Crackdown on Trust Deed Advertising

8th September 2010

Traditionally Trust Deed and Debt Advice organisations have marketed their “free advice” and “free help-lines” to individuals seeking assistance with their debts.

The Advertising Standards Agency has now ruled that this is no longer allowable if any part of the service offered by that company would attract charges.

The effect of this will be that any Trust Deed agent who charges a client a fee for introducing them to an Insolvency Practitioner for a Trust Deed, will no longer be able to advertise their service as being “free”.

Such a ruling by the Advertising Standards Agency follows pressure from the Office of Fair Trading on consumer credit licence holders to meet a similar standard in order to comply with the OFT’s Debt Management Guidance.

This ASA ruling appears to be a useful first step in ensuring that anyone considering a Trust Deed receives an honest summary of the services provided by companies in this market.

It remains to be seen whether the move into advertising transparency will continue and move further to deal with other types of concern that are now arising.

In particular a number of “Trust Deed Comparison” websites seem to be appearing which promise to save people money on their Trust Deed. Some such websites offer “Quotes” to people seeking a Trust Deed.

An investigation of the small-print regarding the “savings” on offer seems to indicate that the comparison is actually been made against how much the Trust Deed would have cost if somebody had decided to use an expensive agent (who charged up-front fees) to pass the case to a Trust Deed company.

The “savings” on offer certainly do not apply if choosing between Trust Deed companies that a person were to approach directly. However it would be very easy for a visitor to such a website to fail to understand this, given the way that the information is presented.

The concept of a website providing a “Trust Deed Quote” is fanciful at best and deceitful at worst. A Trust Deed company is expected to work through the circumstances of an individual in significant detail before they go ahead with a Trust Deed. They have a legal responsibility to collect as much as can reasonably be afforded by the debtor, to help repay the creditors.

As such a “Trust Deed Quote” or “Trust Deed Comparison” website captures only basic client information. It simply cannot provide a genuine quote and visitors risk being misinformed as a result.

The Advertising Standards Agency seems to have taken a useful first step but there remains a great deal of room for improvement in the way that Trust Deeds and debt solutions in general, are marketed by certain operators.

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