Operation Update

Debt Free Direct Group PLC
18 October 2006


18 October 2006


                           DEBT FREE DIRECT GROUP PLC

    DEBT FREE DIRECT TAKES THE LEAD ON AUDIT AND ACCREDITATION AND PROVIDES
                                OPERATION UPDATE

Having for some time been lobbying for greater regulation of the sector, Debt
Free Direct ('DFD') are delighted that creditors are now recognising that not
all debt advice companies are the same and that only enhanced regulation can
ensure that both the consumer and the creditors get a fair deal. DFD has built 
its business to be 'regulation ready' and has recently conducted a number of 
high level meetings with lenders to discuss the issues for the debt solutions 
industry. From those meetings it is clear that creditors are concerned about:

   • Unregulated businesses advertising IVAs in inappropriate ways (for
     example, leading consumers to believe that 75% of their debt can always be
     written off).

   • Consumers being mis-sold IVAs when there is a more appropriate solution
     for both consumers and creditors.

   • Offers of repayment being put forward which are not the consumer's best
     affordable offer.

   • Advice companies profiting from putting consumers into fee charging debt
     management plans that are significantly less beneficial to both consumers
     and creditors than the creditor funded debt management plans available from
     companies like PayPlan and CCCS.

   • 'Not for profit' advice groups advising too many consumers to go
     bankrupt and avoid making payments to their creditors.


Debt Free Direct shares all of these concerns. We have also noted the response
of Jim Fitzpatrick (Trade and Industry Minister) to the banks' calls for greater
regulation of the debt solutions industry. We understand, and have some sympathy
with, the Minister's position.

DFD remains of the view that, unless and until the lenders' legitimate concerns
are addressed, a consumer's access to an IVA may be compromised. This is
contrary to the Insolvency Service's (a department within DTI) stated aim of
increasing access to IVAs.

In an attempt to increase awareness of these issues and to offer solutions to
them, DFD is holding a conference on 9 November 2006 and has invited the major
banks and other lending institutions exposed to the consumer debt problem to
attend. Debt Free Direct's message is three-fold:


1. When an IVA is the appropriate course of action for the consumer it will
   also give a higher return to the creditors than any other solution.

2. When IVAs are properly put in place (that is, the Debt Free Direct way) the
   return is significantly (29%) higher than returns currently being achieved
   by the 'industry' as a whole.


3. Creditors can ensure that appropriate advice is given and IVAs are put in
   place properly by accepting only IVAs put forward by 'audited and
   accredited' debt advice companies.

DFD is working with an international firm of accountants with specialist
knowledge of the IVA market to develop an audit process that will provide
lenders with re-assurance that:

   • best advice is always given;
   • offers of repayment are always the best available;
   • advice is robustly tested;
   • a fair balance between the interests of the consumers and lenders is
     maintained.

The audit will take place in a few weeks' time and the audit opinion will be
submitted to creditors for their consideration.

Our meetings with lenders give us considerable confidence that they will embrace
the 'accreditation route'. We expect this to be very good news for DFD and other
high quality solution providers. Clearly, the poorer performers will be
identified and isolated.

Debt Free Direct has, for some time, considered itself to be the market leader
and has close to 20% of the IVA market. Its success relies upon giving the most
appropriate advice to consumers and at the same time achieving the best
available return for creditors whilst treating their customers fairly. We expect
these initiatives to strengthen further our position in the market.

Operation Update

DFD has now successfully completed the relocation of its principal operation to
40,000 sq ft premises in Adlington, Lancashire. These premises provide
considerable space for continued growth of the business. Recruitment activity
has been ramped up and we expect to employ 300 people by December 2006.

DFD is currently trading in line with the last trading update delivered to the
market on 04 September 2006. Our enhanced resources have allowed us to increase
our media activity in a cost efficient manner. We expect to generate and process
record levels of IVA cases in the coming months. A trading update will follow in
due course.


Enquiries:


Debt Free Direct Group plc
Andrew Redmond, Chief Executive Officer     01257 240599
Paul Latham, Finance Director               01257 240529


Numis Securities
Iain McDonald                               020 7776 1500
Lee Aston

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


Notes


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 recommends them the most appropriate service.

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








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