COSTS are rising, times are tough and those pesky debts will just not come down. A situation experienced by many of us in this last year or two.

Then one day, you hear an advertisement on the radio, see a poster on a mobile billboard, or speak to a man you’ve never met before in a shopping centre – all promising that they have the answer. “We can wipe your debt and restore your credit history”.

Problem solved? It would appear, not necessarily so.

During any period of financial difficulty, we always see the emergence of companies and individuals who can “find a solution” for vulnerable individuals.

These solutions often come with a cost, but on the face of it look very appealing.

This last year has been no exception.

This time it is the turn of companies offering to write off unenforceable Consumer Credit Act agreements such as credit cards and personal loans, thus leaving you debt free to carry on with your life (although you have already spent the money – but that’s another story).

These schemes have been heavily promoted of late, and have increasingly come under the scrutiny of many industry councils and charities.

In February, the national charity Citizens Advice Bureau (CAB) warned people to beware of bogus offers and misleading schemes.

Firms can typically charge about £500 up front to check one credit agreement, with no guarantee that they will be able to make a successful challenge.

Where people have several debts, the fees can quickly mount up to several thousands of pounds and people may then be sold a “no win, no fee” agreement to take legal action that can cost them even more.

Cases reported by CAB included that of a couple paying off debts of about £20,000 on terms negotiated by a free debt advice service. Having seen the claims made in one advertisement, they were on the verge of handing over £1,275 to get all their debts checked.

The CAB explained they could do this for free, and in fact only one minor debt was likely to be unenforceable. The CAB commented that if the clients had acted on the advertisement, they would still have to pay their debts but would have spent £1,275 for the privilege of being told this.

On Wednesday of last week, the BBC also reported on a case where the Advertising Standards Authority (ASA) had taken action against a firm for again “misleading advertisements”.

The firm told the ASA that 76 per cent of the credit card agreements, and 85 per cent 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.

With much unease in the market and the national press about such companies at present, I personally would seek advice from a well-established and well-known source, such as the CAB.

This should not only give you peace of mind, but also save you money in the process. And isn’t that why you needed advice in the first place?

■ Karl Pemberton is director of Active Financial Services, in Guisborough. Call him on 01287-632367.