We have today published two rulings involving commercial debt advice companies, National Direct Service and Fidelitas Group Ltd who made various misleading claims, in paid-for search ads and on their websites, about their services. We’ve taken this action in response to complaints from the Money and Pensions Service (MaPS) following its review of advertising practices by providers of commercial debt advice / solutions.
In summary, we have banned several ad claims by both advertisers that:
- 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
The rulings form part of our ongoing work with a range of partner organisations to identify areas of consumer detriment online and to take action against misleading and irresponsible ads. We encourage anyone with concerns about debt advice ads to get in touch so that we can assess things for them.
And as part of our work with MaPS, they have provided the following helpful tips for people with debt worries:
- Open up to someone. Talking about money can be challenging because of feelings of shame, embarrassment or not wanting to burden others. However, opening up to someone can be an important first step to help you regain control of your finances. Research has also shown that people who talk about money feel less stressed or anxious and more in control
- Work out your debts. Write down everything that you owe. This might seem overwhelming but facing up to what you owe will help in the long run
- Pay debts in the right order. Make sure to pay priority bills and debts such as mortgage, rent and energy payments before secondary debts like overdrafts, personal loans, credit cards and Buy Now Pay Later (BNPL) arrangements.
- Avoid high-cost credit. While it can be tempting to use high-cost credit options like payday loans, if you do need to borrow, then shop around and consider more affordable options like credit unions.
- Set a budget. A good way to understand how much you can afford to pay back each month is to write down what your income is and list all your expenditure. The budget planner on the Money Advice Service website can help you calculate this.
Anyone experiencing debt problems should also contact a reputable debt advice organisation, for instance by using the Debt Advice Locator Tool, and should check they are not being misled into thinking they are contacting a debt advice charity by adverts using similar names. StepChange, for example, was being mimicked by National Direct Service in its ad which the ASA ruled was misleading. StepChange Debt Charity provides a comprehensive debt advice service, from budgeting tips through to managing debt solutions that enable people to pay off or clear debts. All its debt advice is available for free by phone or on its website.
Commenting on the rulings, ASA Director of Complaints and Investigations, Miles Lockwood said:
“The misleading ads by these commercial debt advice firms are unacceptable at any time but given the current economic downturn, with lots of people throughout the UK under significant financial pressure or stress, it is especially important that we tackle ads of this nature wherever they appear. No-one seeking free help and advice with debt should be hoodwinked by an ad into thinking they’re using a genuine debt advice charity when that is not the case.
We welcome the Money and Pensions Service working with us to identify bad ads in this sector. We have some ongoing investigations involving other commercial debt advice firms, the outcomes of which we’ll publish soon, and we’ll continue to take action where consumers are being treated unfairly and misled.”
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.
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.”