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Tuesday, 28 September 2010

OFT Targets Debt Management Firms

The Office of Fair Trading (OFT) have found 129 debt management firms are
not meeting current standards. They have mainly been found to have misled consumers in their advertising by implying that their services are free.

In addition, customer advisers were found to be lacking in competence and to be providing poor advice based on inadequate information.

The OFT is therefore updating its guidance to take “explicit account of new and emerging unfair business practices”.

Ray Watson, director of the OFT’s Consumer Credit Group, said: “Debt management firms must be clear about their charges and the options available to customers.

In our view it is essential that these firms are brought to book. Many businesses and consumers, who are in need of help, may be discouraged from taking advice to try and solve their problems if they think that any advice is not value for money.

Insolvency practitioners have for years been pointing out that there is a large difference between insolvency work, that is regulated and licensed and by the authorities, and businesses in the debt management sector who are not regulated in any way.

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