Office of Fair Trading warns against legal loophole
13 Dec, 2010
The Office of Fair Trading (OFT) has warned against firms who are telling customers they can ‘write off their debts.’ OFT warned people not to trust firms who offer to ‘buy’ debts, for a fee of several hundred pounds, claiming they can use Consumer Credit Act to have these debts written off.
Using sections 77, 78 and 79 of the Consumer Credit Act – under which consumers can request a copy of their credit or hire agreement – the companies claim the debt becomes unenforceable if the lender fails to provide the agreement.
However, just because the debt in not enforceable does not mean the customers do not have to repay the debt. They would still owe money and interest could be added if payments are not made on time.