Three more debt management firms have felt the wrath of the Office of Fair Trading (OFT) as its crackdown on the sector continues.
The latest round of wrist-slapping comes just a month after the OFT warned companies collecting consumer credit debts that they must communicate clearly and fairly with consumers and not mislead.
Backing up its word with action, the OFT has stopped London-based Money Advice Direct Limited from using its existing trading name, The UK Insolvency Helpline, because it fails to make clear to consumers the commercial nature of the business.
The firm has also been banned from using proposed domain names that include the word 'helpline' for the same reason.
At the same time, the office revoked the licence of Prime Legal and Financial Services of Mile End, London for failing, amongst other matters, to demonstrate the necessary skills, knowledge or experience to hold a consumer credit licence.
Meanwhile, Midlothian-based Deric Hamilton Oliver has had his application for a licence rejected on the basis that he provided the OFT with false information.
Its enquiries found Mr Hamilton Oliver had provided debt management services even though he was aware he did not have a licence.
In the past year, the OFT said 61 businesses have had their licences revoked, or have surrendered their licences, or had an application refused.
"We expect commercial debt management businesses to meet the standards that we set out in our guidance," said David Fisher, the OFT's director of consumer credit.
"If they do not, we will take action as we have demonstrated here.
"Revised debt management guidance, which is due to be published before the end of the year, will give even greater clarity as to the standards that the OFT expects of businesses that it licences in this sector."
Only last month, the Citizens Advice Bureau called on the Government to get tough with fee charging debt management firms.
The charity said that many vulnerable people are being exploited by companies that charge people for services that are often available for free.
Excessive fees, offering inappropriate debt solutions and forcing people further into debt were amongst a number of poor practices that the charity cited as being common within the industry.
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