Comment on IVA Industry

Debt Free Direct Group PLC
01 October 2007



1 October 2007

                           DEBT FREE DIRECT GROUP PLC

                            COMMENT ON IVA INDUSTRY

Debt Free Direct Group (DFD), the leading debt advice and solutions company, is
making the following announcement commenting on the IVA industry in response to
today's pre close update by Debtmatters Group plc and the subsequent and
significant share price movements across the sector. As the market leader in
providing services to over-indebted customers, our views are as follows:-

IVA's are of fundamental importance to the UK banking industry and Government
policy and will remain so. This is particularly true during this current period
when levels of consumer indebtedness have hit record highs and with UK personal
debt standing at £1.3 trillion at August 2007. The provision of IVA's and other
services to creditors and over-indebted consumers is already a sizeable market
and is set to grow for the foreseeable future.

This has created a macro-economic climate which is strongly in our favour with a
growing number of potential cases to be dealt with. However, we have seen a
period of transition during the first half of this year, from which we have not
been immune, as the industry moves out of its adolescence and through a period
when key stakeholders, including ourselves, are demanding increasing
professionalism and efficiency. However Debtmatters' concern that they 'may no
longer be able to deliver IVA's profitably' is not one we share. To the
contrary, the current market shake-out will have its casualties, but will also
provide an opportunity for the market leaders in a consolidating industry that
will continue to experience profitable growth.

As a result of negotiations with creditors, IVA fees will increasingly be
calculated on a 'percentage of realisations' basis. This considerably favours
the best operators in the industry, who have the highest levels of realisations
for creditors. We believe that DFD has the highest level of realisations in the
industry as well as one of the lowest cost bases and will therefore continue to
write profitable IVA's, and also benefit relative to its competitors.

We continue to be in dialogue with creditors regarding fee levels and the
increased access for debtors to the IVA process. We remain focused on achieving
a mutually satisfactory outcome from these discussions over the next two months.

DFD has by far the largest back-book of existing IVA's which now makes up a
significant part of its annual profits as well as providing locked-in future
profits and strong cash flow benefits.

DFD have previously announced that it is planning to update investors in
November with the results of its strategic review. Our plans are focused on
pressing home our advantage:

    •As a large scale and low cost provider by further lowering our costs of
    operation

    •With continued profitable growth as reducing competition has a positive
    impact on reducing IVA case acquisition costs

    •As a consolidator in the sector as the current weakness provides
    opportunities

These plans are now well developed and actions are already being implemented.

Enquiries:

Debt Free Direct Group plc                             
Andrew Redmond, CEO                                    0845 296 0100
Paul Latham, Finance Director                          0845 296 0200

Numis Securities
Lee Aston                                              020 7776 1500

Financial Dynamics
Ed Gascoigne-Pees                                      020 7269 7132
Nick Henderson                                         020 7269 7114

About Debt Free Direct

Debt Free Direct helps individuals find the best solution to their debt
problems, based upon an analysis of their particular financial circumstances.
Financial information on an individual is processed through a computer model
(the Best Advice Model) developed by Debt Free Direct in order to recommend a
solution suitable for that individual's particular financial circumstances. The
solutions offered range from basic advice, such as simply destroying credit
cards and curbing unnecessary expenditure, to the following solutions:

   •consolidation loan
   •re-mortgage
   •informal arrangement
   •individual voluntary arrangement (IVA)
   •bankruptcy

Debt Free Direct is unique in the marketplace in that, unlike most of its
competitors who sell specific products, Debt Free Direct looks to provide the
best advice to the consumer and recommend them the most appropriate service.
Debt Free Direct is the UK's leading provider of IVAs.

The recent acquisition of Clear Start, a private competitor in the IVA market,
will support DFDs growth and has genuine synergies, bringing together DFDs
superior IVA operations and creditor realisations with Clear Start's low-cost
online channel and strong creditor relations.

Debt Free Direct is based in Chorley, Lancashire, and was admitted to AIM in
December 2002.

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