Money News
Three firms involved in setting up individual voluntary arrangements (IVAs) for people in debt, have been told by the Advertising Standards Authority to stop making exaggerated claims in their radio and TV adverts. At issue were claims by Accuma, Money Debt and Credit and W3 Debt Solutions, that customers could write-off up to either 75% or 80% of their debts.
An IVA, overseen by an insolvency practioner, involves an individual paying off an agreed portion of debt to various creditors - either in one go, or over a number of years. The creditors in turn agree to write off the remaining debt.
IVAs generally carry less of a social stigma than outright bankruptcy. And there is less chance of you losing your home
In its ruling the ASA said that few customers would be able to achieve the 75% - 80% debt wipeout claimed by the three firms. Hence their adverts were misleading and should not be repeated. Indeed, in future, any adverts should refer to a more realistic level of debt-write off, which a significant proportion of their customers could expect.
The complaint was originally brought rival IVA provider, Debt Free Direct. It claimed the adverts didn't make clear that insolvent customers might have to pay fees for the IVA which would reduce the amount of debt that would eventually be written-off.
12 April 2007 © Moneyextra.com
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