On Wednesday 27 January, the Advertising Standards Authority (ASA) will publish two rulings which ban misleading ads by commercial debt advice firms. Both these investigations were launched following a complaint by the Money and Pensions Service (MaPS) after it conducted a review of online advertising practices of commercial debt advice / solutions providers.
Caroline Siarkiewicz, Chief Executive of the Money and Pensions Service said: “The Advertising Standards Authority’s (ASA) rulings on the practices of some commercial firms are a positive and welcome development for people struggling with debt, as well as the free debt advice sector which supports these customers.
“Some of the practices deployed by these commercial firms were concerning. For instance, many implied a misleading association with genuine debt advice charities, leading some customers to take up services unknowingly from a commercial organisation when they had been searching for free advice. Other claims made by some firms had the potential to get people to ask for a debt solution that may not be suitable for their circumstances and in some cases require them to pay unnecessary fees.
“The ASA decision has come at a crucial time. This month we anticipate a call about debt every four minutes to the Money Advice Service helpline, and we expect the demand for debt advice to increase over the next 12 to 18 months due to the financial impact of the Covid-19 pandemic. Many people will need support for the first time but also may not know where to begin.
“Just as a doctor reviews a patient’s circumstances in the round before recommending treatment, free debt advisors assess a person’s situation holistically before recommending a debt solution. There are lots of ways out of problem debt. However, many of these commercial firms specialise in providing just one kind of debt solution and cannot advise on the whole range of options available.
“Free debt advice can be life changing for people in difficulty. Our research shows that 63% of customers with debts are reducing or clearing them within 3-6 months after receiving impartial debt advice. Anyone who is worried about debt should seek impartial advice by visiting the Debt Advice Locator Tool on the Money Advice Service website, which will help you find a qualified free adviser in your local area to help you get back on track.”