According to Blu, thousands of borrowers have paid fees upfront to firms involved in the unenforceable credit agreement business, which promised their unsecured borrowings would be wiped out.

However, in the majority of cases, these cases have failed and clients have been left in a worse financial situation than before. This is not only because of fees, but because many were advised to stop making their monthly payments during the process of trying to get their agreements cancelled.

Many brokers have also been directly affected, having diversified into the unenforceable credit agreement business and finding the firms they were dealing with might not have been reputable and left their clients worse off.

As a result, Blu said many of those mortgage brokers are now turning to debt management to rebuild the trust of their clients, help repair their damaged finances and to find a new income stream for themselves.

James Briggs, sales director at Blu, commented: “Over the past couple of years numerous advisers have diversified and entered the unenforceable credit agreement (UCA) market in good faith. However, following the closure of several UCA firms, including a major firm in Manchester, we are now seeing many of these advisers seeking fair and transparent debt solutions in order to rebuild the faith of their client bank.”

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