ASA Bans Misleading Debt Ad

Thu, 18 Jun 2009

A company that promised to free struggling borrowers of loan and credit card debt in one of its adverts has been told not publish such claims again.

The Advertising Standards Authority (ASA) said the newspaper advert from Debt Free UK – under its brand Loan-Free.co.uk - was misleading because it claimed that customers could use a legal loophole to write off all their debts originating from before 2007.

The advert stated: "If your credit card or loan was taken out before April 2007 it could be completely unenforceable and will not need to be repaid. Our solicitors can use government legislation to arrange for your outstanding balances to be written off and claim compensation for you."

The 'legislation' is a reference to changes made to the Consumer Credit Act, which may nullify credit agreements taken out before April 2007 under certain circumstances.

However, the ASA said the promotion was deceptive to customers as the chances of them being able to exploit the law in this way are limited.

London-based Debt Free UK, denied that its advert contained any exaggeration, but was unable to convince the ASA that it has helped any of its clients win a successful case using this legislation.

As a result, the debt management company was banned by the advertising watchdog from showing the ad again in its current form.

Earlier this year, the Ministry of Justice issued new guidance on fee-charging debt management firms and warned anyone considering using their services to seek independent advice before making a final decision.
add to favouritesnewsletterlink to this pagesend to friendpost comments

Link to this page

Copy and Paste the following HTML into your page.