The Office of Fair Trading (OFT) has imposed requirements on a debt management company, Carefree Group Ltd, in respect of its advertising of debt management services.

The requirements also apply to an associated licensee, trading as Carefree Debt Solutions, and cover all types of advertising, including websites.

As a result of the requirements the OFT has imposed, Carefree Group Ltd’s advertising and promotional materials must not claim or imply that the service is free if a fee is payable at any stage and include details of all fees prominently in the advertisement. It must also not claim or imply that savings will be made by rescheduling debts, without making it equally clear that this will lead to an increase in the sum to be repaid and the length of the repayment period.

It must not claim that it can guarantee a favourable outcome when negotiating with creditors nor claim that the debtor will be debt free in a certain period of time without explaining the adverse consequences on a consumer’s credit rating, and explain all of the advantages and disadvantages of each debt solution when providing advice to the consumer.

Ray Watson, director of the OFT’s Consumer Credit Group, said: “The OFT will not hesitate to take action against any debt management business which uses material that misleads consumers. The requirements imposed on Carefree Group Ltd will ensure that the company’s advertising will not in future contain claims that are inaccurate. We will monitor these requirements closely and take further action if necessary.”””