OFT cracks down on debt websites
OFT cracks down on debt websites
Monday 9th March 2009
The Office of Fair Trading (OFT) has ordered 11 financial management businesses websites posing as official or charity debt advice sites to shut them down immediately.Companies that were trading without a license will face prosecution if they fail to comply.
The action followed complaints from a number of debt advice charities.
Ray Watson, OFT director for consumer credit said: "The OFT will take action against businesses that use 'look alike' websites to mislead consumers into believing they are dealing with established charitable or not-for-profit organizations."
The offending sites, which use similar or slightly amended domain names that imply the company is an affiliated organization, are often copied from legitimate sites offering free advice, despite the companies involved charging fees.
Some of the website names also imply that they have some official status or sanction from the government.
Organizations affected by the copycat sites include Citizens Advice, Advice UK, National Debtline and the Consumer Credit Counselling Service.
Citizens Advice director of public policy, Teresa Perchard, said: "We are really pleased that the OFT has taken action to close these websites which have been misleading the public by marketing themselves on the back of extremely well known and well trusted charities and government information services."
Ms Perchard added that licensed companies will offer free debt advice, while the look alikes do not.
"In the current economic climate when more people are seeking debt advice, many for the first time, it's vital that the OFT continue to take a hard line with companies deliberately setting out to mislead the public, many of whom may be in unmanageable debt and in urgent need of quality advice," she said.
OFT is warning consumers to be cautious when searching for debt advice online to ensure the site is a genuine charity-based help and advice service – particularly when searching for terms like 'citizens advice' or 'government advice.'
All businesses that hold a consumer credit license are listed on the OFT's consumer credit register, which is available online. Consumers should never deal with traders who are unlicensed.
Mr Watson said: "These unlicensed businesses are unregulated and consumers may have no means of redress if things go wrong."
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