Debt society watchdog tackles misleading advertising that could leave Britons worse off

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DEBT companies with misleading advertising that could make the struggling Britons worse off could soon be fined or lose their license.

New guidelines issued today call for insolvency practitioners – people who help troubled Britons manage their debts – to take more responsibility for advertising their services.

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Hardened Brits can be tricked into misleading debt counseling ads

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Hardened Brits can be tricked into misleading debt counseling adsCredit: Alamy

This includes avoiding unsubstantiated claims about how much debt can be written off, using the word accredited, or using names similar to charities in advertising.

The guidance was issued today by the debt agency’s regulator, The Insolvency Service.

It comes after the Advertising Standards Authority last month banned “misleading” ads for two debt companies offering the individual voluntary schemes (IVAs).

An investigation by The Sun has also found dubious debt firms, which have similar names to free charities, pay to appear at the top of the search engines.

How to get free debt help

THERE are many groups that can help you with your problem debts.

  • Citizen advice – 0808 800 9060
  • StepChange – 0800 138 1111
  • national debt – 0808 808 4000
  • Debt Advice Foundation – 0800 043 4050

Information about Debt Management Plans (DMP) and Individual Voluntary Arrangements (IVA) can also be found on the Money Advice Service website and on the government Gov.uk site.

Talk to one of these organizations – don’t be tempted to use a claims management company that claims it can write off a lot of your debt in exchange for a high down payment.

In today’s update, The Insolvency Service warned that some ads are making “unbalanced statements” about the benefits of an individual voluntary settlement (IVA) as opposed to bankruptcy or other debt resolution.

This is a concern expressed earlier this week by the Financial Conduct Authority, which stated that the IVA market is broken by “harmful” tariff structures.

An IVA is a formal alternative for people who want to avoid be declared bankrupt.

It is a legally binding agreement between a person and those to whom he owes money, also known as creditors.

The Insolvency Service said: “All these actions can mislead consumers into requesting/requesting the services offered and this could mean that consumers in debt could end up in a solution without getting appropriate advice.

“This type of advertising has come in various forms, including the use of one-click websites, social media advertising, and the use of social media influencers and competitions.”

All trustees must be registered with a recognized professional organization (RPB), such as the Association of Chartered Accountants.

The Insolvency Service has said that the RPBs should monitor advertisements used by members, as well as their relationships with those who control the messages.

Where there are concerns, the Insolvency Service said the RPB should investigate why an IVA was proposed and what advice was given.

If the RPB is not satisfied with the response, the Insolvency Service may enforce said regulatory action.

RPBs have the power to fine members and they can limit or revoke their permission to act as trustees.

The insolvency service said: “It is important to ensure that trustees take responsibility for the consumer’s journey before reaching the practitioner.

“With better communication between the relevant regulators, we should be able to focus on increasing the quality of debt advice, reducing bad advertising practices and inappropriate IVAs.”

Debt charities like StepChange and national debt have long campaigned against misleading ads that lure people to inappropriate products.

Richard Lane, director of external affairs at StepChange, said: “This new guidance, with tighter monitoring and better coordination between regulators, is of course very welcome.

“However, even under the new guidance, there is a risk that the approach could be one of closing the stall door after the horse has stalled, as it remains largely reactive and tackles bad practices after the event.”

He said explicit legal regulation was needed to prevent misleading lead generation ads in the first place.

The Financial Conduct Authority has announced that the seizure ban lasts until April but bailiffs will be able to seize goods and cars.

See how to request one mortgage payment vacation.

A ban on bailiff evictions which was to end on January 11, has been postponed to at least February 21.

Consumer Crew: How to Manage Your Finances and Get Out of Debt?

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