Lead generators: Making money from debt

 

 

People who are in debt will often search the internet for terms such as ‘debt advice’ or ‘debt help’ and find themselves overwhelmed with pages offering government schemes, affiliating themselves with charities, or claiming to write off 80% of debt. They encourage you to simply enter some basic information and someone will be in touch to solve all your problems. 

 

Have you ever filled in a contact form on one of these websites and discovered that the company who calls you isn’t the same one you gave your details to? Then you may have given your information to what is known as a “lead-generator” or an “introducer”. 

 

Whilst these sites often look like debt advice agency websites, they aren't licensed by the Financial Conduct Authority (FCA) to give debt advice. Their goal is simply to get you to enter your contact particulars so they can pass them on to a commercial debt management firm.

  

Debt management firms may buy leads from introducers because some debt solutions, such as debt management plans, Trust Deeds and IVAs, generate income for them.

 

In many cases, introducers actually filter out clients that don’t appear to qualify for these solutions in their web forms, which means the service they provide is much less helpful to the average client. Debt Advice Foundation undertook some research, posing as someone in debt, and found that these companies had little interest in those with low-value debt or those that did not fit into a money-making debt solution, and simply advised us to “contact the Money Advice Service”.

 

This means that those on low incomes or with low level debts will not get the help they need as they won’t be making anyone any money, and it can also mean that clients may be pushed into this type of debt solution even if there is a better option available to them.

 

David Rodger, CEO of debt advice charity Debt Advice Foundation said;

 

“Introducers are in the business of selling on personal details and were exempted from FCA regulation when it took over stewardship of the sector.  Instead, the FCA made authorised firms that purchase the leads responsible for the behaviour of any introducers they contract with.

 

“It is scandalous that companies advertising complex financial products such as these lead-generator websites are not regulated by the FCA and therefore subject to the same sanctions as an authorised firm.  Introducers are often the first touch point that vulnerable people have with the sector.  

 

“This does not necessarily mean that the advice a client is given, via an introducer, is wrong, however, it is always best to contact a debt charity directly, who will be able to consider the full range of options that may be available to the client.

 

“Avoid websites with grand claims of wiping out debt. Always look for the debt company’s FCA number, which all authorised firms will display somewhere on their website. A genuine debt charity will have both an FCA number and will also display a charity number.”

 

If you're looking for impartial debt advice, contact Debt Advice Foundation on .