If you're worried about money or struggling with debt, asking for help can be an important first step. But it's equally important to make sure the advice you're getting is trustworthy and right for your circumstances.
The Financial Conduct Authority (FCA) has issued a warning after concerns that some people looking for debt advice are being pushed towards fee-charging debt solutions that may not be suitable for them.
Free, impartial debt advice is available, so you shouldn't feel pressured into making a quick decision or paying for a solution before you've had the chance to understand all your options.
Four red flags to look out for
The FCA has highlighted several warning signs that may suggest the advice you're receiving is not putting your interests first.
You're being pressured to make a quick decision
Be cautious if someone repeatedly calls or messages you after you've made an online enquiry, particularly if they're encouraging you to agree to something immediately.
You should have time to understand what is being offered, ask questions and consider your options. You shouldn't be pressured into agreeing to a debt solution over the phone or through WhatsApp.
You're encouraged to change your income or spending details
The information you provide about your income, household spending and debts should always be accurate.
If somebody encourages you to change figures, leave information out or tells you what to say in order to qualify for a particular debt solution, that's a serious warning sign.
Free alternatives aren't being explained
Some companies charge fees for arranging debt solutions, including some debt management plans and Individual Voluntary Arrangements (IVAs).
These may be appropriate in some circumstances, but you should also be told about other suitable options, including sources of free debt advice.
It's not clear who you're actually dealing with
A legitimate adviser should be clear about the organisation they work for and how you can contact them.
If you're unsure, don't rely only on the contact details you've been given. Check the organisation independently using the FCA's official Firm Checker.
Good debt advice should take your individual circumstances into account and explain the options available to you.
Free debt advice is available
You don't need to pay someone simply to understand your options. There are organisations that can provide free, impartial help.
Find free debt advice
MoneyHelper can help you find free and impartial debt advice from organisations that can talk through your circumstances and explain the options available.
Find free debt advice with MoneyHelperCheck who you're dealing with
Before dealing with a financial services company, you can use the FCA Firm Checker to check whether the firm is authorised and whether the contact details you've been given are genuine.
Check a firm with the FCAAlready received debt advice that doesn't feel right?
If you think you've been pressured, misled or encouraged into a debt solution that may not be suitable for you, you don't have to simply carry on.
You can contact the Financial Conduct Authority . If you're unhappy with the way an authorised financial firm has treated you, you may also be able to take a complaint to the Financial Ombudsman Service .
Talk to us if you're struggling
If you're a Clockwise member and you're finding it difficult to keep up with payments to us, please get in touch.
Ignoring money worries can make them harder to deal with. Talking to us early gives us the opportunity to understand what's happening and discuss the support that may be available.
