Debt counseling charity condemns ‘misleading’ delisting ads on Facebook | Borrowing & debt
Commercial debt management companies place ads on Facebook that could give the impression that they are linked to official government programs, according to analysis by the Guardian.
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 arrange free management plans and other forms of support. One such company, Stepchange, has described ads promoting debt relief programs containing 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 a government scheme that provides legal protection against creditor actions for 60 days. Several Facebook pages have also used images of Boris Johnson to promote their services.
WiseoldMary and Debt Respite Scheme UK are “lead generators” for other companies and do not offer debt advice themselves, but do charge commission on referrals, in accordance with their privacy policies.
The cost of living crisis is likely to exacerbate the UK’s 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 ruled in 2020 that a series of adverts placed by TFLI Limited, which manages WiseoldMary, did not sufficiently state that they were passing leads to a third party and did not clearly state the potential costs and risks associated with the proposed solutions.
A TFLI spokesperson said internal processes were changed after the ICO and ASA rulings and that running a credit broker did not prevent the company from helping people 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 data controller, for comment.
A Trifik spokesperson said: “The assets have been removed at the request of our client as unfortunately they are no longer marketed.
“Facebook Ads guidelines were followed when serving promotional ads on behalf of our client and the website has declared it to be an independent website working with regulated advisers.”
Guardian’s analysis of data from Facebook’s ad library revealed 35 pages offering debt management services advertising on Facebook, spending up to £100,000 a month in total.
The Guardian also found two companies that advertised debt support while running credit brokers and payday loan companies. Although not illegal, it may not be clear to customers that the companies running these pages are also credit brokers.
Debt Solvo, 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 held by Nouveau Finance advertise an APR of up to 1721%.
WiseoldMary is a trading name of TFLI Limited, which also operates a credit broker called ‘cheaploans.co.uk’. In 2018, the company was fined £80,000 by the Information Commissioner’s Office for sending over a million spam messages.
A spokesperson for Stepchange said, “It’s a real problem figuring out which companies are really behind the ads. Often, these companies are lead generators to several business remotes that might actually set up a product for the customer.
“If you give your personal information to one of these companies, you may not know where the information is going or who is going to contact you about this solution.”
A number of ads analyzed by the Guardian claimed customers could write off “up to 85%” of their debts. A StepChange spokesperson said: “This is clearly an advertiser issue – we believe it can be deeply misleading.”
A TFLI Limited spokesperson said: ‘We have worked consistently with the ASA to ensure that all of our advertising is clear and transparent.
“We make it clear to customers that the average debt cancellation using our service, based on real data from our partners and taken from direct advice from ASA, is 67%, although it is entirely possible to cancel up to 81%.
“As to your accusation that we imply a direct affiliation with the government, we absolutely refute that assertion. TFLI simply refers 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.