You are here: Home - Credit Cards & Loans - News -

Misleading debt advice adverts banned

Written by: Emma Lunn
The Advertising Standards Authority (ASA) has upheld complaints against two debt lead generation firms.

The regulator ruled that National Direct Service, trading as Step Debt Support, and Fidelitas Group Limited were both found to have breached advertising rules and knowingly mislead consumers.

Complaints were made to the ASA by the Money and Pensions Service about the firms which both claimed they could set up individual voluntary arrangements (IVAs) and reduce people’s debts.

The ASA found that the Step Debt Support advert misleadingly suggested associations with the StepChange Debt charity and the government. It also found that wording in the advert suggested Step Debt Support was authorised to provide debt counselling. This wasn’t the case as the company sold on debt leads to third parties.

Fidelitas Group’s adverts were banned for a number of misleading claims, including suggesting it was endorsed by the government and also wrongly saying it was qualified to provide debt counselling.

The ASA said both firms also suggested the services they offered were free when, in reality, they weren’t.

Genuine debt charities have raised concerns that misleading advertising by lead generators is putting people at risk of being pushed towards potentially inappropriate debt solutions.

Richard Lane, director of external affairs at StepChange Debt Charity, said: “People who need help with their debts need advice, not a hard sell. It’s clear that there’s a need for better protection to prevent people being hoodwinked into thinking they are dealing with a debt advice charity, when in fact they are simply being lured to provide their personal details to lead generators working on behalf of commercial IVA factories.

“The ASA has confirmed what we already knew: there is a lot of misleading advertising out there, including from outfits impersonating legitimate debt advice organisations.”

StepChange is calling for regulators to examine how firms which provide IVAs acquire their customers, so that people get better advice about all their possible options for dealing with debt before making a premature decision.

Caroline Siarkiewicz, chief executive of the Money and Pensions Service, said: “Some of the practices deployed by these commercial firms were concerning.

For instance, many implied a misleading association with genuine debt advice charities, leading some customers to take up services unknowingly from a commercial organisation when they had been searching for free advice. Other claims made by some firms had the potential to get people to ask for a debt solution that may not be suitable for their circumstances and in some cases require them to pay unnecessary fees.

“The ASA decision has come at a crucial time. This month we anticipate a call about debt every four minutes to the Money Advice Service helpline, and we expect the demand for debt advice to increase over the next 12 to 18 months due to the financial impact of the Covid-19 pandemic. Many people will need support for the first time but also may not know where to begin.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Big flu jab price hikes this winter: Where’s cheapest if you can’t get a free vaccine?

Pharmacies, supermarkets and health retailers are starting to offer flu jabs ahead of the winter season, but t...

Is now the time to fix your energy deal?

Fixed energy tariffs all but disappeared during the energy crisis. But now they are back with an increasing nu...

Everything you need to know about the pension triple lock

Retirees are braced to receive another bumper state pension pay rise next year due to the triple lock mechanis...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

The best student bank accounts in 2023: Cash offers, tastecards and 0% overdrafts

A number of banks are luring in new student customers with cold hard cash this year – while others are compe...

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Money Tips of the Week