The Debt Advice Centre

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100 claims companies cancelled as crackdown continues on firms who mislead the public

2009-08-10

Misleading claims that debt can be written off as unenforceable, high pressure selling and cold calling in person will not be tolerated – tough message from Claims Management Regulator as 100th company cancelled. Companies’ authorisations have been cancelled for failure to comply with the claims regulation conduct rules, including ignoring requests for information from the regulator, criminal convictions for fraud, persistently misleading marketing and non-payment of regulation fees. Head of Regulation at the Ministry of Justice, Kevin Rousell, said: ‘The majority of claims management companies registered with the Ministry of Justice are operating within the rules. ‘However, some companies choose to flout those rules and some also target consumers who find themselves in debt. People desperate for a way out of their financial troubles can be vulnerable to the misleading marketing that the Ministry of Justice Claims Management Regulator is continuing to tackle. ‘People may have paid large up-front fees for a service that doesn’t live up to the marketing hype, and in the case of debt-related claims find themselves still liable to pay all their debts in full. There has also been a trend towards high pressure cold calling from call centres, including making unsubstantiated claims and encouraging people into handing over fees there and then – a decision they regret later. ‘It is important that consumers make fully informed choices about whether to make a claim and whether to use the services of the company that has approached them. Consumers must be given clear information about the options available for pursuing their claim, realistic chances of success and the costs of doing so. ‘One hundred companies cancelled so far sends a strong message that if consumers aren’t treated fairly, there will be consequences for the companies. We will be continuing to step up the strong action needed to deal with those claims management companies found be disregarding the rules and the interests of the public.’ Top tips ‘Credit cards written off within six weeks!’ ‘80% of credit agreements are unenforceable.’ ‘We can write off all your outstanding debt.’ Been approached by a company offering the promise of wiping your debts by challenging their enforceability? Remember these top tips: DON’T be pressurised into making any on-the-spot decisions – take time to consider your options. DON’T hand money over there and then – get full written information from the business about the service they are offering, what it will cost and the time it will take before paying anything. The business is required to provide this. DO contact an independent adviser – such as Citizens Advice, who can advise you on the best way to deal with financial problem and complaints. DO check that the claims company is registered at the Claims Management Regulation website – if it provides debt advice services it is likely to also need a consumer credit licence issued by the Office of Fair Trading, check the Office of Fair Trading's Public Register. DO report any concerns you may have about a business, by email or by calling the claims management anonymous reporting hotline line on 0333 200 0110.