Crackdown On Debt Advertising

Wednesday, 18 February, 2009

Debt companies have been quick to respond to news that the government is cracking down on misleading advertising.

“The statements being put out by some businesses ... are of concern to the industry as a whole and highlight why consumers should be wary about where they turn for support,” said Matthew Porteus, managing director of Ratio Money, which attempts to reclaim money for customers who believe they have been subjected to unfair credit card charges.

The Ministry of Justice has accused the companies of targeting vulnerable people who need support with claims that debts accrued on credit cards or unsecured loans can be written off in as little as six weeks time, and that most credit agreements are not enforceable.

The guidance had been produced to protect consumers from “businesses advertising easy and quick arrangements for outstanding loan, credit card and other similar debts to be written off and compensation to be obtained,” said Justice Minister Bridget Prentice.

The Ministry of Justice has warned companies that they could face enforcement if they continue to mislead customers into thinking that their debts will be written off.

Heavy job losses in the UK, coupled with growing household bills, are expected to lead to a rise in the number of people forced to use credit to meet daily expenses. Figures from the Insolvency Service at the end of 2008 showed that consumers were coming under growing strain from high levels of debt, with 10 per cent more bankruptcies recorded compared to the previous year.

Source: http://www.ft.com/