Warning on 'debt elimination'
Consumers should act with extreme caution before responding to businesses that promise to write-off outstanding balances on loans and credit agreements, according to Derry man, Damien Doherty of Trading Standards Services.
Trading Standards has, in recent weeks, received an increase in complaints against debt elimination companies. Thirty complaints have been received in the last six months, with 10 of these being recorded in the last three weeks.
Consumers who have taken out a loan, credit or store card are being targeted by such companies, offering to cancel debts and claim back money.
Mr Doherty said: "Consumers are often cold called by businesses that have no detailed knowledge of the consumers' credit agreements. They claim that many of these agreements are completely unenforceable, leading the consumer to believe their debts can be cancelled and that they may be able to claim back thousands of pounds.
"Consumers who agree to avail of such services, are then asked to pay large up-front fees, often up to 500, so the company can review their credit agreements. In reality, many of the claims are exaggerated and there is only limited evidence of success, when consumers have received money back.”
Trading Standards has received a number of complaints indicating that, in many cases, action to claim back money is not being progressed. Consumers have also reported that when they attempt to contact the debt elimination business for a progress update, there is no dialling tone on the contact telephone number or they are told that the business has closed.
Mr Doherty said: “Like most scams, when something seems too good to be true, it usually is, and this is certainly the case here. While there is evidence that certain loans have been mis-sold, such as in the area of payment protection insurance, there are many that have not. It is vitally important that consumers are given clear information about the options available for pursuing their claim, as well as the realistic chances of success and the costs involved.”
Consumers who have complaints about debt elimination businesses should also contact Consumerline on 0845 600 6662 or 028 9025 3900 or alternatively log on to the Consumerline website at www.consumerline.org .
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Weather for Derry
Sunday 12 February 2012
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