Debt centre shows client deficit

A CONTROVERSIAL money advice service, based on American-style credit counselling, has found itself short of clients six months after its launch, writes Andrew Bibby.

While staff at traditional money advice agencies, often based at Citizens' Advice Bureaux, complain of increased workloads, the pilot Consumer Credit Counselling Service (CCCS) in Leeds has begun newspaper and radio advertising to promote its services.

The Leeds office has extended its potential client base to the entire North of England and offers telephone counselling to those based elsewhere. Modelled closely on a similar agency in Houston, the centre aims to become self-financing by charging credit firms 15 per cent commission for debts that are paid off. Selected clients are invited to join a debt management programme, typically lasting for four years, during which time they pay an agreed amount monthly to the CCCS for distribution to creditors.

Although all inquirers are offered counselling, the centre's manager, Roger Lees, accepts that his agency is seeing more of what he describes as 'middle-class, credit-card-type debt'. The CCCS says its average client is 37, married, has debts of pounds 14,500 and a mortgage of pounds 42,000. The Leeds centre predicted that, in line with US experience, about a third of its clients would be suitable for the income-generating debt management programme. In fact, fewer than one in five of its 700 clients have so far converted.

Initially funded by Barclaycard and other credit providers, the operation is the pilot for a proposed network of similar centres across the whole country.

The Money Advice Association, which represents established advice agencies, has been critical of the experiment.

Leeds CCCS is on 0532 342202.