UK Government Shutting Down Unsavory Debt Management Companies

In the United Kingdom, the Office of Fair Trading has come out swinging against predatory debt management companies that have been deemed unscrupulous due to their practices of taking advantage of those who are facing rough financial times. Consumers with nowhere to turn had put their trust in these companies, nearly 130 of which were sent warnings by the OFT in September of 2010. Now, close to three dozen of those firms have been forced to hand over their licences for handling consumer credit.

A probe the OFT has taken into this particular market has meant that 15 such companies actually warrant criminal investigations for their activities that some in the British media have called ’shameful’ and ‘confounding’. More firms are being thoroughly sniffed out by the OFT in regards to their business practices and adherence to UK business ethics. This checking into the market that is supposed to be helping cash strapped consumers reorganise their debts was done as a way to find out if the companies were complying with UK regulations and sadly, many have not been.

Financial experts say that the best debt management firms will still be in business, unlike those which had resorted to targeting consumers with phone calls from sales people trying to get them to sign up for services. Those with debts might have at first recoiled from the high pressure sales tactics, but the burden of debt often puts people in a vulnerable position and having the phone ring for something other than a collections agency can even be a bit of respite that offers hope. These tactics are certainly frowned upon by most in the UK as less than savory at best or down right predatory at worst.

Banks have been vocal in their criticism of these unscrupulous firms, particularly the way the firms would attempt to persuade UK consumers to neglect paying off loans without a proper warning of what the results of that route could be. Proper debt management firms, none of which have been found in violation by the OFT, have strict guidelines on keeping their clients fully informed of the results that any action can bring because their business is based on improving lives, not grabbing up money at the expense of clients and lenders alike.

Overall, debt management firms continue to provide valuable service to those with debts in the UK, however, experts are quick to point out. Now that the schemers are being driven from the market, it will be far safer for British debtors to choose a firm they know they can depend upon for help resolving their personal debt issues.