distinct agency. However what motive might there presumably be to say to GP, No, we might moderately keep it up paying you charges although we don’t should?

As an alternative, a greater method can be for GP to instantly cease amassing charges and refund shoppers the fees which were collected since February when the MaPS contract started.

The FCA’s PRIN 6 says:

A agency should pay due regard to the pursuits of its clients and deal with them pretty.

The way in which GP is approaching this doesn’t appear to me to be within the pursuits of its shoppers and isn’t treating them pretty. And from the top of July, it might even be in opposition to the brand new FCA Client Responsibility.

Purchasers paying charges can complain

I believe a shopper paying charges for an outdated Gregory Pennington DMP ought to complain. And ask for a refund.

It’s higher for these complaints to be in writing. In case you can ship a grievance by message if you end up logged into the GP web site, that may do. In any other case, e mail [email protected] with “Grievance about DMP charges” because the title.

Here’s a template so that you can adapt:

“I need to make a grievance in regards to the month-to-month price I’m being charged for my DMP. [insert a DMP reference number or client number if you have one]. I’ve been instructed that because the begin of February new DMPs you arrange don’t have any charges. Why haven’t you switched your present clients like me over to the brand new, cheaper plans? Your inaction right here has extended the time it is going to take for me to get out of debt and is unfair.

I would love my account to be switched to a no-fee DMP instantly. And I’d additionally like a refund of the charges that I’ve been paying because the begin of February.”

In case your grievance is rejected, ship it to the Monetary Ombudsman. That is simple – use the Ombudsman’s on-line kind.

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