The Claims Management Regulator at the Ministry of Justice and the Office or Fair Trading (OFT) are warning consumers to think carefully before responding to businesses claiming that they can arrange for outstanding balances under loan, credit card and other consumer credit agreements to be written off and secure compensation.

Consumers are advised to seek independent advice before using the services of businesses that offer to find ways to render consumer credit agreements unenforceable. Businesses can only provide claims services if they are authorised and regulated by the MOJ under the Compensation Act 2006. Such businesses may also need to hold an appropriate OFT consumer credit licence.

Consumers may be asked to pay large up-front fees, often up to £500, for the businesses to review their credit agreements. Some businesses are claiming that many of these agreements are completely unenforceable, that consumers can have debts cancelled and claim back thousands of pounds. Consumers should think very carefully before committing themselves to making claims and handing over hundreds of pounds in advance to do so, even where refunds may be promised if the claim is unsuccessful.

The BBC have written a news report on it which can be found here.

Where can I find more help and information?

For clear and easy-to-understand information about coping with debt, visit the Directgov website.

For free information and advice about debt, ring National Debtline on 0808 808 4000 or visit the National Debtline website.

Download a self-help pack from the National Debtline website.

Consumer Credit Counselling Service also offer free, confidential advice and support to anyone who is worried about debt. Ring them on 0800 138 1111 or visit the CCCS website.

You get also get more help and advice about debt on the Citizens Advice Bureau Adviceguide website.