The Office of Fair Trading (OFT) has issued a warning to consumers over misleading adverts that claim you can write off debts by using loopholes in legal legislation.
Lenders and borrowers have been issued with guidance by the OFT and states that consumers should aim to pay off debts from loans and credit cards through the proper channels rather than trying to avoid them.
A landmark High Court case in December verified that lenders did not have to produce the exact loan agreement when asked by the borrower, but just a copy of the correct information would be sufficient.
The ruling put an end to thousands of claims through debt management companies who claimed that debts could be written off if the lender could not produce an exact copy of a loan agreement.
The OFT commented: “Some debtors are being misled into thinking that these sections [of the Consumer Credit Act] can be used to get their debts written off and that some creditors are not following legal obligations to provide information to customers.”
Concerns had been raised over debt management companies rallying more business by exaggerating the chances of getting a debt written off. S