The Office of Fair Trading (OFT) has instructed up to 20 firms selling IVAs to review their advertising practice after it found that several had made misleading claims on TV and radio.
Exaggerated claims about the IVA deals on offer promise customers that as much as 90 per cent of their debt will be wiped out, without indicating eligibility restrictions or conditions of purchase.
"We are concerned that there may be some companies which are overstating the benefits of IVAs, for example, saying that you can write off 90 per cent or so of your debts," an OFT spokesperson told the Guardian.
The OFT is calling for compliance with advertising regulatory standards in the financial services industry from IVA providers – and threatening that continued non-compliance could result in the revocation of creditors' licences.
Derek Oakley, insolvency director at the UK's biggest IVA firm, Debt Free Direct, told the Independent: "We've been calling for this for some time."
"We see adverts all the time that say you can write off 75 per cent, 80 per cent or even 90 per cent of your debts," he added.
The number of IVAs in the UK is predicted to rise to 100,000 in 2007.For more information about debt advice, click here.
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