By Paul Lewis
BBC Radio 4's Money Box
Some companies which promise to help people manage their debts have been warned to clean up their adverts.
People may face bankruptcy if an IVA fails
The 17 firms all offer what are called 'individual voluntary arrangements' (IVAs) to write off some debt and repay the rest over a number of years.
But the Office of Fair Trading says their adverts make false claims and fail to warn of problems.
Companies that do not change may lose their licence and be forced out of the credit business.
David Philpott, deputy director of markets and projects at the Office of Fair Trading told Money Box on Radio 4
"A lot of these adverts and promotions push the potential benefits of these arrangements without mentioning some of the potential pitfalls.
"There were also some misleading statements. Some were claiming that up to 90% of the debt might be written off when the maximum is likely to be in the region of 60-70 per cent.
"There was also a failure to display warnings about the possibility of bankruptcy if an IVA fails, and that an individual's credit rating can be affected for up to six years."
The OFT would not name any of the companies it has warned for what it says are legal reasons. But Jon Bartman of Money Debt and Credit admitted he had received the letter and his firm would change its adverts.
"Some companies are saying 90% of your debt may be written off. We never said that. We said up to 75%, which is true. But if the OFT don't want us to put figures in we won't put any figures in. This is all part of regulation which we welcome. We are a responsible company in a responsible business."
David Philpott made it clear that if companies he had warned did not comply they would be in trouble.
"We've given these businesses four weeks to amend their adverts and promotions and come back to us evidencing they've done that. If they don't then we'll have to consider taking court action or taking away their consumer credit licences which means they won't be able to engage in any kind of credit activity at all."
And he stressed that although IVAs were suitable for some people there were alternatives.
"A typical person taking out an IVA has debts of £40,000 - £50,000, is a man in his 40s, he's got a job and a steady income. It's very important if someone takes on an IVA that they have surplus income to ensure they can keep up payments. They are certainly not suitable for people on benefits. People can get free debt advice from National Debtline or the Consumer Credit Counselling Service."
BBC Radio 4's Money Box was broadcast on Saturday, 20 January 2007 at 1204 GMT.
The programme will be repeated on Sunday, 21 January at 1502 GMT.