Rule Breaking Credit Card Companies Shut Down by Government

The Ministry of Justice (MoJ) has formally shut down companies that offered to secure compensation for personal injury claims or write off debts. From April 2007 to August 2009, one hundred of these companies have been forced to stop doing business.
According to a spokesperson from the MoJ, the companies have been using high pressure sales strategies and making claims that are misleading in an effort to get consumers to pay large fees for their services. The spokesperson told the media that those who are desperate for a way out of debt are especially vulnerable to these tactics and only end up getting further into debt due to the unscrupulous tactics the companies employ. As a result, the government is warning citizens to be careful with offers that appear to be too good to be genuine because that is the lure these businesses use.
According to the MoJ, many of the companies that were shut down used extremely exaggerated claims in their advertising such as claiming that 80% of credit agreements were not enforceable or that debt from credit cards could be totally wiped out within six weeks. Other cases involved companies run by those who had fraud convictions or people ignoring the goverment claims regulator’s request for further information about their advertising claims.
The current regulations for this industry state that no in person cold-calling is allowed and a cooling off period of two full weeks must be given for anyone considering taking on a new credit agreement. This is means that it is better to find IVA (link!), Debt Management Plans (link) or other debt reduction services through a company that allows the customer to request the call by providing their information of their own free will. Instead, many of these companies were making their customers pay huge fees up front, knowing that the customers were already struggling with large debts and that the services they offered to them would not be carried out.
However, plenty of debt management companies still operated within the rules and did not use high pressure cold-calls or unsavory tactics to get the consumer to pay large fees. The Ministry of Justice Claims Management Regulator continues to tackle more cases in an effort to relieve the public of these financial predators, but as long as the claims the companies make are accurate regarding the chances of debt management success and the costs involved for the company’s services, no harm is done.
Hopefully, these companies will either change or continue to be shut down so that the public will be able to get the help they need without fear of fraud.

The Ministry of Justice (MoJ) has formally shut down companies that offered to secure compensation for personal injury claims or write off debts. From April 2007 to August 2009, one hundred of these companies have been forced to stop doing business.

According to a spokesperson from the MoJ, the companies have been using high pressure sales strategies and making claims that are misleading in an effort to get consumers to pay large fees for their services. The spokesperson told the media that those who are desperate for a way out of debt are especially vulnerable to these tactics and only end up getting further into debt due to the unscrupulous tactics the companies employ. As a result, the government is warning citizens to be careful with offers that appear to be too good to be genuine because that is the lure these businesses use.

According to the MoJ, many of the companies that were shut down used extremely exaggerated claims in their advertising such as claiming that 80% of credit agreements were not enforceable or that debt from credit cards could be totally wiped out within six weeks. Other cases involved companies run by those who had fraud convictions or people ignoring the goverment claims regulator’s request for further information about their advertising claims.

The current regulations for this industry state that no in person cold-calling is allowed and a cooling off period of two full weeks must be given for anyone considering taking on a new credit agreement. This is means that it is better to find IVA, Debt Management Plans or other debt reduction services through a company that allows the customer to request the call by providing their information of their own free will. Instead, many of these companies were making their customers pay huge fees up front, knowing that the customers were already struggling with large debts and that the services they offered to them would not be carried out.

However, plenty of debt management companies still operated within the rules and did not use high pressure cold-calls or unsavory tactics to get the consumer to pay large fees. The Ministry of Justice Claims Management Regulator continues to tackle more cases in an effort to relieve the public of these financial predators, but as long as the claims the companies make are accurate regarding the chances of debt management success and the costs involved for the company’s services, no harm is done.

Hopefully, these companies will either change or continue to be shut down so that the public will be able to get the help they need without fear of fraud.

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