Debt websites shut down by watchdog
By Matt Dickinson, Press Association
Saturday, 7 March 2009
The Office of Fair Trading (OFT) is taking action against the companies which help devise repayment plans for people struggling with debt.
The watchdog said the businesses used website addresses similar to non-profit organisations when, in fact, they were commercial operations.
This is in contrast to agencies such as Citizens Advice, the Consumer Credit Counselling Service and the Money Advice Trust which offer free debt counselling services.
The suspect firms - which have not been named - operate 27 websites, and OFT officials believe "a substantial" number of consumers could have been deliberately misled.
OFT credit director Ray Watson said: "We believe they are misleading consumers by holding themselves out as free advice agencies such as Citizens Advice, the Consumer Credit Counselling Service, the Money Advice Trust and Advice UK."
He added: "There is a danger that with increasing unemployment, more people could run into financial difficulty and we are concerned that at the point where they are most vulnerable and seeking advice, they are being deliberately misled by people who are trying to gain a commercial advantage from them."
The regulator says if the firms do not comply, they could lose their consumer credit licences. They could also face prosecution if they are not licensed.
The move was welcomed by Citizens Advice (CAB).
Its director of policy, Teresa Pritchard, said: "We are very pleased the OFT is now taking action.
"For several years now, we have been getting reports from people approaching the CAB who have been worried about sites and telephone calls they have had from people operating advice sites who have names very similar to ours. This action should mean that we see an end to that."
The OFT is urging consumers to be vigilant when searching for debt advice on the internet.
Companies and websites can be checked out on the watchdog's consumer credit register.