There have been new guidance rules posted this week from the OFT (Office of Fair Trading) regarding debt management firms. The guidance has been put together to ensure that the standards are high for companies who offer debt management advice or services of that nature.

These rules from the new guidelines include not:

  • Sending any spam text messages, emails or voicemails to customers
  • Making claims about their businesses which are untrue or misleading
  • Providing inappropriate financial incentives to staff to give debt advice. This is because it may encourage them to promote some products to gain the incentives.

It also mentioned that these companies are expected to refer customers to organisations who offer free advice to those who have emergency debt problems. Or refer those that don’t have enough money to pay off the fees.

There is already a Debt Management Guidance, which was published in 2001, and is continually updated. It’s now been updated following a consultation and review of all of the debt management companies in the UK. Since their review, the OFT had given some 129 warnings to debt management companies and this lead to 87 of them shutting down.

Any company which offers credit in any form has to possess a consumer credit license from the OFT. This means that they are regulated by the OFT and have to adhere to their rules. So, if a company is found to be breaking those rules, the OFT can decide to take their license away and they will be unable to trade.

Tips for Swedish readers – snabb finans blog.