"Misleading" debt firms shut down

[mr.ton]

'Misleading' debt firms shut down

 

 

The MoJ said some firms falsely claimed to be able to write off debts

 

One hundred companies offering to write off debts or secure personal injury compensation have been shut down by the Ministry of Justice since April 2007. MoJ spokesman Kevin Rousell said they had been guilty of making misleading claims and using high-pressure sales tactics to get people to pay huge fees.

"People desperate for a way out of their financial troubles can be vulnerable," he said.

Consumers were warned to be wary of offers that seem too good to be true.

The BBC's Colette Hume said many claims management firms targeted people who owed large sums to credit card or loan companies.

And with the industry growing quickly it was becoming increasingly difficult to police, she added.

Cold calling

The MoJ said some of the firms shut down had been using misleading advertising, claiming credit card debt could be written off within six weeks or that 80% of credit agreements were unenforceable.

In other cases, companies ignored requests for information from the government's claims regulator or were run by people who had convictions for fraud.

 

There has been a trend towards high-pressure cold calling from call centres

Kevin Rousell, Ministry of Justice

 

Rules state that firms must not cold-call potential customers in person and must allow a cooling off period of at least 14 days for anyone considering taking up an agreement.

But instead, some were found to be forcing already debt-ridden customers to pay large up-front fees only for the service to later fall through.

Mr Rousell said most claims management companies were operating within the rules.

"However, some companies choose to flout those rules and some also target consumers who find themselves in debt," he said.

"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.

"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."

Mr Rousell said claims companies must give customers accurate information about the realistic chances of success and the costs involved in taking up their services.

They must also not pressurise anyone into making on-the-spot decisions or handing over money without properly considering the facts.

Edited August 9, 2009 by mr.ton

[mr.ton]

Sorry folks..it doesnt seem to paste properley, but i still hope you can all understand the above

[Trudy B]

Whilst the MOJ can now be seen to regularly send out warning shots and shut down claims firms from potentially misleading consumers it is a huge shame that the OFT don’t take the same proactive stance with lying cheating ****** DCA’s who tell far bigger porky pies to consumers, harass and falsely threaten them to extract whatever they can day in day out and especially with the ever increasing evidence they now recieve with constant complaints from consumers and even a Channel 4 TV program!

 

T

[mr.ton]

I wonder if the MOJ can have the same influence with DCA's?

If so, then we may be able to start targetting them with complaints instead of the toothless OFT

[cashins]

]Whilst the MOJ can now be seen to regularly send out warning shots and shut down claims firms from potentially misleading consumers it is a huge shame that the OFT don’t take the same proactive stance with lying cheating ****** DCA’s

 

No doubt a lot of [problematic] and fraudsters have jumped on this particular bandwagon and have quite rightly be stuffed.

 

What is a disgrace, is the reaction against a business that if it is operated correctly is perfectly legal, (but a threat to the finance industry) and the **** that work for that same industry.

 

It would seem they know which side their bread is buttered.

 

David

[sillygirl1]

Yes, it would be nice to see the OFT and Trading Standards take the same stance, but of course one of their priorities seems to be 'preserving jobs' in areas where the skillset is minimal - unfortunately an area where call centres exploit their employees....

[babybear39]

Consumers should always be very wary of firms that ask for large up front fees...

[allswell]

Why pay for it when you can get all the information and support on CAG? This is where I got mine and when settled I will gladly give a donation to them to keep up the good work.

[Stephan56]

While it is clearly right to shut down firms that take money with false promises, it is equally clear there is a huge demand from consumers for a "straightforward solution" to getting out from under debts. While a lot of use use CAG, and fight our own battles, there are people that would be prepared to pay for that.

 

The problem is that even the most reputable and honest firm presently cannot guarantee anything.

 

What is needed is a change in the rules. Maybe something along the following:

 

Once a CCA is requested and it is NOT produced within, say, 60 or 90 days, then the alleged debt is BARRED as if statute barred. It cannot be enforced in court, the DCA cannot chase on it, cannot sell it to another DCA etc. It just "dies". I would also like to see rules to say that, if a debt is statute barred, then it could not be chased.

 

These measures would, at a swoop, end a lot of the harassment of which we all complain.

 

Maybe then we coudl see firms spring up woudl could, for a fee, assist debtors (sending out CCA, SARs, etc) and fighting the DCAs who send defective CCAs but still claim they are valid.

 

Needless to say, I am not holding my breath as the government does not seem to have any sense whatsoever of their duty to help debtors - even when chased by DCAs in the most appalling manner. DCAs shoudl not be allowed to persist in chasing unenforceable or statute barred debts. Full stop!

[cashins]

Needless to say, I am not holding my breath as the government does not seem to have any sense whatsoever of their duty to help debtors - even when chased by DCAs in the most appalling manner.

 

Strange but true I'm afraid!

 

David

[Jules55]

I have heard stories of criminal gangs from Eastern Europe hacking into lenders credit depts and deleting credit records/wiping credit peoples credit files clean, even wiping out large chunks of credit data, if true, no wonder the banks are in a mess! Guess it would only be true if you saw onerous files disappear from your credit files,mind you they might even wipe off good credit data and leave you with nothing at all on your credit file lol!

[Massamum]

I have heard stories of criminal gangs from Eastern Europe hacking into lenders credit depts and deleting credit records/wiping credit peoples credit files clean, even wiping out large chunks of credit data, if true, no wonder the banks are in a mess! Guess it would only be true if you saw onerous files disappear from your credit files,mind you they might even wipe off good credit data and leave you with nothing at all on your credit file lol!

now that WOULD be worth paying for :grin:

[Jules55]

I guess so, I expect that's why these gangs are operating, wiping onerous debts wahtever next lol!

[Huff&Puff]

It was on BBC "You & Yours" today. You can listen to it here:

 

BBC - Radio 4 You and Yours - Monday