Citizens Advice has claimed that a large number of fee charging debt management companies are exploiting vulnerable consumers.
It is calling on the Office of Fair Trading (OFT) to impose tougher sanctions on companies flouting the rules.
Citizens Advice Bureaux helped with over 3,000 problems relating to rogue debt management services and credit repair last year (2010-11). The charity reports fee charging debt management companies charging excessive fees, offering vulnerable people inappropriate debt solutions and forcing people further into debt.
In its response to the OFT’s consultation on debt management and credit repair services guidance, Citizens Advice says it welcomes new, clearer tougher guidance from the OFT, but calls on the regulator to ensure it imposes tough sanctions on companies which break the rules.
Gillian Guy, Citizens Advice chief executive, said: “People already struggling with their finances
