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OFT revokes licences for misleading IVA mailings

Credit licenses cancelled in debt advice clampdown

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The Office of Fair Trading has revoked the credit licenses of four companies sending out misleading IVA mailings

The Office of Fair Trading (OFT) has revoked the consumer credit licenses of four businesses targeting consumers with misleading unsolicited debt solution mailings. 

The companies claimed that recipients of the mailings may have been mis-sold an Individual Voluntary Arrangement (IVA). The mailings sent suggested that bankruptcy might be a better option for consumers, when this may not have been the case. Consumers accepting the advertised services would have had to pay additional fees to switch to a different debt solution that may not have been in their best interests.

As such, the poor quality advice and misleading nature of the mailings breached the OFT’s Debt Management Guidance. The four companies are Bankruptcy Limited, Intl Marketing Limited, UK Bankruptcy Limited and UK Mortgage Link Limited.

Debt advice companies trading under misleading names

The companies operated mainly out of the Dorset area. Some were linked to potentially misleading trading names such as ‘The IVA Council’, ‘IVA Review Board’ and ‘IVA Watchdog’. The businesses were associated with each other in various ways, including through certain common directors. The OFT also refused to grant licences to two other associated businesses, Petitions Direct Limited and UK Restart Limited.

David Fisher, Director of the OFT‘s Consumer Credit Group, said: ‘Companies must not use misleading mailings or give advice that they know may not be in the interests of borrowers. Where the OFT has evidence that companies have breached its guidance, it will use its powers to stop them from doing so again.’

Which? debt expert Martyn Saville added: ‘Once again several companies in the debt management industry have shown that they can’t be trusted to put consumers’ interests first. The OFT’s clampdown on these firms is welcome, particularly in the case of those companies seeking to exploit official-sounding trading names that falsely imply that they have government approval or backing.

‘The number of bad news stories coming out of the debt and credit sectors shows that consumers need to be on their guard against companies that seek to exploit their financial distress. Just last week we saw loan lead generators targeting people with disabilities, while the recent super-complaint by Citizen’s Advice shows that coldcalling and upfront fees charged for loan broking services already pose significant problems for people struggling to access mainstream credit.’

Which? debt advice

If you’re struggling with debt, read the Which? guide How to deal with debt, including 10 reasons you should never use a commercial debt management company. 

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