How can I tell which organisations offer good debt advice & which offer bad debt advice?

It’s very difficult to tell which organisations offer good debt advice from those that offer bad debt advice. The main problem is that the provision of debt advice in the UK is unregulated (see the charity’s Blueprint for ethical advice and sustainable solutions) and no-one other than Debt Advice Foundation actually publishes information on their advice principles, so it’s difficult to compare.

Some people claim that you should avoid commercial organisations at all costs as they factor in how much profit they can make from the various solutions. Whilst there will undoubtedly be companies that give bad debt advice because of this, it's important to remember that there are also good, honest companies out there that can help you.

Fortunately, there are a number of rules of thumb that you can use to make sure that your advisor is reputable:

  • Has the advisor clearly set out the drawbacks of the proposed solution as well as the benefits?
  • Are they licensed to give financial advice by a body such as Financial Conduct Authority?
  • Can you find a registered business or office address on the website where the advisor can be traced?
  • Do they have a formal complaints procedure?

Debt Advice Foundation bases its advice on the following principles:

  • Our advice and support is available to everyone who needs it, no matter what their economic or social circumstances.
  • Our advice is based on the following key principles:
      1) Our advice will fully solve the person's debt problem
      2) We will recommend the least drastic and most appropriate solution available
      3) We will aim to achieve the above in the shortest time possible
  • Our advice and support is confidential and free of charge.

Debt Advice Foundation is a registered UK charity offering free, confidential support and debt help. If you need to talk to someone about debt, please call the charity's helpline on 0800 043 40 50 to speak to an adviser.