How to Avoid Getting Stung with Bad Debt Advice if You Miss a Credit Card Payment
By Kevin Peachey, Cost of Living Correspondent
An increasing number of people are missing credit card repayments as finances are stretched by rising bills, according to the Bank of England. Lenders also expect this trend to continue into autumn, potentially leading to more demand for debt advice. However, there are traps to avoid when seeking help. Impartial, free debt advice is available from recognized charities.
Finding Help Responsibly
If you're dealing with money troubles, it's crucial to be cautious of quick-fix solutions advertised on social media or through internet searches. These often come with upfront fees and unrealistic promises. Instead, consider the following options:
- Visit the government-backed Moneyhelper website to find impartial, authorized debt advice.
- Check a firm's authorization by the Financial Conduct Authority (FCA) on their register (FCA Register).
- If you're unhappy with a service, you can complain to the Financial Ombudsman Service.
Avoiding Misleading Practices
The FCA warns against unregulated firms that impersonate debt advice charities or debt collectors, collecting personal details for sale to fee-charging debt solution providers. Warning signs of these unscrupulous firms include:
- Pressure tactics like repeated contact and coaching responses.
- Encouraging you to change financial details or steer you towards specific fee-charging solutions without offering alternatives.
- Unclear or misleading information about their services.
Always verify the identity of anyone claiming to represent a debt solution firm, and ensure you fully understand any options presented before making a decision.
"Before making any decisions... it's always worth getting full, free, and impartial debt advice first," advised Vikki Brownridge, CEO of debt charity StepChange.