Growing numbers of people are falling behind on credit card payments as household budgets strain under the weight of rising utility bills and living costs. Lenders have signalled to the Bank of England that they anticipate unpaid credit card debts will continue climbing through the final quarter of 2026, creating a surge in demand for debt guidance. However, not all advice comes with your best interests in mind—some providers employ tactics that can leave borrowers in a worse position than before.
The challenge facing struggling households is that while legitimate, free debt support exists, it sits alongside a growing number of unregulated firms using aggressive marketing and misleading claims to steer people towards expensive solutions. Understanding the difference between trustworthy help and predatory schemes is essential.
Why demand for debt help is rising
Household finances are under unprecedented pressure. According to StepChange's latest research, 38% of people surveyed found it difficult to keep up with household bills and credit commitments in recent months. Among those seeking help from the charity, 75% carried credit card debt, a rise from 69% in August 2025. The charity is now supporting 20% more clients than it anticipated this year, reflecting the scale of the crisis.
The Bank of England's third-quarter survey confirmed that credit card defaults rose in the three months to the end of August 2026, with lenders expecting them to increase further in the final quarter of the year.
How to find trustworthy debt advice
When finances unravel, the instinct to grab any lifeline is powerful. Social media platforms, search engine results, cold calls, and WhatsApp messages all promote supposed quick fixes for debt problems. Many of these offers come with upfront fees, exaggerated promises about erasing debt, and pressure to commit immediately.
Legitimate help is available at no cost. The government-backed Moneyhelper website lists impartial debt advisers, all of whom operate without charging fees. Before engaging any firm, verify that it holds authorisation from the Financial Conduct Authority (FCA) by cross-checking its details against the FCA's official register.
Those dissatisfied with an authorised provider's service can lodge a complaint and, if unresolved, escalate the matter to the independent Financial Ombudsman Service.
Alison Walters, director of consumer finance at the FCA, emphasised the importance of choosing the right support:
Anyone struggling with debt deserves advice that puts their interests first. Free, impartial debt advice is available to everyone, and no one should be pressured or misled into paying for a debt solution that may not be right for them.
What tactics do unscrupulous firms use?
Unregulated operators employ a well-documented playbook. The FCA has identified that some unauthorised firms harvest personal information through cold calling or online advertisements, sometimes posing as legitimate debt charities or debt collectors, then sell these details to companies offering paid debt solutions.
The FCA lists four specific warning signs to watch for: repeated pressure to make a quick decision, being coached to alter income or spending details on lender paperwork, not being informed about fee-free alternatives, and unclear or mismatched firm identity. Some people have reported being steered towards fee-charging arrangements such as Individual Voluntary Arrangements (IVAs) or certain debt management plans without being offered or properly informed about other options first.
Always ask who a firm works for and verify that their stated details match the company's official information. A simple online search reveals numerous businesses claiming to clear debt, but not all are legitimate.
Recent enforcement action underscores the scale of the problem. The FCA has stopped Curtis Faraday from accepting new debt advice customers after discovering that clients were being led to provide answers designed to make them appear eligible for fee-charging IVAs. Additionally, the FCA banned Howard Duckett, a senior manager at Beauforce Corporation, for lacking honesty and integrity; the regulator is urging anyone with Beauforce-arranged debt management plans to cease payments and seek alternative support.
What should you do if you need help?
Vikki Brownridge, chief executive at debt charity StepChange, advised:
Before making any decisions around how to deal with your debts, it's always worth getting full, free and impartial debt advice first, exploring all options to clear your debt in the safest and most sustainable way.
The FCA distinguishes between authorised debt advisers and lead generators. Firms that collect information through social media questionnaires are not authorised to give advice and must direct people to an authorised adviser instead. This distinction matters: only authorised firms are regulated and accountable.
What comes next
As the Bank of England's survey indicates, lenders expect credit card defaults to rise again in the fourth quarter of 2026. This forecast suggests that demand for debt guidance will continue to climb, making it even more important for struggling households to know where to find legitimate help and how to spot fraudulent schemes.
Key Facts:
- Credit card defaults rose in the three months to August 2026 and are expected to increase further in Q4 2026
- Free, impartial debt advice is available through government-backed Moneyhelper and debt charities such as StepChange
- Always verify that a debt adviser is authorised by the FCA before engaging their services
- Warning signs of unscrupulous firms include pressure to decide quickly, being coached to alter financial details, and not being told about fee-free alternatives
- The FCA has recently banned or restricted individuals and firms found to be misleading vulnerable borrowers
