If you've got a debt management plan with PayPlan and have joined its payment protection scheme, check now whether it's right for you, as letters sent by the firm cast doubts over whether people fully understood what they were buying.

MoneySavers have reported receiving letters from PayPlan stating that information given to them in the past on its 'Cover My Payments' membership scheme, "might not always have been clear", and that customers can cancel membership as a result.

The debt management firm, which offers free advice and debt solutions for those struggling financially, won't show us a copy of the letter sent or answer a number of key questions we have on the issue, including whether it sold similar versions of the scheme under different names.

It says this is a "business as usual" activity, which it conducts from time to time, and that it can't answer a number of our questions without seeing our article in advance of it being published – something we won't do.

However, it confirms it has written to all scheme members to "clearly" set out the "potential benefits and disadvantages" of their membership and to "give them an opportunity to reconsider whether the schemes are of value to them".

It wouldn't tell us how many people have received these letters or even how many customers have a debt management plan (DMP) with it, but it says letters have been sent because "the wording and information provided has inevitably evolved over time".

It stresses that despite it involving regulator the Financial Conduct Authority (FCA), this is part of a regular review of its products. The FCA wouldn't comment when we asked it for more information. See our Debt Problems guide for what to do if you're struggling.

I'm a member of Cover My Payments. What should I do?

Whether you've received a letter or not, if you're a member of this scheme now or have been in the past and believe it may have been mis-sold to you – because for example you were told it was suitable for you when actually it wasn't or you already had separate insurance to cover repayments you couldn't make – complain and ask for your money back.

See PayPlan's contact page for its freephone number, postal address and online contact form.

If you don't get a satisfactory response or you don't get a reply within eight weeks, take your case to free complaints arbitrator, the Financial Ombudsman Service. It says it's received a handful of complaints on PayPlan's membership schemes, although decisions on them have yet to be made.

PayPlan refused to say whether it would refund customers who believe they've been mis-sold to.

PayPlan writing to customers 'rings alarm bells'

MoneySavingExpert.com's campaigns manager, Wendy Alcock, says: "Past and present PayPlan customers should check urgently if they have ever been a member of this scheme and whether the policy was right for them. If it's not, they should ditch it quick and ask for a refund of everything paid to date.

"The fact PayPlan has needed to write to its customers to remind them of the purpose of the policy rings alarm bells that it's actually of little value.

"People who may have been persuaded to buy this membership were likely to be some of the most vulnerable in society, given that they were already struggling enough with their finances to need to take out a debt management plan in the first place.

"We hope PayPlan handles complaints fairly and doesn't make things harder still for people by stalling the complaints process or refusing to issue refunds. People need to be put back into the position they would have been if they had not joined the scheme, which means a swift return of their money."

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PayPlan 'Cover My Payments' member? Check if you should ditch it and get your money back

What exactly is the Cover My Payments scheme?

The Cover My Payments terms and conditions describe it as a non-insurance membership scheme that protects monthly DMP repayments against loss of work through illness, accident or unemployment – similar to how payment protection insurance (PPI) would cover your loan payments should you not be able to pay them.

The cover is no longer on sale to new customers, although PayPlan won't tell us when it was on sale, why it was taken off sale, or how much it costs. As outlined above, it's also unclear whether it sold similar versions of the same cover under different names.

The terms and conditions we've seen indicate that the Cover My Payments scheme costs £6 for every £100 repaid every month for individuals, and £7.50 per £100 repaid for two joint members.

We asked charities StepChange, Citizens Advice and National Debtline whether they offer similar repayment cover and they all said no. StepChange is the only one of these three to directly provide DMPs in the first place.

What does PayPlan say?

In a statement PayPlan says: "Within our standard governance and control processes we monitor and, where we consider it appropriate, review many aspects of our service to clients on an ongoing basis. We have conducted similar exercises in the past and anticipate that it is likely we will do so again in the future.

"The particular exercise you have referred to was initiated by us as part of our wider product management function rather than because of any FCA requirement. This is a 'business as usual' activity of the type we'd expect any responsible provider to carry out from time-to-time."

It adds that at the annual review it conducts for all clients with DMPs it also rechecks suitability and eligibility of membership, something that is repeated each year for the lifetime of their membership.  

However it wouldn't tell us how long this process has been going on, or whether it had been set up off the back of this latest review.

I'm struggling with debt. What can I do?

See our Debt Problems guide for what to do if you're struggling and where to get help.