June 19, 2009 10:49 ET

Fairpoint Re-Launches New Debt Management Plan ClearStart

CHORLEY, UNITED KINGDOM--(Marketwire - June 19, 2009) - Fairpoint Group, the financial services business focused on serving financially stressed consumers, has launched through its ClearStart brand a new debt management plan (DMP) which is designed to ensure that creditor returns from consumers in financial difficulties are maximised. The re-launch of ClearStart will introduce a number of industry firsts:

- The use of IVA protocols and accredited processes for the sale and validation of Debt Management Plans.

- The best creditor and consumer value debt management plan in the market place - monthly fees will be just 10%, there will be no upfront fees and in order to incentivise consumers to stick with their plans, the final two contracted payments will be met by ClearStart on behalf of the consumer.

- The introduction of a creditor friendly charter which will ensure that practices such as churning consumers between IVAs and Debt Management Plans are ruled out.

Following a review of the market place for debt solutions, Fairpoint Group has concluded that this product has a key role to play because:

- The type of advice given to consumers by organisations offering free debt solutions is driving a strong bias towards bankruptcy and this in turn is driving creditor returns down and consumers into financial exclusion.

- There appears to be a clear lack of capacity in the market and indications from most of the government supported advice organisations suggests that there is a need for an additional outlet to help consumers requiring quality debt advice.

- Whilst the IVA sector has been improved by the introduction of protocols and accreditation standards, the debt management sector would benefit from similar changes and ClearStart will take the lead role in improving these standards.

Chris Moat, CEO of Fairpoint said: "More and more consumers are struggling to meet credit repayments. This has a huge impact on creditors and our concern is that recoveries will fall as personal insolvency increases. The re-launch of ClearStart is designed to help creditors recover more than other debt solutions companies, turning bankruptcy candidates into better solutions. Our advice process ensures that where consumers can afford to make monthly contributions to repay their debts, then creditors will receive the maximum payments possible. It is anticipated that creditors will in turn support the product by crediting gross contributions to consumer accounts, providing optimum levels of interest forgiveness.

"ClearStart's aim is to lead the industry by improving the standards of advice given and ensuring better debt recovery for creditors. We will aim to help consumers to avoid financial exclusion by restructuring consumer finances so that repayments can be made to creditors without introducing unnecessary financial hardship. This is in the best interest of creditors, consumers and the economy."

With unemployment looking to peak at 3.25 million by the beginning of next year, and the Citizens Advice Bureau currently dealing with 7,241 new debt problems every day, it is expected that demand for ClearStart's services will increase substantially during the coming months, both through creditor referrals and enhanced "free" sector partnerships.

Contact Information

  • ClearStart
    Louise Dolan
    020 7269 7192
    Cortney Thomson
    020 7269 7209
    PO Box 555
    PR6 6HF