Consuming Issues: Scam debt text hopes to trick the vulnerable
Saturday 02 April 2011
Debt settlement orders are a new government-backed scheme which allow people struggling with debt to apply to have it written off. At least that's according to a text I received this week. But the text is a scam: there is no such thing as a debt settlement order (although there is the similar-sounding debt relief order) and there's no government-backed scheme which allows you to have your debts written off.
There are schemes that can help people struggling with debt, as Mark Sands, head of personal insolvency and bankruptcy at accountants RSM Tenon points out. "These email scammers are taking advantage of other people's misfortune just when they need and deserve good advice. I'm worried that as these so-called debt settlement orders sound so similar to legitimate debt relief orders that many may fall foul of this scam," Mr Sands says.
His advice? "This is a complex area and the public should know that the decision between debt management plans, debt relief orders, individual voluntary arrangements and bankruptcy should only be made after taking professional advice."
But whoever is responsible for these texts hopes you'll be tricked into responding, either to ask for more info or to stop further texts. Either way they will have achieved their aim of finding out whether your mobile number is live – and once they have that the spam torrent will start.
You could end up being bombarded by offers from dodgy debt management companies who will try and charge a fee for dealing with your debts, but actually do nothing more than take your cash leaving you in a worse financial state. Currently we're waiting to hear the results of a Citizens Advice super-complaint against dodgy debt firms lodged with the Office of Fair Trading last month, but until the Government acts to close them down they'll be able to continue ripping-off those in financial straits.
What is pernicious about these spam texts is that they target vulnerable people who may clutch at the straw of a debt solution, only to find that they're entering a whole new world of financial pain.
The growing menace of the texts has angered James Wiseman, a 34-year-old IT consultant. When he received one and realised the damage it could cause, he set up a warning website (at www.jameswiseman.com/blog/2011/01/17/debt-settlement-order-unsolicited-text-message). Now he wants to take the campaign further to force the Government to introduce legislation to stop these kinds of dodgy activities.
"When I set up my website I simply felt that this sort of thing is a scam which should be condemned. But as I got more and more responses, I was struck by the humanity of the situation and filled with an acute awareness of the true suffering that some might be feeling," James says.
"Debt is a plight that doesn't tend to lie in the general public's compassion sweet-spot. It engenders a perception that somehow an individual has been frivolous, and maybe shouldn't have bought that 50-inch plasma television. But in a society where we are openly encouraged to embrace debt, there are inevitably some casualties. When desperate people are are at their most vulnerable, so they clutch at the flimsiest of straws, and there are none flimsier than some of the companies that purport to help with debt relief."
James says it's time to make it illegal for anyone to charge up-front for helping to resolve debt. Legitimate debt managers – there are some – will argue the case. But there's no need to pay for advice when you can get it free through debt charities. For starters you can try your local Citizens Advice Bureau. Or call National Debtline, part of the Money Advice Trust, on 0808 808 4000. Or you can get free counselling through the Consumer Credit Counselling Service at www.cccs.co.uk or on 0800 1381 111.
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