ASA publishes new debt management enforcement advert notice

23rd June 2022

The  Advertising Standards Authority (ASA) has published a new Enforcement Notice about Debt Management (IVA/PTD) adverts (ads) by Insolvency Practitioners and Lead Generation Companies.

The ASA has published several rulings about ads which offered consumers a way to write off debt in government-approved schemes. These ads were not placed by FCA-authorised debt advisers but by lead generation companies or insolvency practitioners, and ultimately advertised services for individual voluntary arrangements (IVAs) [in England, Wales, NI] or protected trust deeds (PTDs) [in Scotland].

Ads targeted at consumers with debt problems have the potential to cause serious detriment if they do not comply with the advertising rules. Insolvency practitioners and lead generation companies which ultimately advertise an IVA/PTD service must be extremely careful to ensure their advertising is responsible and does not mislead.

From Monday 25th July, the Compliance team will take targeted enforcement action to ensure a level-playing-field, which may include – where advertisers are unwilling to comply – referral to Trading Standards or an appropriate recognised professional body.

In summary, ads must:

  • Clearly state the risks and fees involved.
  • For lead generators, include a clear and prominent statement that they are a lead generation company which will pass on customer leads to third parties.

Ads must not:

  • Imply association or approval from government, debt charities or regulated advisory bodies.
  • Claim that customers “can write off up to 85% of their debts” or similar in the absence of robust documentary evidence.
  • Exaggerate the simplicity or speed of the process or claim that customers can “Lower your debt today” or similar.

StepChange has welcomed the enforcement notice. The debt charity says that there are still far too many examples of poor and misleading advertising that create a real risk of consumer harm. Looking in isolation at those adverts that impersonate StepChange, the charity has previously estimated that up to 15% of people searching online for genuine StepChange help may have been inadvertently routed to other places due to misleading advertising tactics on search engines, social media and through direct marketing. The number of people potentially misled about the ease, suitability, cost or status of IVAs and PTDs in general, not just because of charity impersonation, will be even higher.

Under the new enforcement notice, Insolvency Practitioners and non-FCA-authorised lead generators have been put on alert that advertising industry monitoring will increase, and that there will be referrals for non-compliance to Trading Standards or relevant Recognised Professional Bodies. This is helpful, while also reinforcing the fact that this is a problem that remains far from solved – at the very time that the cost of living crisis may be pushing more people towards being receptive to advertising or websites about debt management solutions such as IVAs and PTDs .

StepChange believes that the Online Safety Bill currently progressing through Parliament is an opportunity that must be seized to cement meaningful protection against online debt scams. That’s why StepChange and other agencies are urging the Government to support amendments to the Bill to legally oblige search engines and social media platforms to prevent fake and fraudulent debt ads from reaching consumers in the first place.

Richard Lane, Director of External Affairs at StepChange, said “The Committee of Advertising Practice and the Advertising Standards Authority are showing admirable commitment to trying to clean up the squalid market in IVA advertising. However, seeking to monitor and hold to account those who are flouting the rules will be a massive task, as the problems are so widespread and the perpetrators so opportunistic and persistent.”

“We encourage anyone who does spot a misleading advert to report it, and we especially urge anyone experiencing financial worries to be vigilant about any advertising that purports to offer easy solutions to debt, or to push you towards one particular solution like an IVA. StepChange and other reputable debt charities would not suggest a solution without a full understanding of your own individual circumstances, and adverts that try to do this are unlikely to have your best interests at heart.”