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OFT takes enforcement action against debt solution providers
6th February 2011
In 2010, the OFT launched a broad investigation into the UK debt management industry. The scope of their investigation focused upon those companies involved in various stages of the trust deed process, including the provision of advice and referrals to certain trust deed providers.
They identified wide spread concerns which led to 129 enforcement notices being sent to the companies concerned, demanding proof to be provided that changes to meet compliance expectations had been implemented.
The OFT have now reported that 35 debt solution providers have surrendered their consumer credit licences rather than make the changes. Eight companies have been informed by the OFT that their licenses are to be revoked. Seven companies failed to respond and now face further investigation. 79 debt solution companies have submitted evidence which is now subject to review by the OFT.
A strong message has been sent to UK debt solution providers, including trust deed providers and trust deed introducers, that high standards are required in order to continue trading in the market.
Anyone considering commencing a trust deed is advised to take note of the major issues originally identified by the OFT investigation:
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Some advisers were found to be incompetent. Anyone seeking a Scottish trust deed is therefore encouraged to confirm whether any advisor they work with is properly professionally qualified to help.
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Some companies were found to put profit before proper advice. Therefore readers are advised never to pay upfront fees to any company prior to signing a trust deed.
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Misleading advertising has also caused problems. Any website that focuses heavily on the benefits of a protected trust deed without taking equal trouble to explain the potential negative aspects should be treated with great caution.
A protected trust deed remains an effective and suitable solution for many people to deal with debts they can no longer afford to maintain. However, taking time to find reliable advice from a reputable source remains vital, no matter how urgent the pressure of the debt may seem.
For further advice from a trusted source, please scan the headings of articles on our Trust Deed Advice Forum and read those which you feel apply to you. You can also chat to other people who have been through, or are in the process of going through similar financial difficulties.
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