Beware Of Dodgy Debt Advice!

If you need help coping with your debts, tread carefully and don't get caught out by this scam.

I want you to imagine this awful scenario: you're heavily in debt and struggling to make your monthly repayments. Keen to get out of debt, you enlist the help of a professional debt-counselling service. After taking this firm's debt-management advice, you start making payments to it.

Horrifyingly, after months or even years, you discover that the whole operation is one big swindle. Instead of forwarding your payments to your creditors (organisations to which you owe money), your money is siphoned off and used to enrich your debt counsellor. Aargh!

Sadly, this is allegedly what happened to customers of Matthew St John Crossley, also known as Matthew Crossley and Matthew Prevett. Crossley used two websites (now shut down) to promote what was described as `free, independent and impartial debt advice'. However, his advice was none of these things. In fact, it was allegedly fraudulent and led to several borrowers losing their homes.

Crossley's clients allege that he misled them about the services provided, failed to pass on some payments to creditors, charged hefty fees, and refused to return money to unhappy customers. In some cases, he encouraged customers to remortgage (arrange large loans against their homes) in order to repay their creditors.

Unfortunately, it is alleged that chunks of this money ended up lining Crossley's pockets. In some cases, customers parted with tens of thousands of pounds, only to be worse off than before. Indeed, one customer had to sell his home and another was bankrupted as a result of taking Crossley's so-called `advice'.

In March 2007, Crossley's dodgy dealings were exposed on the BBC's Watchdog programme. After an investigation earlier this year, the Office of Fair Trading (OFT) closed down Crossley's firm, the Debt Advisory Company. The OFT also revoked his consumer credit licence, which prevents Crossley from providing debt-management advice in future.

It is believed that Crossley has skipped the country and is now living abroad. I'd be delighted if Crossley were to return to the UK, only to face fraud allegations and possible criminal charges. What he did -- preying on the desperate and vulnerable -- is disgraceful. Regrettably, this could well turn out to be the tip of the iceberg and, as the economy weakens, I expect to see similar stories emerging.

In summary, if your debts are getting on top of you, be sure to take advice only from a reputable and independent debt-counselling service. My advice is to contact one of the following organisations, all of which have an excellent record of helping Brits to dig their way out of debt:

         The Consumer Credit Counselling Service (CCCS) (0800 138 1111)

         National Debtline (0808 808 4000)

         Citizens Advice (you can find the local number in your telephone directory)

Finally, you can seek help from the fabulous Fool community by visiting our Dealing With Debt and Living Below Your Means discussion boards, and in our Get Out of Debt centre.

Many thanks to BBC News and Watchdog for breaking this story.

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