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OFT clamps down on misleading debt claims

Debt lead generator slammed for false statements

OFT Logo

The OFT has forced debt management lead generation firm Money Advice Direct Limited (MADL) to change its misleading advertising.

MADL operates by introducing people to debt management plan and Individual Voluntary Arrangement (IVA) providers via its website.

The OFT was concerned about false statements and misleading content on the company’s website. The OFT felt that this content encouraged consumers to believe that MADL was a not for profit organisation providing debt management solutions, rather than a commercial business acting as a lead generation company that passes contact details to debt management companies in exchange for a fee.

OFT demands change to debt help firm’s advertising

The requirements imposed on MADL set out that its advertising content across all media types, including its website, must:

  • Make it very clear to consumers that the company does not provide or administer debt solutions;
  • Provide consumers with adequate information about the service being offered;
  • Not imply that the service is impartial or independent;
  • Make its commercial status clear and not give the impression through any of its advertising that it is a charity or a publicly funded body;
  • Ensure advertising of its debt management services is consistent with the standards set out in the OFT’s Debt Management Guidance.

Separately, the OFT is also taking action to seek to compulsorily vary the company’s existing trading name ‘The UK Insolvency Helpline’ and to refuse its application to add the trading names ‘www.ivahelpline.co.uk’ and ‘www.insolvencyhelpline.co.uk’ to its licence. This action is subject to final determination by an OFT Adjudicator.

Una Farrell of the Consumer Credit Counselling Service (CCCS) commented: ‘This is a very positive development. Dealing with unmanageable debt is incredibly stressful. Trying to work out where to seek help only adds to this stress, so it is important that those offering advice clearly state what they are providing.

‘It is particularly important that consumers are not misled into believing a service is free when it is not, or that they are dealing with a charity when they are not.’

Which? debt advice

Martyn Saville, Which? credit and debt expert, added: ‘A quick Google search for debt advice throws up a variety of sponsored links from commercial debt management companies and lead generators. I think it is unethical for fee-charging firms to promote themselves in this way.

‘For company websites to compound the confusion in consumers’ minds is shameful and the OFT is to be congratulated on clamping down on these rogue firms.’

For a full list of truly free and independent debt advice organisations, including CCCS, National Debtline, Citizens Advice and Payplan, read the Which? guide How to deal with debt.

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