OFT Warns Debt Management Firms About Misleading Trading Names

The Office Of Fair Tradinghas this week issued a warning to commercial debt management firms not to imply or infer that they are a debt charity or Government affiliated institution.The OFT told Baker Evens, part of the Paymex Group, that it would not vary it’s Consumer Credit Lisence to include the trading names ‘Bankruptcy Helpline’ and ‘Insolvency Helpline’as they implied that the company was an ‘impartial, non-commercial or governmental organisations, rather than a commercial enterprise’.

The OFT stressed that the action was a refusal to vary the company’s credit license, not a censure of the company itself.

The OFT’s Ray Watson commented “Consumers must be able to distinguish commercial debt management companies from free charitable or government services”, adding  “we will not agree to names that could mislead consumers into contacting companies when they might think that they are accessing free advice”.   Nick Pearson, a director at Baker Evans, disagreed with the OFT’s findings saying “We have disagreed with the OFT throughout our long running dispute. It is clear from our website that we are not free”.

The warning comes only 2 months after the OFT advised 129 debt management firms to change business practices that were found to be in contravention of the regulator’s debt management guidelines. The 11 month study highlighted some of the increasing concerns with commercial debt advice companies, such as profiteering, misleading use of trading names, misleading advertising and the provision of inappropriate debt advice.

To read the full article click here.