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OFT cracks down on misleading debt advice websites

Debt charity look-alike sites ordered to close

The Office of Fair Trading (OFT) has told 11 businesses with ‘look-alike’ websites posing as official or charity advice sites to close them down immediately.

OFT Logo

The sites use similar domain names which imply that they are affiliated to organisations such as Citizens Advice, Advice UK, National Debtline or the Consumer Credit Counselling Service. Some of the website names imply that they have some official status or sanction from the Government.

The action follows complaints from a number of debt advice charities including Citizens Advice.

The OFT advised consumers to take particular care when searching for terms such as ‘citizens advice’ or ‘government advice’ to ensure that they are dealing with a genuine charity-based help and advice service.

Debt advisers must be OFT-authorised

Most businesses that offer credit or lend money, including those that offer advice on debt, must be licensed by the OFT and they must notify the OFT of all the trading names they intend to use. Trading names should not be misleading. Failure to comply with an OFT warning can result in a business being subject to licensing action or criminal prosecution for unlicensed trading.

Ray Watson, OFT Director for Consumer Credit said: ‘The OFT will take action against businesses that use ‘look-alike’ websites to mislead consumers into believing they are dealing with established charitable or not-for-profit organisations.

‘Consumers are also reminded that they should not deal with any company that does not have a consumer credit licence. These unlicensed businesses are unregulated and consumers may have no means of redress if things go wrong’.

Consumers can check whether a business holds an appropriate consumer credit licence by searching the OFT Consumer credit register.

Citizens Advice responds to OFT clampdown

Citizens Advice logo

Citizens Advice offer free and independent debt advice

Citizens Advice Director of Public Policy, Teresa Perchard said: ‘We are really pleased that the Office of Fair Trading (OFT) has taken action to close these websites which have been misleading the public by marketing themselves on the back of extremely well known and well trusted charities and government information services.

‘Instead of free impartial debt advice consumers could find themselves charged fees, sold products or offered a paid-for debt management plan. In addition, some of these sites have no information about whether the company or any of the advisers the site refers the consumer to hold a credit licence or are qualified to help them.

‘This decisive action from the OFT sounds a strong warning to other companies thinking of using names for their sites or creating ‘links’ in web searches which look and sound like well known debt advice charities. It sends a clear message that this is unacceptable and incompatible with maintaining a credit licence.

Which? debt advice

Which? welcomes the OFT‘s move to shut down look-alike debt advice websites. This move will remove some of the confusion consumers face when seeking impartial, free advice.

Individuals struggling with debts should seek independent, free debt advice directly from organisations such as the Consumer Credit Counselling Service (0800 138 1111), National Debtline (0808 808 4000) or their local Citizens Advice Bureau (number in the phone book).

Consumers should avoid commercial debt management companies – why pay for a service that is available better and free elsewhere?

For more detail, see the Which? guide to dealing with debt.

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