Government consumer watchdog says it will clamp down on firms that use misleading company names to offer financial advice and loans
The Office of Fair Trading (OFT) has said it will take action against financial services businesses who use misleading company names.
The statutory consumer protection body said that names such as ‘Helpline' and ‘Debtline' used by many online companies offering financial advice on debt, or any name that implies a company is a charity or public service, will not be allowed.
The OFT said that it was "keen to stress" that in the majority of cases names are changed after informal discussions.
"If they do not cooperate we can take regulatory action to have the name removed. In extreme cases, if they continue to ignore, either the Oft or trading standards can instigate criminal proceedings," the OFT said.
It has now issued guidance to companies but warned that if a firm continued to use misleading names it would refuse new and renewal licence applications and applications to vary a consumer credit licence.
In December 2010, an application from a firm, Baker Evans Ltd, which wanted to use the trading names 'The Bankruptcy Helpline' and 'The Insolvency Helpline' was refused because the OFT said the names "failed to make the commercial nature of the business clear to consumers".
David Fisher, Director of Consumer Credit, OFT said: "Businesses are free to choose trading names as long as they are not misleading or otherwise undesirable. For example, where they do not make clear the nature of a business or where it pretends to be something it is not.
"The name of a business can be important to consumers when choosing a supplier and they should not be misled in this regard."
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