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Some Trust Deed Websites Guilty of Providing Misinformation

3rd November 2010

The 2010 Trust Deed Survey asked the public whether, when reading a trust deed or debt advice website, they had read any misleading or incorrect information. In common with some other questions in the survey, we were shocked by the response.

Of those who expressed an opinion, 48% reported that they had indeed read misleading or incorrect advice on such websites.

In this article we consider some of the various types of websites which contain information about Scottish trust deeds. We will include details of the background to these differing types of website. It’s hoped this background information will help readers to analyse whether the information they are reading about a trust deed in Scotland is accurate and useful.

Trust Deed Introducers

Trust deed introducers are companies which offer debt information and advice with a view to passing potential cases to a trust deed company. They are paid by the trust deed company for the work they have done on the case to that point. Some trust deed introducers also charge their client a fee for their assistance prior to making the introduction to a trust deed company.

Websites operated by trust deed introducers typically focus heavily on the benefits of trust deeds with much less focus placed on the potential drawbacks that apply to certain people. Positive case studies and testimonials tend to feature heavily. Such emphasis on the “positives” at the expense of presenting a balanced picture may lead to some visitors feeling they are being “sold to” rather than fully “advised”.

Trust Deed Companies

Insolvency Practitioners are the professionals that handle trust deeds. Most work for companies which are either general accountancy firms or insolvency specialists.

Accountancy firms tend to include a couple of pages on their websites which relate specifically to insolvency and trust deeds. These web pages typically offer a more balanced picture of the process and service than might be found on the site of a trust deed introducer. Generally the information can be considered to be reliable as it is subject to the review of the professional bodies which regulate the accountants and insolvency practitioners at the company.

Insolvency specialists may take a slightly more sales-led approach with their websites than general accountancy firms. However, once again this information is subject to the review of professional bodies and as such can generally be assumed to be reliable.

Trust Deed Comparison Websites

In recent years we have seen the rise of “comparison websites” which have made it easy for people to compare quotes and save money. Unsurprisingly such a “comparison” concept has spread to increasing numbers of niche areas now including protected trust deeds.

They are usually operated by trust deed introducers and as such tend to focus on trust deed positives at the expense of negatives.

The basis of such a site is that a member of the public might visit the website and compare trust deed companies in terms of how much it would cost them to sign a trust deed to deal with their debts. The concept however is ridiculous; the website knows little or nothing of what you can afford to pay towards your debts at the point at which it makes the “comparison”. A trust deed company is actually legally obliged to ensure that a debtor does pay what they can reasonably afford if they sign a trust deed.

Such “trust deed compare” websites tend to indicate in the small-print that they are in fact making a comparison of what it might have cost you had you approached the most expensive trust deed introducers (companies which charge upfront fees to pass your trust deed case to a real trust deed company). It has nothing whatsoever to do with the fees trust deed companies would charge to manage your case. It also has nothing whatsoever to do with how much you might be expected to pay into a trust deed each month.

One such website currently features a photo and quote from “Mr. D of Glasgow” where he kindly informs us that: “these days you have to shop around to get the best deal!” The same website has a link you can click if you are an English resident. Click through and guess what you find? It’s ‘Mr. D of Birmingham’ who looks remarkably similar to his namesake from Glasgow, and explains: “these days you have to shop around to get the best deal!” however this time it’s about an IVA, a non-Scottish debt solution!!

Trust Deed and Debt Advice Forums

Forums can be a useful resource as they allow the free exchange of information and questions without necessarily needing to speak with anyone in person or to reveal your identity.

Caution clearly needs to be exercised where the experts or advisers (who are answering the questions) are using names or usernames other than their own full names in the forum. If it’s not possible to verify whether the adviser has the qualifications or experience to be able to genuinely assist and advise, we’d suggest you treat any advice with caution.

There are many debt advice and trust deed forums where named advisers can help. This allows visitors to do their own simple background checks to ensure the source of advice is credible.

Debt Charities

The content of websites operated by debt charities can generally be considered reliable.

Debt charities have no commercial reason to focus on “sales” rather than “advice” and therefore tend to be balanced in terms of their portrayal of both the advantages and disadvantages which apply should you be considering a trust deed.

There are no debt charities that currently directly provide trust deeds, so any information provided will need to be confirmed with the trust deed company you might subsequently speak with directly.

Debt Management Plan Companies

Most major debt management and IVA companies include a page on their websites regarding trust deeds. The standard of the information varies enormously as might be expected of companies that themselves offer hugely varying levels of quality and service.

The biggest of these operators may have protected trust deed companies within their group of companies. As such they will have the in depth knowledge to provide an information web resource if they so choose.

Many of these operators however, have a very limited knowledge of trust deeds and Scottish trust deeds in general. These operators typically feature very basic information, which is often sales-led rather than advice-led.

In writing this article we have reviewed many such websites which include information that is both misleading and incorrect. Therefore caution is to be advised.

Government Websites

Government departments involved in debt and Scottish insolvency may include information regarding trust deeds. The primary resource available is the website of the Accountant in Bankruptcy ( Scotland’s Insolvency Service).

As well as including neutral and factual information about protected trust deeds, the AIB website also includes excellent information regarding other potential debt solutions such as sequestration and the Debt Arrangement Scheme.

For further Trust Deed news and information, please visit our forum where we have a wealth of trusted and free advice from experienced industry experts.

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Wylie & Bisset Grant Thornton

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