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OFT acts on debt management cold calling complaints

LONDON - The Office of Fair Trading has warned six debt management businesses and four cold-calling companies to stop using unsolicited and misleading phone calls to advertise their services.

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The OFT said it was not allowed to name the companies, which it called on to stop "unacceptable" practices or face formal enforcement action.

It criticised the nature of "most of the information given to consumers" and the omission of vital facts about the purpose of the call and the identity of the caller.

For example, some calls misled consumers into believing that they were one of the "few chosen individuals" contacted as part of a government scheme to help wipe out consumer debt.

Some recipients were transferred to a commercial debt management business on the pretext of talking to a not-for-profit debt adviser, and often there was no disclosure that there was a fee payable for both the initial advice and the debt solutions offered.

The investigation was sparked after the OFT received an unspecified number of complaints from consumers about the unsolicited nature of the calls.

The OFT was aided by the Information Commissioner's Office, which is the correct point of contact for complaints about automated cold calls and passed on complaints and evidence.

Some consumers were registered with the Telephone Preference Service, meaning that it was against the law to call them.

Nigel Cates, deputy director of consumer credit at the OFT, said: "Taking advantage of people who are suffering distress through debt problems is completely unacceptable and this practice of illegal or misleading cold-calling for debt management services must cease immediately."

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