Ad ban for debt advice firms highlights problem of misleading claims

Banned adverts for two debt advice firms represent just the tip of the iceberg in terms of how people are misled, a leading advice charity has warned.

The Advertising Standards Authority this week upheld complaints against two firms, National Direct Service and Fidelitas Group Ltd, about misleading claims they made about their services in paid-for search ads and on their websites.

It found the companies had exaggerated the speed and ease with which debt can be reduced, included misleading reviews, and suggested they were linked with StepChange Debt Charity or endorsed by the government.

Although they claimed to be qualified to provide debt counselling, they were just lead generators who passed on people’s details to firms offering paid-for help.

StepChange has identified at least 10 websites associated with the two firms and has other examples of its name being used by advertisers.

This year alone it has already reported eight cases of trademark infringement to internet search engines.

Consumers who get in touch with these firms are often sold individual voluntary arrangements, as there are commercial fees for the companies involved.

The charity said that while these can be a very good solution for some people, and it did recommend them to some clients, they can be high risk and expensive if they fail, so it was important they were not mis-sold.

Richard Lane, StepChange’s director of external affairs, 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.”