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OFT tells firms to stop using misleading 'helpline' names

 

Vicky Shaw
Friday 20 April 2012 08:29 BST
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Businesses offering credit services must not mislead customers into believing they are a charity or government body by using names such as "helpline" or "debtline", the trading watchdog said today.

The Office of Fair Trading (OFT) has issued guidance to stop firms using names which may confuse consumers about their commercial nature, saying they should not use any name that implies they are a public service.

The watchdog said that as a general principle of fair business practice, names used by a commercial enterprise should never seek to mislead consumers looking for free, impartial, charitable or public sector assistance.

Trading names should also not give a misleading indication of the service to be provided, the cost of products on offer and the relationship of the firm to other businesses.

The OFT said that the use of names such as "cheap loans for all", for example that imply credit is available regardless of the borrower's financial circumstances, is likely to be challenged.

Names that are considered to be misleading are likely to be refused on new and renewal licence applications and on application to vary a consumer credit licence, the OFT warned.

Businesses should also not imply they have exclusive or officially sanctioned authority to offer the product in a specific locality, unless such authority exists and can be shown, the watchdog said.

David Fisher, director of consumer credit at the 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."

The guidance applies to any trading name a business uses which is linked to the provision of credit or ancillary credit services, including online domain names and website addresses.

Adam Scorer, director of policy and external affairs at Consumer Focus, said the move represented "the sensible tightening of a loophole".

He said: "Companies trading to make a profit should not be able to mislead consumers by calling themselves a helpline or any similar title. This is a common sense move which will help reassure consumers."

PA

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