The Guidance
17) The following guidance sets out minimum standards for debt
management companies in the marketing of their services, pre-contract
contact, the provision of pre-contract information, contract terms,
advice and the nature of the debt management service provided.
18) Marketing, promotion and advertisements
a) Advertisements and other promotional material, whether written or on
television or radio, must be accurate and clear and must not mislead,
either expressly or by implication or omission.
b) Where printed advertisements are used, they must be easily legible
and, where this Guidance requires warnings and caveats, these must be
accorded similar prominence to the material in the advertisement which
they are intended to qualify.
c) Advertising of debt management services should not:
l state or imply that the service will free the consumer of the need to
meet their debts;
l emphasize the ‘savings’ to be made by rescheduling debts (for example,
by means of a reduction in monthly payments) without making it equally
clear that this will usually lead to an increase in the size of the sum
to be repaid and that rescheduling the debt may impair the consumers’
credit record. Where specific ‘savings’ (e.g. the amount by which
outgoings per month can be reduced) are quoted there must be a similar
indication of the likely increase in the total amount of sum to be
repaid and/or the period of repayment, and the fee that will be charged;
an l claim or imply that the DMC can guarantee an outcome favourable to
the consumer in negotiations with creditors.
d) Where the arrangements with the DMC will lead to a period in which
contractual payments are not made by the consumer (e.g. because the
first payment is a deposit or up front fee or because of a delay in
distributing payments to creditors), the consumer must be warned of this
in the marketing literature.
19) Contact with consumers
a) There must be no cold calling of debt management services by personal
visit.
The Consumer Credit Act makes it an offence to canvass ‘debt adjusting’
and ‘debt counselling’ services during visits to consumers’ homes,
unless the visit is requested by the consumer (section 154).
‘Debt adjusting’ and ‘debt counselling’ are defined in the Act and cover
most if not all of the services described as ‘debt management services’
in this Guidance.
b) Visits not covered by section 154 may be subject to the Consumer
Protection (Cancellation of Contracts Concluded away from Business
Premises) Regulations 1987, commonly called the Doorstep Selling
Regulations. Where the Doorstep Selling Regulations apply, they must be
strictly adhered to.
c) DMCs must not accept referrals from credit brokers or lenders unless
the consumer has given informed prior consent to the credit broker or
lender for such a referral.
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