Debt firms rocked by marketing ban

Debt management and advice firms risk losing their licences if they persist in using unsolicited marketing techniques – whether by text, telephone or online – following a major clampdown by the Office of Fair Trading (OFT).
The move follows a top-level industry summit – bringing together the OFT, the DMA, the Ministry of Justice, Citizens Advice, Ofcom and the Information Commissioner’s Office – to tackle the aggressive practices of companies in the sector.
Following this the OFT launched its own investigation, which has led to the publication of new guidelines on what companies should do to avoid action.
“Before using Internet based and social media marketing, licensees should consider whether they can exercise adequate control over its content, whether it is an appropriate medium and whether the appropriate information, warnings and caveats, can be included sufficiently prominently, such that the information conveyed is sufficiently legible, accurate, truthful and not misleading,” the OFT said in its guidance.
The regulator said it would be unlikely that debt management companies could to use search engine sponsored links, certain contextual adverts and online messaging forums which limit the number of characters” to offer services.
This is because the platforms probably would not provide consumers with “sufficiently balanced and adequate information on how to deal with their debt problems”.
“Licensees should therefore take appropriate care to ensure that when promoting themselves or their products or services in this manner, the information conveyed, in isolation, is accurate, truthful and not misleading,” it said.
The OFT said companies which send unsolicited marketing text messages, emails or voicemails will be considered to be engaging in an unfair practice.
It conducted a review of the industry in 2010 and since then has issued 129 warnings to debt management businesses over their behaviour.
“Since then, 87 businesses have exited the market, either voluntarily or as a result of enforcement action, and a further 67 warning letters have been issued,” the regulator said.