Loan-Free's claims were not sufficiently backed up, the ASA said
A claims management company has been told not to publish misleading adverts about the chances of people being able to write off their debts.
The Advertising Standards Authority (ASA) said an advert from the website Loan-Free was misleading.
It had suggested that credit card and bank debts agreed before April 2007 might not need to be repaid.
But the ASA said the company and its solicitors had failed to provide sufficient evidence to back this up.
The advert in question, published in regional newspapers, had stated: "If your credit card or loan was taken out before April 2007 it could be completely unenforceable and will not need to be repaid.
"Our solicitors can use government legislation to arrange for your outstanding balances to be written off and claim compensation for you."
The ASA decided this "was likely to mislead readers as to the likelihood of their debts being written off".
The past year has seen a boom in the number of claims management companies trying to encourage people to challenge the legality of loan agreements which had struck before April 2007, under the old provisions of the 1974 Consumer Credit Act.
They argue that if lenders cannot prove they have stuck to the strict paperwork requirements of the 1974 law, then the debts cannot be enforced.
Firms trying to attract this sort of business have recently been warned by the Ministry of Justice, the Office of Fair Trading and the solicitors' regulatory authority not to exaggerate the chances of success.
Loan-Free, run by a business called Debt Free UK, denied its advert contained any exaggeration.
It said its advert did not promise that all debts could necessarily be written off.
The firm told the ASA that 76% of the credit card agreements, and 85% of the loan agreements, they had passed to their solicitors had breached the terms of the consumer credit act to the point where they were legally unenforceable.
However, the firm's solicitors refused to back this up to the satisfaction of the ASA.
Arguing that supplying the figures would be a breach of their obligation to maintain their clients' confidentiality, they said only that "they had successfully challenged numerous credit agreements, with balances written off and clients' credit ratings restored".
Debt Free UK was also criticised by the ASA for not making it clear in its advert that customers might have to pay fees to both the company and its solicitors.