We use cookies to allow us and selected partners to improve your experience and our advertising. By continuing to browse you consent to our use of cookies. You can understand more and change your cookies preferences here.


Dodgy debt companies: ASA to crack down on adverts

Firms breaching guidelines will be reported to Trading Standards

Regulators have issued a warning to dodgy debt advisors, committing to clamp down on adverts that promote inappropriate and expensive debt repayment plans to vulnerable customers.

The Advertising Standards Authority (ASA) has said it will take targeted action to ensure firms comply with advertising rules, and will refer culprits to Trading Standards if they don’t. 

A recent Which? Money investigation found private debt advisors posing as charities to trap struggling customers into individual voluntary arrangements (IVAs) that aren’t always the best option for their circumstances, potentially plunging them deeper into debt over the long term. 

Here, we take a closer look at the dodgy debt advice phenomenon, and what the new ASA enforcement could mean.

Be more money savvy

Get a firmer grip on your finances with the expert tips in our Money newsletter – it's free weekly.

This newsletter delivers free money-related content, along with other information about Which? Group products and services. Unsubscribe whenever you want. Your data will be processed in accordance with our Privacy policy

The dodgy debt advice problem explained

If you’re struggling with debt, you might try to search online for solutions. But we’ve found Google is rife with imposter firms posing as registered debt advice charities. 

When we searched for debt charity StepChange in February, the top result was a website brazenly calling itself ‘Stepchange’, even though its actual URL was startupchange.co.uk. 

We also searched for another leading charity, National Debtline, and found another imposter company at the top of the page. We were unable to reach either firm when we tried contacting them. 

These firms make it to the top of Google’s search results by placing paid advertisements. Since Google allows paid ads for the search terms ‘stepchange’ and ‘national debtline’, the only way these charities can make sure they appear first is by spending valuable funds on advertising. 

Google has removed dodgy ads we’ve flagged to them in the past, but new examples usually pop up soon after. StepChange’s head of media Sue Anderson told us the charity complained about 72 Google ads last year, likening it to ‘a game of whack-a-mole’. 

At the time of writing, the website startbychange.co.uk has placed an ad at the top of the search for ‘stepchange’, with text that implies it is StepChange itself.


What is an IVA and what are the alternatives?

The firms posing as legitimate charities usually act as lead generators who will sell your details to companies offering IVAs. It’s lucrative for the firms, but it’s not always the right option for people in problem debt. 

Typically, IVAs allow you to make reduced debt payments over five or six years, with the rest of the debt written off after that. They’re best suited to people with valuable assets, such as homeowners. 

The alternatives to IVAs are:

  • Breathing space: a scheme that stops creditors collecting or enforcing debt for 60 days to give you time to seek advice
  • Bankruptcy: this writes off all debts and gives you a fresh start. However, you will have to sell off any assets you own, such as a house or car, to pay your creditors
  • Debt management plan: a reduced monthly payment that can be managed personally or by a debt management firm.

Hear more: Which?’s Faye Lipson and Debtcamel’s Sara Williams discuss dodgy debt advice and IVAs on the Which? Money Podcast.

Opinion: 'Laudable but limited'

by Faye Lipson, Which? Scams Expert

The ASA’s focus on this issue is laudable, but it is quite limited in its powers. Ads which fall foul of the code on which it operates usually face no more than a published ruling naming and shaming the advertiser, weeks after the initial complaint.

Such ads are banned, but the ban is toothless as the ad has often disappeared by the time judgement is provided - only to crop up again under a different name or with slightly different wording. Referring the worst offenders to Trading Standards is a welcome step, but Trading Standards is itself notoriously underfunded. 

Why should society shoulder the cost when blame lies with the platforms - primarily search engines and social media sites - that repeatedly allow impersonating and misleading debt ads? 

For too long, these platforms have been content to monitor adverts for complex and sensitive financial service using crude and permissive algorithms. StepChange is right; while it remains comfortable and highly lucrative for the platforms to continue in this vein, things simply will not change.