'Misleading' debt firms shut down
One hundred companies offering to write off debts or secure personal injury compensation have been shut down by the Ministry of Justice since April 2007.MoJ spokesman Kevin Rousell said they had been guilty of making misleading claims and using high-pressure sales tactics to get people to pay huge fees.
"People desperate for a way out of their financial troubles can be vulnerable," he said.
Consumers were warned to be wary of offers that seem too good to be true.
The BBC's Colette Hume said many claims management firms targeted people who owed large sums to credit card or loan companies.
And with the industry growing quickly it was becoming increasingly difficult to police, she added.
Cold calling
The MoJ said some of the firms shut down had been using misleading advertising, claiming credit card debt could be written off within six weeks or that 80% of credit agreements were unenforceable.
In other cases, companies ignored requests for information from the government's claims regulator or were run by people who had convictions for fraud.
Rules state that firms must not cold-call potential customers in person and must allow a cooling off period of at least 14 days for anyone considering taking up an agreement.
But instead, some were found to be forcing already debt-ridden customers to pay large up-front fees only for the service to later fall through.
Mr Rousell said most claims management companies were operating within the rules.
"However, some companies choose to flout those rules and some also target consumers who find themselves in debt," he said.
"People desperate for a way out of their financial troubles can be vulnerable to the misleading marketing that the Ministry of Justice Claims Management Regulator is continuing to tackle.
"There has also been a trend towards high-pressure cold-calling from call centres, including making unsubstantiated claims and encouraging people into handing over fees there and then - a decision they regret later."
Mr Rousell said claims companies must give customers accurate information about the realistic chances of success and the costs involved in taking up their services.
They must also not pressurise anyone into making on-the-spot decisions or handing over money without properly considering the facts.
FH Debt Solutions can help you get back in control of your debts. Our highly trained advisors are always happy to help. Our Debt Management Plans & IVAs have already helped thousands of people on their way to becoming debt free.
Call Our Debt Management Helpline Today On 0800 389 6339
FH Debt Solutions are licensed Debt Adjusters and are Data Protection registered. We have partnerships with Licensed Insolvency Practitioners, Credit Brokers and Mortgage Brokers.
There are a large number of companies out there offering services but charging percentage fees on a month by month basis. These fees can be 15% of you overall payment. E.G. payment is £300 their fee is £45. FH Debt Solutions believes in being realistic with charges. We have built up strong relationships with creditors over the years that have helped give our customers a quicker and more effective service. Fees are based on work load, not the amount of debt you owe.
FH Debt Solutions is a partnership. The partners bring many years of experience in the Debt Management field. By working for other Debt Management companies, the partners found gaps in service, reliability, customer satisfaction and overpricing. Using our knowledge and listening to what customers want, FH Debt Solutions was formed.
All customers have an appointed member of staff to deal with their case from start to end. This helps us keep our service high and queries low.
Being in debt is stressful. FH Debt Solutions gives its customers a sympathetic, professional and stress free alternative to their debt problems, and with the office always open, you can call at a time that's convenient to you.
