Commercial debt management firms are leaving consumers financially worse off by offering poor debt advice, according to the chief executive of the Money Advice Trust.

Joanna Elson OBE (pictured), told delegates assembled at Credit Today’s Credit Summit consumer debate that more consumers were seeking free debt advice because their experiences with paid-for debt advice firms had left them in a weaker financial position.

She said: "There is misleading advertising and poor advice from commercial debt management firms, after that what does a company have going for it?

"They move to where the money is, and when government is looking at all the people who need money advice what you cannot do is say the private sector can look after this, as currently it is not fit for purpose."

Elson’s comments came after an Office of Fair Trading (OFT) review of the commercial debt management sector, conducted at the end of 2010, criticised 129 firms for inadequate compliance practices.

Since the conclusion of its review the OFT has revoked the consumer credit licences of four commercial debt management firms for providing misleading advice, and has shut down a number of "lead generator" websites used to market the services of paid-for.........Read more HERE