The Office of Fair Trading (OFT) is warning consumers that it is misleading for claims management firms to suggest they can use sections 77/78/79 of the Consumer Credit Act 1974 to wipe out their debts.

The OFT has published a guide on the rights consumers have to request information under these sections of the Act. This explains that for a fee of £1 consumers can request a copy of their credit or hire agreement and information on their account so that they can find out what was originally agreed what the agreement is now (if it has changed) and how much is still owed.

If the lender fails to provide the requested information the agreement becomes ‘unenforceable’ which means the lender cannot get a court judgement against the borrower, take back hired items or items bought on credit, or take anything used as security (like a car) when the agreement was made.

However, the guide warns that, even if a credit or hire agreement becomes ‘unenforceable’, consumers would still owe any outstanding money to the lender, interest could be added to their loan or hire agreement, default charges could be made, and any failure to pay could impact on their credit record. The guide also explains that the debt is enforceable again as soon as the lender provides this information.

Ray Watson, director of the OFT’s Consumer Credit Group, said: “Consumers have a right to information on debts they owe