Debt sale scam warning

Tuesday, 23 June 2009 06:00

Consumers are warned not to be scammed by businesses claiming to help them become debt-free by 'selling on' their debts.

The Office of Fair Trading (OFT) said there has been "a significant increase" in adverts on the internet and in newspapers from companies claiming they can take over a debt by buying the customer's credit agreement.

But this would be illegal, the OFT said, and customers are warned that if they pay for this service, they will still be liable for the original debt.

Ray Watson, OFT director of credit, said: "Like most scams, when something looks too good to be true, it usually is, and this is certainly the case here.

"You cannot simply sell on your debt and its liabilities, and businesses that make misleading claims to the contrary are just trying to take advantage of consumers' distress."

The OFT will take "swift action against businesses which deliberately mislead consumers," Mr Watson added.

Fiona Hoyle, spokesperson for the Finance & Leasing Association (FLA), added: "The FLA has been working with the OFT and the Ministry of Justice to stop claims management companies making misleading claims, which often leave vulnerable consumers worse off.

"Anyone who has a debt problem should speak to their lender, or seek free debt advice from a charity such as CCCS, Citizens Advice or National Debtline."

Consumers can check whether a business holds an appropriate consumer credit licence by searching the OFT's online consumer credit register.

• Tags:
• debt management
,
• loans
,
• news