Posted June 23, 2022
The Money Advice Trust has welcomed the Committee of Advertising Practice’s (CAP) new Enforcement Notice, published today, about debt management ads by insolvency practitioners and lead generations companies. The notice recognises the potential for misleading ads to cause serious detriment as they are targeted at vulnerable consumers with debt problems, and commits CAP to take enforcement action where its rules are not followed.
These ads often appear when searching online for ‘debt advice’ with promises to ‘write off your debt’ and with claims, such as ‘government-backed’. The issue also includes websites appearing to pass themselves off as free, debt advice charities, including National Debtline – an area set out in the notice that CAP aims to address.
Today’s announcement follows on from several rulings by the Advertising Standards Authority (ASA) about Individual Voluntary Arrangements (IVAs) ads. In a ruling from December 2021 the ASA found that the company involved had misled consumers by suggesting that they were affiliated with the free debt advice charity National Debtline and endorsed by the UK government.
Whilst welcoming today’s announcement, the Money Advice Trust is calling for further steps to be taken on what it sees as a regulatory gap between the FCA’s powers, and the Insolvency Service’s rules that allows these types of debt advert to appear. The charity is calling for the FCA and the Insolvency Service, building on the work of the ASA and CAP, to act together to stamp out this problem once and for all.
“Today’s announcement from the Committee of Advertising Practice is welcome and shows how seriously CAP and the ASA are taking the issue of misleading debt advice ads. These misleading ads have become far too common and pose a real risk to anyone in financial difficulty – and I am pleased to see today’s notice backed up by a commitment to take action against those who breach the rules.
“However, there is more work to done. There remains a gap between the FCA’s powers, and the Insolvency Service rules that allow these debt adverts to appear in the first place.
“I would encourage anyone who sees a misleading debt advice advert to report it to the platform it appears on and to regulators. We have produced a short online guide on how to do this.”
The Money Advice Trust’s short guide on how to report misleading ads to search engines and social media and details of how to complain to the ASA and other regulators can be found here.