Debt Management Company Welcomes OFT Advice on 'Unenforceable Debt' Claims

October 2010

EuroDebt believes too many consumers are falling into more debt because of false promises by claims management companies

The Office of Fair Trading (OFT) is issuing new advice to consumers, to be released on Saturday 16th October, about their rights in relation to 'unenforceable debts'

Leading debt solutions provider, EuroDebt, welcomes this advice. The company has been concerned for some time about consumers falling into greater debt simply because they incorrectly believe that they can write off debts they think are 'unenforceable'. The new OFT Guidance makes clear that, should an agreement be 'unenforceable' because the lender has failed to provide the appropriate documentation under sections 77/78/79 of the Consumer Credit Act 1974, the consumer would still owe any outstanding monies up to that point.

"The problem is, a plethora of Claims Management Companies have emerged over the last few years, offering to wipe out people's debts if they can prove they are 'unenforceable' because the correct processes haven't been followed" explains Vance Parsons, Director, EuroDebt. "But the reality is this simply isn't the case. If a lender hasn't followed the appropriate procedure, certainly the loan may be deemed 'unenforceable'. But once the lender provides the required paperwork then that debt still needs to be paid.

"We are strongly advising any of our clients who are contacted by Claims Management Companies to be very careful about what they are being offered and promised. Much better is for them to seek assistance in managing the repayment of their debts. For example, on a EuroDebt Debt Management Plan (DMP) we can generally get interest and charges frozen on client debts as well as help them work out a manageable level of repayment to tackle the debts in the long-term.

"Just trying to find a way to refute the debt with the lender is unlikely to be a sensible long-term debt solution ."

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