OFT slams misleading debt management companies

The OFT is reminding debt management companies that they must not use misleading trading names and must make clear that they are commercial enterprises rather than charities or government services.

The reminder follows action by the OFT to refuse an application from Baker Evans Ltd to use the trading names 'The Bankruptcy Helpline' and 'The Insolvency Helpline'. Baker Evans Ltd has the right to appeal this decision to the First-tier Tribunal.

The OFT refused to authorise the use of these names because they could potentially mislead consumers into thinking they are dealing with an impartial, non-commercial or governmental organisations, rather than a commercial enterprise. Consumers need to be able to differentiate between the two.

Ray Watson, the OFT's Director of Consumer Credit said:

"Consumers must be able to distinguish commercial debt management companies from free charitable or government services. We will not agree to names that could mislead consumers into contacting companies when they might think that they are accessing free advice."