Review Of Debt Management Sector Announced

Fri, 06 Nov 2009

The Office of Fair Trading (OFT) is to review the largely unregulated debt management industry to ensure firms are treating customers fairly.

The OFT said cases of misleading advertising and poor debt advice have prompted the review, which will look into the practices and adverts being used by debt management companies in the UK, as well as how well the firms are complying with its guidance on minimum standards.

According to the watchdog, the debt management market has become increasingly complex since it last carried out a review of the sector in 2003.

It now features many new businesses as well as a diverse range of business models, including internet-based advertising .

But while the sector has grown rapidly, so have the number of complaints from consumers, with many being tricked into signing expensive agreements as a result of misleading advertising, or poor advice.

The OFT has warned the industry over using deceptive mailings and advertising, illegally cold-calling consumers and setting up misleading websites that look as though they are run by government organisations or debt charities .

Since April 2008, it has taken action against 24 companies for failing to comply with regulations in the sector, including refusing or revoking credit licences.

Ray Watson, OFT director of consumer credit, said: "A recent increase in formal OFT enforcement action, rising complaints and new problems emerging in the market suggest that some businesses are still not meeting minimum standards."

"This review will help us identify those practices that are harming consumers, as well as the reasons for non-compliance, and will help us target our enforcement action."

The findings will be published next year.
add to favouritesnewsletterlink to this pagesend to friendpost comments

Link to this page

Copy and Paste the following HTML into your page.