The ads look too good to be true – firms who claim that they can cancel your loan agreements.

Most things which look too good to be true usually are, and in these cases, the old adage holds true. The bold promises made by these companies may actually see you end up out of pocket.

Usually, the base their claims on changes to the Consumer Credit Act which was brought out in 2008. This act aims to help protect individuals from ‘unfair relationships’. Previously, the act deemed agreements unenforceable if they met specific criteria for example very high interest rates that didn’t reflect the risk, however the changes have made the act a lot more of a grey area. ‘Unfair relationships’ is a very broad term that may have different meanings to different people.

So although these firms may be able to argue your case for you, there is no guarantee that they will be successful. And even if they are successful, you may still face a hefty bill. Many of these companies will also charge for each additional loan or credit card bill that you are looking to be rid of, plus money for the time spent on every ‘success’ so the charges can end up in the thousands.

Naturally if you have debts in the tens of thousands, these companies may be worth it however for most people with a couple of thousand pounds in debt, the risk is probably not worth it.

Most of these companies, however, will refund you the money less an administration charge should they not be able to get the debt cancelled so it may be worth a punt however it is probably better to sort these sorts of issues out yourself.

If you feel that you have a genuine case of being exploited via a credit agreement, write to the Financial Ombudsman Service where you will receive free help with your case.

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