Debt: don't trust this devious offer of help

Unscrupulous debt management firms piggybacking on the back of free debt charities have come under attack from the Office of Fair Trading. But is it enough?

If you’re in financial trouble, you must be wary about anybody who offers to give you help. Why? Because there’s a good chance they’re not looking to help you, but themselves.

Scores of private firms are targeting people in debt by using terms like “helpline” and “debtline”, giving the deliberately misleading impression that their help is free.

It isn’t. You will pay a heavy price for it, which is the last thing people with money worries need. Especially since you can get superior help from reputable organisations - and it won’t cost you a penny.

Misleading names

Your phoney friends often trade under misleading names that are remarkably similar to reputable not-for-profit charities and government bodies.

They are particularly keen to trick you into believing they are linked to National Debtline, which actually IS a free, charity service available to all.

If you Google the term ‘national debtline’ you will be directed towards a host of fake ads trying to trick you into contacting a fee-charging service rather than the free one.

Now why would they do that? I think you can guess.

What’s in a name?

The Money Advice Trust, the charity that runs National Debtline, is understandably angry about this. This public-spirited body is keen to help people with debt problems, but too many are picked off by greedy private companies instead.

It has just released some screen grabs showing just how closely ads on Google mimic the real thing. Some were taken six months ago, one as recently as last week.

Several lure the unsuspecting with the slightly-misspelled web address Nationaldebtline.co.UK [sic] or the phrase “National Debt Advice Line”, then direct you to a site run by a profit-making company.

Others claim to offer “Government approved debt services” or even “Government debt help”. Or they may piggyback off reputable money-saving websites by using phrases such as Money Expert.

When “free” isn’t free

I’ve taken a look at some of the fee-charging debt advice websites and they all have one thing in common. They don’t say anything about their fees. Not a word.

Some even claim to offer “Free no obligation advice”, an offer that will only extend to the initial phone call.

In fact, most don’t offer any debt advice at all. They simply harvest your details and sell them on to a private company that will charge a fat fee for setting up an individual voluntary arrangements (IVA) or debt management plan.

They typically won’t display a registered office or postal address either. Many don’t even offer a phone number. You contact them by completing an online form, and your details are then sold to the highest bidder.

No genuine debt charity will ask you to complete an online form setting out how much money you owe and how many creditors you have.

Your false friends will.

False friends

Once you have been passed on to a commercial debt company, it will typically draw up a monthly payment plan designed to appease your creditors.

Debt charities such as National Debtline may do pretty much the same, but all your payments will go to your creditors. With a private company, as much as half will be snaffled in fees.

This is money you simply don’t have to pay.

Many of the sites claim to protect you against your creditors. But who will protect you against them?

Charity begins with charities

Actually, the Office of Fair Trading is doing its best. It has just launched a crackdown on private companies who falsely claim they are offering free, impartial, charitable help.

That’s a step forward, although you have to ask why they’ve being allowed to get away with it for so long. This isn’t exactly a new scam.

Unfortunately, these companies will still be free to tour for business. The only difference is that they will advertise their services in a slightly less misleading way.

And thousands of people will fall into their clutches every year.

Help!

If you’ve got debt worries, it’s simple to avoid getting ripped off. Just make sure you call the real National Debtline. You can also get free, high-quality specialist advice from charities Consumer Credit Counselling Service, Citizen’s Advice and Christians Against Poverty.

It takes a lot of courage to own up to debt problems and seek help. Anybody who is brave enough to do that deserves a lot better than being conned by a fee-charging debt management service.

If you’re in debt, you need help from somebody. But not just anybody.

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Debt: ten money mistakes we hear every day

Why Coronation Street doesn’t help those in debt

Right of offset: how the bank can take all of your wages