Misleading adverts by debt companies banned in ASA rulings

Misleading adverts by debt advice companies have been banned in two rulings published by the Advertising Standards Authority (ASA).

Both investigations were launched following a complaint by the Money and Pensions Service (MaPS), after it reviewed the online advertising practices of those providing commercial debt advice and solutions.

The rulings are part of wider work by the ASA and other organisations to identify areas of consumer detriment online so that action can be taken against misleading adverts.

The ASA said National Direct Service had a paid-for internet search advert and a website ad banned for exaggerating the speed and ease with which debt can be reduced, with claims including: “Lower your debt today,” and for misleadingly suggesting associations with a debt charity and the Government.

The ASA considered that the phrasing: “Step to Change” which was used may misleadingly indicate to consumers an association with StepChange Debt Charity, which offers free debt help.

The matter has also been referred to the Committee of Advertising Practice’s (CAP) compliance team, which may take further action if necessary.

And Fidelitas Group Ltd has had five paid-for internet search ads and a website ad banned for misleadingly suggesting its service is endorsed by Government bodies and for suggesting they are qualified to provide debt counselling despite not being authorised by the Financial Conduct Authority as experts in this field.

The ASA said both companies’ ads also made misleading reviews and rating claims and did not make clear the risks associated with IVAs (individual voluntary arrangements), which are a formal type of personal insolvency.

Caroline Siarkiewicz, chief executive of the Money and Pensions Service, said: “The Advertising Standards Authority’s rulings on the practices of some commercial firms are a positive and welcome development for people struggling with debt, as well as the free debt advice sector which supports these customers.”

She said there were risks that consumers may end up taking up services unknowingly from a commercial organisation when they had been searching for free advice. They may end up paying unnecessary fees, she said.

She continued: “The ASA decision has come at a crucial time. This month we anticipate a call about debt every four minutes to the Money Advice Service helpline, and we expect the demand for debt advice to increase over the next 12 to 18 months due to the financial impact of the Covid-19 pandemic.

“Many people will need support for the first time but also may not know where to begin.

“Just as a doctor reviews a patient’s circumstances in the round before recommending treatment, free debt advisers assess a person’s situation holistically before recommending a debt solution. There are lots of ways out of problem debt.”

But she said many commercial firms “specialise in providing just one kind of debt solution and cannot advise on the whole range of options available”.