insolvencyhelpline.co.uk - Warning and requirements imposed by OFT

fermi

As many people know MADL (under the guise of the insolvencyhelpline.co.uk) does it's best on it's website to give the impression that it is an officially run and impartial advice service.

In fact, it's just a front for a lead generation firm.

Seems that the OFT have finally taken action to address this.

http://www.oft.gov.uk/news-and-updates/press/2011/22-11

OFT imposes requirements on debt management lead generation firm

22/11 22 February 2011

The OFT has imposed requirements on Money Advice Direct Limited (MADL) to address concerns about misleading advertising by the business.

MADL is an OFT licensed lead generation firm that operates by introducing people to debt management plan and Individual Voluntary Arrangement (IVA) providers via its website.

The OFT was concerned about false statements and misleading content on the company's website. It is the OFT's view that this content encouraged consumers to believe that MADL was a not for profit organisation providing debt management solutions, rather than a commercial business acting as a lead generation company that passes contact details to debt management companies in exchange for a fee.

The requirements imposed on MADL set out that its advertising content across all media types, including its website, must:

• make it very clear to consumers that the company does not provide or administer debt solutions
• provide consumers with adequate information about the service being offered
• not imply that the service is impartial or independent
• make its commercial status clear and not give the impression through any of its advertising that it is a charity or a publicly funded body, and
• ensure advertising of its debt management services is consistent with the standards set out in the OFT's Debt Management Guidance.

MADL must also ensure that its compliance with the requirements above is independently audited and that evidence of this is sent to the OFT.

Separately, the OFT is also taking action to seek to compulsorily vary the company's existing trading name 'The UK Insolvency Helpline' and to refuse its application to add the trading names 'www.ivahelpline.co.uk' and 'www.insolvencyhelpline.co.uk' to its licence. This action is subject to final determination by an OFT Adjudicator.

The OFT's Director of Consumer Credit, Ray Watson, said:

'It is important that consumers seeking help for debt problems know who they are dealing with and whether the company is providing an actual service or is simply a lead generator. We would advise anyone in financial difficulty to seek free debt advice or check whether the company they are in touch with is a member of the Debt Management Standards Association (DEMSA), which has an OFT accredited code.'

NOTES

1. Download MADL's requirements (pdf 47kb).
2. Under the Consumer Credit Act 1974, where the OFT is dissatisfied with any matter in connection with a business, a proposal to carry on a business or any other conduct by a licensee, associate or former associate, the OFT may impose 'requirements' on the licensee. Requirements may require a business to do or not to do (or to cease doing) anything specified for the purposes connected with addressing the OFT's dissatisfaction, or securing that matters of the same or a similar kind do not arise.
3. The action noted above in relation to the company name will be determined subject to any representations made to an OFT adjudicator.
4. The OFT expects all those who provide debt advice and/or management services to adhere to the minimum standards, particularly those relating to advertising, outlined in its debt management guidance (the Guidance) published in 2001 (updated September 2008).
5. In September 2010, the OFT published its debt management compliance review findings and announced that it had warned 129 businesses that they must improve standards. The OFT announced in January 2011 that 35 firms had surrendered their licence and that at least 15 were facing licensing action as a result of the compliance review.
6. A breach of a requirement can lead to a fine of up to £50,000 and/or be grounds for revocation of a consumer credit licence.

RAS

goodie

They have started to wake up.


I look forward to a few more lead generation companies going the same way (I have a favourite "free advice" provider in mind).