Thirty-five debt management companies have recently shut up shop following a probe found that they were failing to play by the rules, it has been uncovered today.
The debt-management businesses, which offer to help men and women with their financial debt for a small fee, gave up their consumer credit permits after they failed to heed a stern warning from the OFT this past year that they have to clean up bogus practices.
The number constitutes a huge tenth of a sector which is believed to consist of 300-400 trading firms. At the very least 15 more firms are facing licensing action.
The OFT launched its probe last November, after debt management agencies had been accused of using misleading advertising, failing to spell out fees, and having incompetent advisors and also shoddy complaints handling.
The businesses charge indebted customers for advice and also solutions to debt problems. This might include negotiating with debt collectors and credit firms to have interest payments suspended as well as repayments reduced, or perhaps setting up debt payment plans called IVAs (Individual Voluntary Arrangements).
