OFT demands closure of debt websites

10/03/2009

Financial management firms who trick customers into believing that they are affiliated with debt charities or even the government are the subject of a new Office of Fair Trading (OFT) crackdown.

The organisation has ordered 13 un-named financial firms to shut the sites down immediately.

Web addresses for the sites were designed to closely match the names of charities including Citizens Advice and National Debtline.

In this way, customers ran the risk of being tricked into thinking that the debt management firms were run on a not-for-profit basis.

Commenting on the OFT crackdown, EuroDebt director Kevin Still said: "We have been pro-active in identifying the websites that are deliberately misleading consumers, as these adversely affect the reputation of the leading fee charging Debt Management Companies that fully comply with the OFT Debt Management Guidance notes.

"It is often the same companies behind these websites that breach trademark laws in the sponsored links at the top of search engines like Google. We have to be constantly vigilant that our trading styles are not abused by third parties and report them to the appropriate authority and search engine provider."

He added: "Companies that masquerade as ‘not for profit’ debt advice providers are entirely different from licensed companies that provide a combination of initial free debt advice and then chargeable debt management services afterwards. Any fees applicable should be totally transparent when the consumer selects the most appropriate debt solution for their circumstances, which could, for example, be self-management, a Debt Management Plan (DMP), an IVA or a supported bankruptcy service."

The move was welcomed by consumer group Which?

Doug Taylor, personal finance campaigns manager at the organisation, said: "These companies are little more than wolves in sheep's clothing."

Tags; Housing Debt and Bills, Credit Card Lifestyle,

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