UK watchdog warns against dealing with Gujarat-based debt firm BBC Debts

Written by PTI | London | Updated: Jun 22 2014, 19:35pm hrs
BBC debts'We believe BBC Debt has been carrying out consumer credit activities in UK without our permission'
British financial sector regulator FCA (Financial Conduct Authority) has warned against dealing with a Gujarat-based company after it found it to be carrying out consumer credit business in the UK without authorisation.

"We believe this firm has been carrying out consumer credit activities in the UK without our permission or authorisation," the FCA said in a public advisory about the firm operating under the name BBC, based in Ahmedabad, Gujarat.

The regulator further said that there was a need "to be especially wary of dealing with this unauthorised firm". As per details available on the website of the company, BBC Debts claims to offer "government backed schemes" to help anyone who is finding it difficult to make their monthly debt payments in the UK and it does not charge anything for its service.

BBC Debts further said that it arranges help from qualified debt advisers, whose advice "is completely free of charge. However, depending on the route you decide to go after the advice is given you may incur charges such as bankruptcy which is usually the last resort but this incurs a fee payable to the courts of 500- 700 British pounds".

In its advisory, FCA said that "almost all firms and individuals carrying out consumer credit activities in the UK have to be authorised by us.

"However, some firms act without our permission or authorisation and some knowingly run scams. This firm (BBC Debts) is not authorised by us but has been targeting people in the UK."

According to estimates, outstanding personal debt in the UK stood at over 1.4 trillion British pound at the end of April and average household debt, excluding mortgages, was at a 6,100 British pound.

Debt advisory services is a popular financial sector activity in the UK, but the companies need to register with FCA.

At the same time, some entities, pretending to be from firms authorised by regulators, often make cold calls and offer zero or low fees to lure debt-laden individuals in the guise of debt advice/counselling.

There have been many cases where debt-laden individuals fall for these offers, forcing financial sector regulators to take strict action against erring companies and caution the public.