OFT cracks down on
debt industry

An investigation aiming to assess the quality of service offered by the debt industry has been launched by the Office of Fair Trading (OFT).

The move follows a tightening-up of procedures and regulations governing the sector, with as many as 24 companies being prosecuted since the guidelines were made tougher in April 2008.

OFT officials say the investigation will focus on the practices and adverts used by debt management firms, with particular attention being paid to the alleged mis-selling of policies.

The organisation has also warned the industry against illegally cold-calling consumers and setting up websites to look as though they are run by the Government or charities.

Debt management firms themselves will be asked to complete an online questionnaire and consumers who want to complain about a firm will also be given the chance to have their say.

Ray Watson, OFT director of consumer credit, said: "This review will help us identify those practices that are harming consumers, as well as the reasons for non-compliance, and will help us target our enforcement action."

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