The Central Bank has made contact with the creditors of clients of a Dublin-based debt management company asking that people whose bills have not been paid by the company be treated “sympathetically”.
The bank wrote to around 500 hundreds of customers of Dunne & Maxwell, which trades as www.yourmoney.ie, earlier this week recommending they suspend all payments to it immediately and "consider contacting the Garda" if bills to be paid on their behalf by the company are not up to date.
The company, which has been acting as a debt-management company for over seven years and has an office on Clarendon Street in Dublin 2, has not returned calls or emails from The Irish Times.
In a letter dated January 20th, the Central Bank advised the company's customers to stop making payments "with immediate effect". The bank said people using the company to pay bills or repay loans would have to check directly with bill issuers to make sure their accounts were up to date and if not, it suggested they make contact with the Garda.
The bank's letter said that "in the public interest and as part of a general review of the debt management sector", it had inspected the company and had "reasons to be concerned about the nature of the company's operations and its handling of customers' money."
"If you are currently making payments to the company, we recommend that you cease all payments with immediate effect. This means that Dunne Maxwell will not be in a position to pay any bills on your behalf. It is important therefore that you contact creditors without delay in order to inform them of the circumstances and to discuss what arrangements you need to put in place for the future," the letter, signed by Patricia Moloney of the bank's consumer protection division, said.
While the Central Bank has no regulatory power over debt-management companies and cannot force companies to comply with orders it makes it decided to inspect the bill payment and debt management industry in the wake of the collapse of bill payment company Home Payments last summer to assess whether any firms providing such services were carrying out any activity which it could regulate.
The first phase of this review has now concluded and the bank has contacted a number of companies, aside from Dunne and Maxwell, notifying them that some of their activities are subject to regulation and compelling them to take immediate steps to provide additional protection to client funds.
In a statement released today it said recommendations of the Law Reform Commission to ensure that the debt management and debt advice services of all firms in the sector are subject to regulation be implemented as soon as possible.
