Who is behind this Snapchat advert offering to write off your debt?

‘Britons born before 1999 could get debt relief’.

Next to a picture on social media app Snapchat of Ryan Reynolds teasing news about upcoming superhero film Deadpool 3, is this ‘sponsored’ post with its own teaser: that you can write off your debts.

All you need to do is take a free 60 second quiz, and you’ll see ‘how much you can get’.

In return, the company behind the advert will pass your details to an unidentified ‘professional authorised advisor’, who may or may not give you the right advice, so that they can earn a chunk of commission.

While Snapchat, an app primarily used for sending photos and videos between friends, is a social media platform predominantly used by young people, who may be particularly vulnerable to adverts like this, debt solutions being marketed this way is nothing new.

Last year, This is Money wrote about the trend of Individual Voluntary Arrangement debt solutions – which reached a record high in 2019 – being marketed as ‘life hacks’ on Google and other social media sites like Facebook.

Common messages attached to adverts included: ‘Write off 85 per cent of your debt from as little as £75 a month’, and ‘Thousands of Brits in debt are qualifying to have 75 per cent written off’.

This is Money has previously reported on how debt solutions like Individual Voluntary Arrangements have been marketed as ways to write off your debt by firms on commission

But while concerns have been raised by the Government, debt charities and regulators, it appears these adverts have not been stamped out.

StepChange Debt Charity’s Sue Anderson said: ‘These opportunists are now popping up on various different search and social media platforms, and we’ve heard from worried people who thought they were dealing with StepChange only to find that they had unwittingly fallen prey to a lead generation firm.

‘The Advertising Standards Authority, the FCA and the Insolvency Service all have a role to play in stamping out this behaviour, but solving the problem isn’t helped by the regulatory spaghetti involved. 

‘We’re working hard to try to help untangle the mess and put an end to people being duped.’

The advert said if you took a ‘free quiz’, which later turned out to involve your details and how much you owed, you could write off more your debts

Who is behind the adverts?

The adverts have been posted by Brighton-based ‘Flexible Digital Solutions’. It describes itself on its website as a ‘lead generation agency’, which focuses on ‘delivering high quality leads’, likely in return for commission.

Lead generation firms sign up clients, often through social media adverts, and pass them onto accredited and registered insolvency practitioners in return for commission.

As well as debt adverts, some of its other markets are funeral plans, life insurance, health insurance, equity release, personal injury, income protection and wills.

It said: ‘We aim to provide you the best quality leads at prices that provide you a great return on investment.

‘By working with carefully vetted suppliers, we can deliver leads at the volume and frequency that works for your teams. 

‘With a range of markets live, we can get you set up in less than 24 hours and have leads delivered to you via API or email in real time, as they come in.’

It added: ‘We do receive a fee from providers for acting as an intermediary’.

The advert was posted by Flexible Digital Solutions, an unregulated Brighton-based lead generator, which would earn commission from referring you to debt solution providers

The company was authorised by the Financial Conduct Authority for five months between 11 February and 11 July 2019 as an ‘appointed representative’, but since then has not been authorised.

This raises the question as to how it has been allowed to post these adverts.

This is Money asked Snapchat about its advertising policy, and also asked Flexible Digital Solutions for comment about the advert.

Snapchat said: ‘Advertisers must comply with Snap’s Terms of Service and Community Guidelines, and all other Snap policies governing the use of our Services.

‘Advertisers must be honest about the products, services, and content their ads promote; they must avoid content that misleads, deceives, or offends; and they must never compromise our users’ privacy.

‘Advertisers are responsible for ensuring that their ads are suitable for Snapchatters ages 13+ (or their selected audience) in each geographic area where the ads will run.’

When it came to financial adverts, Snapchat said adverts ‘must clearly and prominently disclose all applicable material terms and conditions to consumers prior to the submission of an application’. 

It said it did not permit adverts for get-rich-quick schemes, payday loans or ‘predatory lending’, or cryptocurrency without prior approval.

It also added adverts were banned which were ‘false or misleading, including deceptive claims, offers, functionality, or business practices.’

Flexible Digital Solutions did not respond to a request for comment by the time of publication.

The advert claimed to feature people who had got out of debt thanks to its services. However all the people involved were fake stock images

What rules are there on debt advertising?

While debt solutions like individual voluntary arrangements can only be carried out by professional insolvency practitioners, the rules around the marketing of them is slightly murkier, especially when third-party lead generators are doing it.

However, such has been the concern raised over the last few years that attempts have been made to crack down on this kind of advertising.

Last January the Insolvency Practitioners Association brought in new rules which said lead generators supplying firms with business must be authorised by the FCA, while six ‘volume’ IVA providers which account for 69 per cent of active IVAs have also come under heavier scrutiny.

If one of these volume IVA providers was accepting business through Flexible Digital Solutions, it would therefore be in breach of these rules, though the lead generator gives no indication as to who it provides business for.

Meanwhile last October Google announced it would only allow organisations that were either authorised by the FCA or were a regulated insolvency practitioner to advertise with it, although this has not been 100 per cent effective.

The IPA said in a statement: ‘We take the advertising of debt solutions very seriously, and they should not be regarded as a ‘life hack’.

‘Advertising employed by insolvency practitioners, and any services that they use, are subject to strict standards. This is especially the case where their work might relate to vulnerable people, including younger people.

‘In these areas, the IPA’s role is to inspect that advertising and other services are being used correctly by insolvency practitioners. 

‘Our scope allows us to form standards to which those we regulate must adhere. We work with the Financial Conduct Authority and the Advertising Standards Authority.

‘The IPA was the first recognised professional body to ask the volume Individual Voluntary Arrangement providers that it regulates to agree to only use FCA authorised lead generators.

‘Where any insolvency practitioner is not following this recommendation, they must still comply with the Insolvency Code of Ethics, which requires that any advertising or other form of marketing is clearly distinguishable as such and be legal, decent, honest and truthful.

‘We support the recent move by Google to stop the practice of lead generation firms appearing at the top of search results for debt advice. 

‘We would also support tighter controls across social media and other digital platforms, along with closer regulation of the initial advice once people respond to the adverts.’

Sue Anderson of StepChange added: ‘Despite Google’s helpful action, the debt advice impersonators are alive and kicking, and still hoodwinking people who are looking for debt advice.

‘In the meantime, please be very careful to make sure you go direct to the reputable debt charities, and please report imposters to Action Fraud and the Financial Conduct Authority.

‘If you do click on an advertising link that you believe to be from StepChange, check it takes you to www.stepchange.org – read the URL carefully as some imposter lead generators are using names that are very similar.’