Debt Management - Does it look too good to be true? It probably is…

The Advertising Standards Agency has stepped in to take action against two debt management companies, National Direct Service and Fidelitas Group Ltd, in light of a host of complaints over what they are actually selling

At first glance, these companies, and the numerous websites linked to them, seem to be offering consumers a quick and easy route out of debt.

To a vulnerable person who is struggling with debt, a quick and easy solution to their problems can often seem incredibly appealing.

Understandably too.

But we at #TeamCES would always urge caution with things like this and advise that if something seems too good to be true, it usually is.

We are pleased to see that the ASA are taking swift action, because the last thing a person in debt needs, is a hard sell, which is ultimately what these companies were offering, under the guise of ‘easy and effective debt management’.

Companies like these have literally been playing a game with the lives of the people they claim to want to help.

It leaves a bitter taste in the mouth to say the least.

How does it work for them though?

Well, once they’re interested and invested in the idea, metaphorically sold on the solution, consumers are then literally sold commercial voluntary arrangements, which the companies are able to land commercial fees from.

The ASA found that these companies had:

  • Exaggerated the speed and ease with which debt can be reduced

  • Misleadingly suggested associations with a genuine debt charity (StepChange Debt Charity) and/or endorsement by the Government or other third parties

  • Misleadingly suggested that they were qualified to provide debt counselling (including suitability for bankruptcy) or that they did anything more than pass on leads

  • Included misleading reviews and rating claims that did not make clear the risks associated with Individual Voluntary Arrangements

We call them ‘vultures’, although we can probably think of a few different words to describe the people who set companies like this up…

People in debt need real support, real signposting, and ultimately, an effective solution to help them get themselves out of the situation they find themselves in, for good.

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