StepChange welcomes Google crackdown on advertisers, but root cause IVA problems remain

StepChange Debt Charity, which has for years been campaigning against misleading advertising by charity impersonator firms and potential IVA mis-sellers, is pleased that Google has announced a change to its debt service advertising policy, following collective evidence provided by the debt advise sector including the charity. From 6 December, Google will only allow organisations who are FCA authorised for ‘Debt Counselling’ and ‘Debt Adjusting’ to advertise debt services. Insolvency Practitioners will no longer be allowed to advertise directly.

Google identified that the majority of adverts that they considered misleading and misrepresentative originated from advertisers who were ‘Insolvency Practitioners, registered with a recognised professional body’.

StepChange has a long track record on campaigning for change. Back in 2019 StepChange began pro-actively campaigning to highlight some of the problems that people had faced, believing they were dealing with the charity when in fact they had been hoodwinked by misleading advertising by IVA lead generators. This resulted in Google agreeing to amend its advertising policy so that only FCA- authorised firms and Insolvency Practitioners could advertise.

However, this policy was still widely circumvented by unscrupulous firms, leading to further action by the Advertising Standards Authority, again based on input from the debt advice sector including StepChange, resulting in changes to advertising requirements. Despite these efforts, and those of the FCA working with the Insolvency Practitioners Association, misleading advertising has remained all too prevalent across search engines and social media sites. So far this year, StepChange had reported 38 advertisements from 24 advertisers impersonating the charity. StepChange has argued that the problem should be dealt with through the Online Safety Bill, but this is not straightforward.

Phil Andrew, CEO of StepChange Debt Charity, said:

“The fact that these misleading advertising issues have persisted for so long, despite so much collective action to attempt to address them, is a terrible indictment of the fee incentives that can provide ripe conditions for the mis-selling of debt solutions to financially vulnerable people.

“While it is to the credit of Google, as well as the Advertising Standards Association, that they keep trying to improve the framework under which such advertising can occur, I am afraid that these efforts – welcome though they are – are addressing the symptom rather than the cause of problems.

“It is the operation of the IVA market that is the underlying cause of the difficulty. As we have long highlighted, the failure rate of IVAs in the wider market is around double the rate of those that StepChange arranges. We think that over-selling and poor management of IVAs is a real problem, and one that urgently needs addressing through regulators.

“Stamping out misleading advertising is a good step, but until anyone getting an IVA is required to go through a proper, FCA-regulated debt advice process first to ensure that this is genuinely the appropriate solution for their needs, the problems are likely to continue. We urge people to be vigilant and to use only reputable, FCA-authorised organisations to obtain debt advice.”