Money News: Debt write-off claims land IVA companies in trouble with watchdog
Sunday 15 April 2007
A trio of companies that offer individual voluntary arrangements (IVAs) to people heavily in debt have come under fire for misleading claims in their adverts.
The Advertising Standards Authority (ASA) has ruled against radio and television adverts for the Accuma Group, Money Debt & Credit and W3 Debt Solutions. In each case, the firms claimed that customers could write off the majority of their debts by taking out an IVA.
A television advert for Money Debt & Credit, for example, claimed: "Write off up to 75 per cent of what you can't afford to pay." A radio advert for Accuma invited listeners to "get up to 80 per cent of your debts written off".
IVAs are plans that, with the agreement of the majority of creditors, allow borrowers to pay back a proportion of the debt they owe over a set period, usually five years. Rising numbers of people in debt are taking out IVAs as an alternative to bankruptcy, and the popularity of the plans - together with the high fees paid to companies setting them up - has raised concern among consumer groups and banks.
The ads were challenged by a rival IVA provider, Debt Free Direct, which alleged that the Accuma advert, for example, was misleading "because it did not make clear the fees payable under the terms of an IVA".
The ASA upheld the complaint in each of the three cases and said that, in reality, very few customers would be able to write off as much of their debts as the advertisers claimed. It concluded that, with all three firms, the adverts were misleading and should not be repeated.
The move was welcomed by Citizens Advice, whose spokesman, Peter Tutton, said: "We have seen cases of people being persuaded to take out an IVA when it is not appropriate, often with disastrous results."
Earlier this year, the Office of Fair Trading warned 17 firms promoting IVAs not to mislead customers in their advertising - or face formal action.
Unclaimed assets: 'One-stop shop' for forgotten funds
A dedicated "lost and found" service should be set up to let savers trace money in dormant accounts, the Commission on Unclaimed Assets (CUA) and the National Consumer Council (NCC) said last week.
The two independent bodies also called for the new service, which would offer help through a single point of contact, to be tightly regulated.
The recommendations were made as part of a review looking at ways of investing unclaimed funds.
Dormant bank and building society accounts are defined as those that have not been touched by a customer for 15 years; there is estimated to be around several hundred million pounds in them.
The Government said last month that it was aiming to introduce legislation as soon as possible to allow assets in dormant accounts to be reinvested, via charities, for social improvement - without taking away the owners' right to reclaim the money.
A report from the CUA and NCC recommends the creation of a "one-stop shop" to reunite people with their financial assets. It also calls for an overhaul of banking regulation to ensure that dormant funds are properly identified as such by financial institutions, and that more proactive means are used to locate customers who cannot be contacted at their last known address.
"The idea that there may be money not under the mattress but in lost accounts is one that appeals to people," said Ed Mayo, chief executive of the NCC. "This ought to be good news for banks and the Government, who are driving things. But we are warning that any feelgood factor could fast turn into a new consumer backlash if the right protection is not there to make it easy and certain for people with legitimate claims to get their money back."
Mortgages: FSA probe to focus on high-risk loans
The Financial Services Authority (FSA) is to investigate whether "sub-prime" borrowers with patchy credit histories are being treated fairly by banks.
As part of an ongoing investigation into mortgages, the City regulator announced its intention to focus on parts of the market where customers are at greater risk of defaulting.
Areas of concern include sub-prime mortgages, which carry high rates of interest, and also lifetime mortgages, which are aimed at older homeowners who want to withdraw equity from their homes to fund their retirement.
There are mounting concerns over the UK's £15bn sub-prime lending market, which has seen tremendous growth in recent years. In the United States, thousands of borrowers in this sector are struggling to meet their repayments, triggering a rise in defaults and repossessions.
Mortgage sales in the UK are more tightly controlled than in the US, and sub-prime represents a smaller proportion of the market, reducing the risk of a similar crisis here. However, the industry was rocked last week by news that the specialist lender Kensington had issued a long-term profit warning.
Crowd-to-let: How crowdfunding sites can give investors a slice of the property market for £500
General Election 2015: How you vote next week could affect your finances
Social tenants locked into energy tariff for 40 years
Winter heating underpayment brings summer pain
Five Questions On: GB Energy's new tariff
- 4 Women think Irish men are the sexiest, survey finds
- 5 Florida couple forced to register as sex offenders for having sex on public beach
In defence of liberal democracy
General Election 2015: Post-election 'shambles' looms as 70 per cent of voters say SNP 'should not be able to veto UK government policies'
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...
£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...
Day In a Page
Located in the University area, this semi-detached five-bedroom home is arranged over three floors - there's even a rear garden and off-road parking too.
Only a few minutes' drive from the charming town of Marlow, this two-bedroom home sits on the private riverside estate of Harleyford.
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.
In a row of eight detached Georgian residences, this five-bedroom home offers views of The Sound, Mount Edgcumbe and Cornwall from its impressive veranda and full-length balcony.
If you love cooking for friends this two-bedroom flat - complete with views of the iconic Battersea Power Station and an open-plan kitchen/dining area - will go down a treat.
Located above Grasmere village, this five-bedroom home is arranged over three floors and offers countryside views across Grasmere Lake towards Silver Howe.
Surrounded by the Western fells, this five-bedroom Georgian home retains many original features including panel-plastered ceilings, sash windows and fireplaces.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B, subject to change of use permissions.
A former period coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, office, kennels and an outbuilding that's currently used as a gym.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This four-bedroom detached home comes with a double carport, useful workshop, garden and two walkways that offer views of the adjacent countryside.
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
This four-bedroom home has exposed brick chimneys and a vaulted ceiling in a breakfast room that's ideal for summer entertaining - the doors open to the patio and garden.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business