Steve Walker, group managing director at Promise Debt Solutions, said debt management companies are over-charging and not delivering a service, which has wrecked a client relationship for the broker.

He said some firms are charging between the first three and six months disposable income as an initial fee when only two months of the clients disposable income should be charged.

Walker said there are cases where the client’s disposable income has been over-stated by as much as double which means clients often cannot afford the plan.

It is also vital that brokers research before selecting a partner to refer their clients to, Walker added.

Walker said: ” Brokers need to take care in choosing a partner to provide their clients with a cost effective and reliable service. This means understanding the applicable commercial terms. They should be mindful that setting up a flashy website and offering great commissions is easy. Delivering on the promises is another matter.”

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