The Advertising Standards Authority (ASA) has told three debt firms to stop misleading the public with claims in TV and radio ads that they could get up to 75% to 80% of debts written off by entering into Independent Voluntary Arrangements.

An Individual Voluntary Arrangement (or IVA) is a formal agreement between you and the people you owe money to pay part or all of your debts over an agreed period of time.

A TV ad for one of the three companies, Money Debt & Credit, claimed:

"Plastic to the limit? Final demands piling up? Never ending loans? Crippling repayments make you feel like there's no end in sight? Stop! At Money Debt & Credit, we believe that you could clear your debts for good. Government legislation lets you write off up to 75% of what you can't afford to pay."

A similar radio ad for W3 Debt Solutions claimed that "they may be able to stop the interest and reduce the amount you owe by up to 75%" and a similar one for Accuma claimed "get up to 80% of your debts written off".

The ASA found that all three ads exaggerated the benefits of an IVA because the 75% to 80% debt reduction did not apply to a significant proportion of consumers and such reductions did not account for fees payable.

Accuma and W3 Debt Solutions were told to ensure that future similar claims were based on an amount of debt that a significant proportion of consumers could expect to write off, taking into account the impact of fees. Money Debt & Credit were told their ad must not be broadcast again in its current form.

The complaints against all three companies were brought by a rival debt solutions firm, Debt Free Direct Ltd.



April 11th, 2007