Posted: Friday August 05 2011, Blog Tags:
Thousands of euro in savings are feared lost after Dublin-based Home Payments went bust. Customers advised to cancel all direct debits immediately!
THOUSANDS of consumers have been left in the lurch after the collapse of a company that helped them manage their household finances.
Home Payments, which helped households to budget and spread out payments, ceased operating yesterday.
The company insisted it was acting to protect its customers and to secure their deposits.
Anyone who has dealings with the firm was last night advised to cancel all direct debits and standing orders immediately.
National Consumer Agency (NCA) chief executive Ann Fitzgerald described the situation as "appalling" and called for greater regulation of the debt management industry.
"We strongly urge any consumer who needs help managing their budget to get advice before approaching any private debt or budget management company," Ms Fitzgerald said.
Operating in Dublin since 1963, Home Payments takes over the paying of householders monthly bills like rent, mortgage or insurance for a fee. A typical customer would not have a bank account, and would prefer to have someone else managing their finances and paying their bills for them.
The firm collects money on a monthly basis from the front doors of customers or gets them to set up a direct debit making one payment to Home Payments a month.
The company then makes individual payments on the customer's behalf each month.
Many people were using it to save as well by giving any excess funds they had to the collectors who called to their doors.The directors of the company, based in Rathmines in Dublin, said the shutdown was with immediate effect.
"The directors have also been advised that this course of action is in the best interests of all their customers and creditors," Home Payments said in a statement on its website.
"The company is acting to protect its customers and to secure customers deposits."
The unsigned statement blamed failed investments in property for the closure, and added that the company was currently in discussions with lenders to restructure its debt. Phone calls were not answered.
There are no regulations covering the operation of companies like Home Payments, despite the fact that it was handling consumers' money.
The Central Bank and the Department of Finance both said they had no comment to make.
State body, the National Consumer Agency, advised anyone with any dealing with the company to cancel their direct debits.
It called on the Government to urgently bring in legislation to regulate all companies that take money from consumers.
Home Payments managed the household finances for people, especially those with irregular income.
It charged a consultation fee of €25, and a fee of up to €6.65 a week. Accounts for the company show that it lost €130,000 in the year up to March 2010.
Listed as directors are Niamh Ryan of Templeogue in Dublin, Eamonn O'Connor, also of Templeogue; and Conor O'Connor of Firhouse in Dublin.
The accounts show the company owed its lenders €7m in 2010.
It has property investments that were last valued at €3m and €1.3m, according to the report of the auditors.
- Charlie Weston and Kevin Keane, Irish Independent