Government continues crackdown on misleading debt ads

20/08/2009

Claims management firms who publish misleading advertising, giving customers hope that they can exploit legal loopholes to get their debts written off, are being cancelled by the government.

The Ministry of Justice has announced that the crackdown has now reached 100 firms - with the sanctions being enforced due to industry rules being ignored.

Customers were also warned by officials that they should be suspicious of promotional claims that saying things like "we can write off all your outstanding debt" and that cards can be written off "within six weeks".

In fact, laws are considerably more consistent than these firms suggest - making it unlikely that the write-offs will occur.

Meanwhile, the claims management firm will have made money by taking initial fees from the customer.

Commenting on the milestone, head of regulation at the ministry Kevin Rousell, said: "The majority of claims management companies registered with the Ministry of Justice are operating within the rules.

"People may have paid large up-front fees for a service that doesn't live up to the marketing hype, and in the case of debt-related claims find themselves still liable to pay all their debts in full. There has also been a trend towards high pressure cold calling from call centres, including making unsubstantiated claims and encouraging people into handing over fees there and then - a decision they regret later."

Tags; Housing Debt and Bills, Credit Card Lifestyle,

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