The Office of Fair trading, OFT, has told six debt management businesses and four cold-calling companies to stop using unsolicited and misleading calls to advertise their services or face formal enforcement action.

The action has been taken after the OFT and the Information Commissioner's Office received complaints from consumers that they had been cold-called either without prior consent or despite registering with the Telephone Preference Service (TPS). The OFT also found that most of the information given to consumers was potentially misleading or inaccurate, or missed out vital facts about the purpose of the call and the identity of the caller, for example:

• some calls misled consumers into believing that they were one of the 'few chosen individuals' contacted as part of a government scheme to help wipe out consumer debt
• some recipients were transferred to a commercial debt management business on the pretext of talking to a not-for-profit debt adviser, and
• once referred to a different business, consumers were often not told that there was a fee payable for both the initial advice and the debt solutions offered.

The businesses warned today may also have broken the law by pestering individuals who had not given their consent to be called and/or who had registered to the TPS.

Source: oft.gov.uk

Debtwizard comment

Unfortunately there are companies and individuals out there giving the wrong advice - playing on the person's desperation and lack of awareness of their options.

This bad advice can cost people their livelihoods and relationships.

The debt recovery industry needs a complete overhaul with clear guidelines on how often a borrower can be contacted and by what methods. There needs to be strong legislation to penalize those lenders/debt recovery agents that break the guidelines.

What a shame the OFT cannot name the 10 businesses warned about unsolicited cold calling because of disclosure provisions under Part 9 of the Enterprise Act 2002, as to do so may sort out the problem!

It is very easy to register with the Telephone Preference Service, just click here for more information.

The next big story on UK consumer debt saga will be the way the debt collection industry bullies, intimidates, and often breaks the law to chase consumer debts.

More on how to deal with harassment can be found here.

How to deal with debts that are over six years old can be found here.