Warning signs to watch for

Introduction

Debt management firms are generally staffed by skilled and highly trained salesmen who use psychological scare tactics to talk the general public into entering into consolidation loans and debt management programmes that do not work.

The OFT have set statements they have found to be in breach of the OFT debt management guidance. Please note that this is not an exhaustive list and statements which are not listed below may also be found to be misleading and in breach of the OFT debt management guidance:-

1. Statements implying the service is free.

2. Statements implying the service is provided by a free and independent source of debt advice

3. Statements emphasizing a debt free life

4. Statements emphasizing the savings to be made

5. Statements claiming to freeze interest

6. Statements implying a guaranteed favourable outcome with creditors

7. Statements implying that there is no risk to the individual or their credit rating

8. Statements implying stress free and/or quick solution

9. Statements implying that there will be no contact from creditors

10. Status implying Government status

11. Statements intending to discredit or misrepresent services offered by competitors

12. Statements implying that the company is the leading and/or the biggest in its field

13. Misleading statements regarding the publication of an IVA

14. Misuse of OFT name

15. Misleading statements regarding the OFT's Consumer Codes Approval Scheme (CCAS)

16. Misleading Statements about unenforceable consumer credit agreements

Look for these warning signs...

• Companies That Quote " Debt Warning!!, debts over £10,000. We can help you write of 90% of your unsecured debts and help you repay the outstanding amount without any interest."
  
• Companies That Quote "Write off all your debts in 60 months - from as little as £200 per month"
  
• Companies That Advertise "Lower Your Monthly Payment By 30 to 50%".
  
• Companies That Offer "Debt problems or Money worries, are your struggling with your debt installments"
  
• Companies that offer "One easy monthly payment"
  
• Companies that quote "Debts? reduce your current payments by up to 60%"
  
• Companies that quote " Refused a loan??? We can help you."
  
• Companies that quote " Are your debts over £15000, do you want most of your debts written off?"
  
• Companies that advertise " Debts over £20,000 and struggling - make a fresh start".
  
• Companies that quote " Debt probles solved, reduce payments immediatly by up to 80%"
  
• Companies That quote You An Unusually Low Monthly Payment (this "lowballing" tactic is followed by what is known in the industry as a "bump up letter" once you are a client of these types of companies).
  
• Companies That Require Payment By Money Order Or Cashiers Check.
  
• Companies that say " debt we will take the weight off your shoulders"
  
• Companies that quote "Debt problems we can solve your problems without a loan