Debts 'cannot be wiped out' by companies
Consumers in the UK have been warned against signing up to agreements with debt-wiping companies.
The Office of Fair Trading (OFT) has warned people that it is not possible for firms to get debts written off under the sections 77/78/79 of the Consumer Credit Act.
Instead, it has advised consumers to pay a £1 fee for their account information – if the lender is unable to provide a copy of the agreement, the debt can become unenforceable.
However, this simply means that the lender cannot force a county court judgement or force the debtor to take the goods back.
The OFT has warned that the debt is likely to remain payable and could accumulate additional charges while consumers lay off the normal payment dates.
The government agency has said that consumers should still look to traditional payment plans to continue paying off their debts.
This could include taking advice from free debt counselling services to work out a cheaper and trustworthy alternative to 'debt-wiping'.
Posted by Christopher Evans
Published on: October 20, 2010
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