OFT warns of new debt scam
The Office of Fair Trading (OFT) has today issued a warning to UK consumers regarding a new debt scam which is gripping the UK. There has been a significant increase in the number of adverts from claims handling firms which apparently offer indebted consumers a chance to sell their debt to this new breed of company. So what exactly is going on?
The OFT has reacted swiftly to the sudden increase in adverts across the national press confirming that it is illegal to sell any debt without the underlying lenders permission. This new scam relates to the Consumer Credit Act and the understanding that loan or credit card debts from arrangements prior to April 2007 are unenforceable in the courts and can therefore be written off. Aside from the fact that the OFT has confirmed it is illegal to sell debt without the lender's knowledge, there is also a significant problem if the "new owner of the debt" fails to pay off or write off the outstanding balance.
Ultimately it would be the original customer against whom the original lender would take legal action, even though the debt may have been sold on, and it will be their credit rating which is impacted. The OFT is set to take action against those making promises they cannot keep after signs that misery and significant financial troubles are attracting vultures preying on others' misfortune.
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