She warns that misleading statements in adverts that make dubious claims or leave out important information might breach consumer protection regulations.
Businesses making these statements could face enforcement action by the Ministry of Justice which might ultimately result in authorisations being removed.
The Ministry of Justice has recently produced guidance for claims management firms.
Prentice says: “Vulnerable people facing debt problems need help and support. We have produced this guidance to protect innocent customers from being misled by businesses advertising easy and quick arrangements for outstanding loan, credit card and other similar debts to be written off and compensation to be obtained.
“We would urge anyone who is considering using a business offering such services to think carefully and seek independent advice before making any final decisions.
“This guidance is also an important reminder to businesses about the need to comply with rules on advertising and marketing and provide an effective service to their customers.’
Welcoming the new guidance, Ray Watson, Office of Fair Trading, director of Consumer Credit, says: “The OFT will not hesitate to take enforcement action against licensed claims management businesses who engage in unfair business practices by deliberately misleading vulnerable consumers about the services they offer.
“Businesses should also be aware that if they offer debt counselling or debt adjusting services without holding an appropriate licence, they will be committing a criminal offence and risk prosecution, and that any agreements they enter into with consumers whilst unlicensed may be unenforceable.’
The guidance is aimed at businesses offering claims management services for unenforceable agreements.
“Claims management businesses authorised by the Ministry of Justice have also been warned that when advising about the payment of debts or on rescheduling debts, they will need to be appropriately licensed under the Consumer Credit Act 1974 by the OFT.”