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Don’t fall for companies who claim ‘we can get your debts written-off’

Thursday, 28 January 2010 Writes Hazel Cottrell hazel.cottrell@consumerchoices.co.uk

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Consumers should be wary of companies telling them they can ‘write-off’ their debts, says Office of Fair Trading.

Brits need to be wary of debt avoidance companies that promise to help them get their debts written off using legal loopholes, as these claims may be unfounded.

Some debtors are being misled into thinking that they can get their debts written off.

The Office of Fair Trading (OFT) is taking steps to issue new guidance, and warned: “Some debtors are being misled into thinking that sections [of the Consumer Credit Act 1974] can be used to get their debts written off.”

One of the OFT’s main draft guidelines makes it clear to consumers that the company they borrowed from would be entitled to be repaid even if it could not produce a signed copy of the credit agreement.

The company needs to produce an accurate copy of the original agreement when requested, but it does not need to be signed.

The guidelines also make it clear that if a lender cannot provide this document – making the agreement unenforceable – it can still request repayment and record any arrears with a credit reference agency, but cannot threaten court action.

The deadline for responses to the OFT’s draft guidelines is 21 April 2010.

Chris Eagle, commercial manager at Creditchoices.co.uk, advised: “If you’re struggling with debts, the brash claims of debt avoidance companies may seem appealing.

“However, they often charge high upfront fees, and as the OFT has illustrated, many of their claims are unfounded.”

He advised anyone worried about debt to contact one of the following organisations for free, independent debt advice:

The Citizens Advice Bureau (www.citizensadvice.org.uk) offers confidential advice by phone and face-to-face. Visit the website to find your local CAB
The National Debtline (www.nationaldebtline.co.uk) provides information and resources for coping with debt on their website as well as a helpline on 0808 808 4000
The Consumer Credit Counselling Service (www.cccs.co.uk) offers advice, support and counselling for anyone who is worried about debt. You can call the helpline free on 0800 138 1111.