5:17pm UK, Friday January 28, 2011
The Office of Fair Trading (OFT) has announced that it has revoked the operating licence of 35 debt management firms as they failed a compliance review.
Debt management firms lost licences due to misleading advertising and other failings
The OFT originally issued a warning to 129 firms in September 2010.
The warning followed a sector review which found widespread problems throughout the debt management industry.
Trading Standards Officers found the most significant failing was misleading advertising particularly in relation to the fees charged by each company.
Many firms engaged in advertising campaigns which led the consumer to believe their services were free when they were not.
The officers engaged in a "website sweep and a mystery shopping exercise" to uncover the problems in the industry.
They discovered that many firms supplied insufficient or poor advice and employed advisers who were "lacking in competence".
It was also stated that there was a low awareness in the industry of the Financial Ombudsman Service (FOS) rules for dealing with consumer complaints.
A further eight debt management firms have been informed that the OFT intends to revoke their licences.
Ray Watson, Director of the OFT's Consumer Credit Group, said: "We are determined to improve standards in this sector, as the failings indentified by our review are unacceptable.
"Companies providing debt management services should be in no doubt that we will act against bad practice and ensure consumers are protected."
No hay comentarios:
Publicar un comentario