Warning over misleading debt firm names
Businesses providing paid-for debt advice should avoid using misleading trading names such as 'Helpline' or 'Debtline', the Office of Fair Trading (OFT) has said.
The regulator has launched a crackdown on commercial debt agencies using names that may imply they are a charity or government body.
It says customers need to be clearly informed if they'll have to pay for services and companies must not seek to mislead consumers who are looking for free, impartial or public sector advice.
Names such as 'Cheap Loans For All' is an example given by the OFT of a business implying that credit is available for any consumer, regardless of their financial situation.
Those companies advertising claims such as 'no interest', or 'lowest UK prices' will also be challenged and their claims will only be accepted if there is proof the description matches the products on offer.
"Businesses are free to choose trading names as long as they are not misleading or otherwise undesirable. For example, where they do not make clear the nature of a business or where it pretends to be something it is not," says David Fisher, director of consumer credit at the OFT.
Consumer groups have welcomed the move and Adam Scorer, spokesperson for Consumer Focus, says: "This is a sensible tightening of a loophole that seems to be deliberately exploited by unscrupulous traders.
"Companies trading to make a profit should not be able to mislead consumers by calling themselves a helpline or any similar title. This is a common sense move that will help reassure consumers."