Debt management firm ordered to stop 'inaccurate ads'

Click to follow
The Independent Online

The trading watchdog today called on a debt management firm to stop making misleading claims in its advertising.

The Office of Fair Trading (OFT) has imposed a series of requirements on Carefree Group, based in Haworth, near Keighley in Yorkshire, and an associated company Carefree Debt Solutions.

The requirements include not making claims that consumers will be debt free within a set period of time without explaining the adverse impact this will have on their credit rating.

The firm must also not claim or imply its service is free if it is not, while it must include details of all fees prominently in its advertising.

It has also been told not to claim it can "guarantee" a favourable outcome when negotiating with creditors, while it must also stop claiming it can help people make savings by rescheduling their debts without making it equally clear that this will cost them more in the long run.

The firm must also explain all of the advantages and disadvantages of each debt solution it offers when providing consumers with advice.

Ray Watson, director of the OFT's consumer credit group, said: "The OFT will not hesitate to take action against any debt management business which uses material that misleads consumers.

"The requirements imposed on Carefree Group Ltd will ensure that the company's advertising will not in future contain claims that are inaccurate.

"We will monitor these requirements closely and take further action if necessary."

In November last year the OFT launched a review of how well debt management firms were complying with its guidance on the minimum standards of behaviour it expects from companies in the sector following a rise in internet advertising.

It is due to report its findings this summer.