The OFT is said to be cracking down on so called rogue debt advisors, and according to reports at least five of the companies that are said to be involved in this face having their operating licences revoked by the Office of Fair Trading. The OFT has been cracking down on companies that are said to be involved in misleading advertising, hidden costs, and offering poor advice to the many desperate consumers that are anxious to sort their financial problems out.
It is thought that the OFT is also set to crack down on firms that cold call consumers to try and get them to take out a debt management plan or similar financial service, and then sell their details on as leads to debt advice companies. The watchdog is said to be planning a blitz on such firms in the New Year, and plans to come down hard on firms that are seen to be rogue traders in the financial services industry. Debt advice companies that take leads from cold calling firms based abroad will also be at the receiving end of the OFT’s wrath if they are caught out.
According to reports there are eight hundred firms in the UK that have licences to offer debt advice, and earlier this year the OFT wrote to 129 of them to express concern over their working practices. In 50 percent of these cases the problems outlined by the OFT were said to be minor ones. However, in a small percentage of the cases the issues outlined were said to be extremely serious.
Some of the problems that have been highlighted include failure of companies to review customer files, employment of untrained advisors who cannot offer sound advice and information, and advising customers that a service is free when it is not.
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