Trading Standards warn of misleading paid debt advice

People who may be struggling with debt in Moray are being warned against unscrupulous companies offering paid-for debt advice services without pointing out that free advice is available.

An inquiry by Trading Standards has revealed that at least one fee-charging debt advice service had failed in their legal duty to inform clients that free advice was an option they could take.

Moray Council offers an independent debt advice service in partnership with the local Citizens Advice Bureau while a similar service is also available through the StepChange charity.

A client recently contacted the council’s money advice service for assistance after signing up to a fee-charging service. The client was concerned that she had paid a large fee for what turned out to be poor advice – something that an advisor from the council service confirmed after looking into her case.

Moray Council’s financial inclusion team leader Juliet Taylor said: “The law requires anyone who charges for debt advice to tell customers about free advice services.

“This is to protect customers who may buy expensive advice services not knowing that they can get good quality advice for free.”

Following an investigation into the case by Trading Standards the business concerned agreed to refund the client and pay compensation – as well as agreeing to ensure all consumers were told that free debt advice was available.

Ms Taylor said: “Dealing with debt is a difficult problem that often leaves people vulnerable.

“When people are brave enough to seek help with their debt problems, the last thing they need is the wrong advice and to incur further cost. This is especially true when they can ask for local help, advice and support which is free and in their best interests.

“There are many firms advertising debt solutions who make up-front charges or take a percentage of payments – sometimes both – so it is important that people are aware of free alternatives.”

Anyone seeking an appointment with a money adviser at the Citizens Advice Bureau should call 0300 123 4561, while the debt charity StepChange can also be contacted on 0800 138 1111.

There is also a National Debtline – 0800 808 4000.

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