The guidance offers more detailed examples of ‘unfair or improper practices’ including sending unsolicited emails or text messages, providing unsuitable cash incentives to staff and falsely representing the business. One example of false representation offered is operating websites, which look like the website of a charity or a government body.
Businesses are also expected to refer consumers to not-for-profit advice organisations for further help, in certain circumstances, and to have effective measures in place to identify and deal with particularly vulnerable clients, so those with mental issues.
Transparency is the overarching theme of the guidance, with the OFT keen to get consumers all the information necessary on the most appropriate debt solutions.
The guidance follows heavy enforcement action after widespread concerns over the quality of advice, marketing practices and advertising in the sector.
Then, the OFT issued 129 warnings to debt management businesses and 87 businesses have exited the market, either voluntarily or as a result of enforcement action, and a further 67 warning letters have been issued.
David Fisher, director of the OFT’s Consumer Credit Group, said: “This new guidance clearly sets out the standards we expect from debt management businesses. All too often it may be particularly vulnerable consumers who fall victim to poor quality debt advice.”
For the new guidance, click HERE
