Debt Advisory Charity Condemns ‘Misleading’ Facebook De-listing Ads | Loan and debt
Commercial debt management companies place ads on Facebook that could make it appear as if they are related to official government programs, according to Guardian analysis.
Debt management Companies help people consolidate and restructure their debts, charging clients a fee for a solution or earning a commission on referrals to debt counsellors.
Debt counseling charities can organize free management plans and other forms of support. One such company, Stepchange, described ads promoting debt cancellation programs with logos similar to the government crest, placed by Facebook pages called WiseoldMary and Mums In Debt, as “deeply misleading. “.
Another Facebook page was called Debt Respite Scheme UK, the same name as government scheme which provides legal protection against actions by creditors for 60 days. Several Facebook pages have also used images of Boris Johnson to promote their services.
WiseoldMary and Debt Respite Scheme UK are ‘prime generators’ for other businesses and do not offer debt advice themselves, but earn a commission on referrals, in accordance with their privacy policies.
The cost of living crisis is likely to exacerbate the UK’s problematic debt problem, with Citizens Advice warning in November that one in ten families are at risk of serious financial hardship this winter.
The Advertising Standards Authority governed in 2020 that a series of advertisements placed by TFLI Limited, which operates WiseoldMary, did not sufficiently state that they were transmitting leads to a third party and did not clearly state the potential costs and risks associated with the proposed solutions.
A spokesperson for TFLI said internal processes had been changed after ICO and ASA decisions and running a credit broker did not prevent the company from helping those in debt. .
Debt Respite Scheme UK’s Facebook page and associated website were taken down shortly after the Guardian approached Trifik Ltd, listed on the website as the data controller, for comment.
A spokesperson for Trifik said: “The assets were deleted at the request of our client because unfortunately they are no longer trading.
“The Facebook Ads guidelines were followed when serving promotional ads on behalf of our client and the website has declared that it is an independent website working with regulated advisors.”
Guardian’s analysis of Facebook ad library data revealed 35 pages with debt management services advertising on Facebook, spending up to £ 100,000 per month in total.
The Guardian also found two companies advertising debt support while operating credit brokers and payday loan companies. While this is not illegal, it may not be clear to customers that the companies that maintain these pages are credit brokers as well.
Debt solvency, which offers customers “a simple, stress-free way to finally solve that debt problem”, is a trading name of Nouveau Finance Limited, which operates a number of payday loan brokers. SOS payday loans, Bizzy Loans, and others belonging to Nouveau Finance announce an APR of up to 1721%.
WiseoldMary is a trading name of TFLI Limited, which also operates a credit broker called cheapploans.co.uk. In 2018, the company was a fine of £80,000 by the Information Commissioner’s Office for sending over a million spam messages.
A spokesperson for Stepchange said: “It is a real problem to determine which companies are really behind the ads. Often times, these companies are lead generators at several business locations that could actually set up a product for the customer.
“If you give your personal information to one of these companies, you might not know where the information is going or who is going to contact you next about this solution. »
A number of ads analyzed by the Guardian claimed that customers could write off “up to 85%” of their debts. A spokesperson for StepChange said: “This is clearly an advertising argument – we think it can be deeply misleading. »
A spokesperson for TFLI Limited said, “We have worked consistently with the ASA to ensure that all of our advertising is clear and transparent.
“We make it clear to clients that the average debt write-off using our service, based on actual data from our partners and taken from direct advice from the ASA, is 67%, although it is entirely possible. cancel up to 81%.
“Regarding your accusation that we imply a direct affiliation with the government, we absolutely refute that assertion. TFLIs simply refer to the fact that IVAs are the result of government debt legislation. »
Mums in Debt and Nouveau Finance Limited did not respond to requests for comment.