Unenforceable credit agreement claims

The Office of Fair Trading has recently warned of bogus claims management companies who are offering to buy consumers debt. Some firms ask for a payment upfront for the service but the fact remains that the debt still belongs to the consumer and the consumer has to face up to the consequences of the debt not being paid.  

The Ministry of Justice have been responsible for regulating Claims Management companies since April 2007 and have recently started to crack down on those who don't play by the rules.  Twenty eight financial claims firms have had their authorisation removed since January this year and a further three have had their authorisation suspended.  

"Claims management companies lack of experience with unenforceable credit agreements, could land consumers in deeper financial trouble and even land them in court" that's the view of of the Managing Director of a claims management company, reported yesterday.  Offers promising to wipe out debt seem to good to be true and when somehting seems to good to be true, that's usually the case.

A governement approved scheme to reduce debt does exist in the form of an Individual Voluntary Arangement but these are only suitable for people who do not have enough money to cover their existing outgoings.  

For unbiased, free, confidential help on how to reduce debt visit our debt help section

Dan Gale, Moneyextra.com

2009-07-21 10:27:53 © Moneyextra.com

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