Friday, 11 March 2011

CAB cold-calling complaint threatens legitimate debt management firms

An investigation has been launched by the Office of Fair Trading (OFT), after a major complaint over cold-calling was lodged by the Citizens Advice Bureau (CAB).
CAB claim to have received an increase in the number of complaints reported by consumers, who were persuaded to hand over their bank account details to illegitimate ‘debt management’ firms as a direct result of cold calls.

The OFT said that cold calling by such firms was an ‘emerging unfair business practice’, and that the ‘practice of illegal or misleading cold calling for debt management services must cease immediately’.
However the advisors at debt management firms which do follow the OFT’s guidelines, have expressed concern that the CAB’s super-complaint could lead to vulnerable individuals being less likely to approach debt solutions firms, who could potentially lessen their financial woes.

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Neil Conrad, a regional advisor at Eurodebt Financial Services, said: “I think the super complaint by the CAB, who seem to want the OFT to blanket ban cold calling & up-front fees, is in danger of tarring all companies with the same brush, and could prevent people being contacted by companies such as EuroDebt, who can provide them with genuine help.”

Beverley Budsworth, Managing Director of The Business Debt Advisor, added: “The OFT guidelines on debt management do not permit cold calling by personal visit. If people have opted in or ticked a box that says they want further help, then this is permissible.
“I do hope that the OFT takes a practical approach and stamps out sharp practice but leaves intact compliant debt management companies who genuinely care about improving people’s awareness of the excellent rescue culture we have in this country.”
The OFT’s investigation is currently on-going, but the OFT is expected to publish a response to the Bureau’s complaint within the next 90 days.