OFT warns debt management businesses over cold calling

The OFT has told six debt management businesses and four cold-calling companies to stop using unsolicited and misleading calls to advertise their services or face formal enforcement action.

The action has been taken after the OFT and the Information Commissioner's Office received complaints from consumers that they had been cold-called either without prior consent or despite registering with the Telephone Preference Service (TPS). The OFT also found that most of the information given to consumers was potentially misleading or inaccurate, or missed out vital facts about the purpose of the call and the identity of the caller, for example:

some calls misled consumers into believing that they were one of the 'few chosen individuals' contacted as part of a government scheme to help wipe out consumer debt;

some recipients were transferred to a commercial debt management business on the pretext of talking to a not-for-profit debt adviser; and

once referred to a different business, consumers were often not told that there was a fee payable for both the initial advice and the debt solutions offered.

The businesses warned today may also have broken the law by pestering individuals who had not given their consent to be called and/or who had registered to the TPS.

Nigel Cates, Deputy Director of Consumer Credit, said: 'Taking advantage of people who are suffering distress through debt problems is completely unacceptable and this practice of illegal or misleading cold-calling for debt management services must cease immediately. The current economic climate means that it is vitally important vulnerable consumers are protected. We will not hesitate to take action against any business that uses misleading calls to advertise debt management services.'

Mick Gorrill, Assistant Information Commissioner at the ICO, said: 'Under the Privacy and Electronic Communications Regulations (PECR), organisations should not make automated marketing calls without the prior consent of the subscriber. The ICO has received a large number of complaints about automated marketing calls promoting debt management schemes. We have worked closely with the OFT on this issue and welcome the action taken.'