Office of Fair Trading
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OFT issues new debt management guidance

The OFT has yesterday published revised guidance on the standards it expects from businesses offering debt management advice or credit repair services to consumers.

The guidance expands on previous versions, providing examples of 'unfair or improper practices' which, if engaged in, could render a business unfit to hold a consumer credit licence and operate in the market.

Examples of unfair practices include:

  • Sending unsolicited marketing text messages, email or voicemails.
  • Providing inappropriate financial incentives to staff giving debt advice, which may encourage them to promote unsuitable debt management products for personal gain.
  • Making false or misleading claims regarding the status of the business, for example operating websites which look like the website of a charity or a government body.

Businesses are also expected to refer consumers to not-for-profit advice organisations for further help, in certain circumstances, and to have effective measures in place to identify and deal with particularly vulnerable clients, such as those with mental capacity issues.

An overall theme of the guidance is for businesses to be transparent so that consumers have all the information necessary to make informed decisions about the most appropriate debt solutions for them given their financial circumstances.

The guidance builds on enforcement action taken following a compliance review of the sector in 2010, which identified widespread concerns, including problems with advertising and marketing practices and the quality of advice given.

Following the compliance review, the OFT issued 129 warnings to debt management businesses. Since then, 87 businesses have exited the market, either voluntarily or as a result of enforcement action, and a further 67 warning letters have been issued.

David Fisher, Director of the OFT's Consumer Credit Group, said:

'This new guidance clearly sets out the standards we expect from debt management businesses. All too often it may be particularly vulnerable consumers who fall victim to poor quality debt advice and we will continue to take action against businesses that fail to follow our guidance.'

Consumers looking for debt advice can contact free advice services via

Download the new guidance (pdf 907kb)


  1. OFT Debt Management Guidance was first published in 2001 and was updated in 2008 and sets out the standards for this industry.
  2. Traders who wish to operate in the debt management sector must hold an appropriate consumer credit licence. The Consumer Credit Act 1974 places a duty on the OFT to ensure that consumer credit licences are only given to and retained by those who are fit to hold them. The OFT takes the view that a failure to adhere to the standards in the guidance could be considered to be engaging in business practices which are unfair or improper (whether lawful or not) under section 25(2A)(e) of the Act and can be considered as evidence leading to formal OFT action.
  3. Details of all recent OFT enforcement action under the Consumer Credit Act 1974 are on the credit enforcement page.

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