Watchdog shuts down debt websites
The Office of Fair Trading (OFT) is taking action against more than a dozen businesses which set up repayment plans for people struggling with debt.The watchdog says these debt management companies are deliberately misleading consumers by using website addresses similar to non-profit organisations.
In actual fact, they are commercial enterprises, the OFT says.
The regulator says it believes a substantial number of consumers could have been deliberately misled.
It has written to 13 companies who run 27 websites and has told them to shut them down.
The regulator says if the firms do not comply, they could lose their consumer credit licences. If the companies are not licensed, they could face prosecution.
'Deliberately misleading'
"There is a danger that with increasing unemployment, more people could run into financial difficulty and we are concerned that at the point where they are most vulnerable and seeking advice, they are being deliberately misled by people who are trying to gain a commercial advantage from them," says Ray Watson, director of credit at the OFT.
"We believe they are misleading consumers by holding themselves out as free advice agencies such as Citizens Advice, the Consumer Credit Counselling Service, the Money Advice Trust and Advice UK."
The OFT have not named the 13 companies, but Citizens Advice has been worried for some time about debt management companies which use words that could give the impression they are connected with government organisations or the CAB.
"We are very pleased the OFT is now taking action," says Teresa Perchard, director of policy at Citizens Advice.
"For several years now, we have been getting reports from people approaching the CAB who have been worried about sites and telephone calls they have had from people operating advice sites who have names very similar to ours. This action should mean that we see an end to that."
As our debt mountain has grown, the number of businesses offering advice and solutions has increased rapidly.
There are now countless debt management companies advertising online which are perfectly legal as long as they have a consumer credit licence and adhere to the OFT's debt management guidance.
They are also well within their rights to charge for their services.
But charities like the Money Advice Trust say this should be made clear. It is warning consumers to do their homework before signing up for a debt management plan.
Chief executive Joanna Elson says: "If people aren't sure if the advice really is free and independent, they should look carefully at the website. An easy way is to look at the 'About Us' section to find out who funds it and who is behind it.''
The OFT is urging consumers to be vigilant when searching for debt advice online. If people have concerns, they can check out companies and websites on the OFT's consumer credit register.
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.
