According to recent reports there has been a rash of debt firm closures in the UK over the past couple of the years, with the Ministry of Justice said to have closed one hundred companies dealing with injury compensation and debt write offs since 2007.

Officials from the Ministry of Justice have said that the reason the firms were closed down was because they were making claims that were misleading and were also using hard sell tactics to get consumers to pay high fees in order to get assistance from them.

Consumers have been warned to steer clear of offers that sound a little too good to be true, and one Ministry of Justice official said that the situation was worrying because in the current climate an increasing number of people were desperate with regards to their finances and were therefore especially vulnerable.

Another official said that these firms had been targeting people that were in high levels of debt and who would be more open to the services that they were offering.

One spokesperson said that most of these companies were operating with rules and regulations, but he added: “However, some companies choose to flout those rules and some also target consumers who find themselves in debt. People desperate for a way out of their financial troubles can be vulnerable to the misleading marketing that the Ministry of Justice Claims Management Regulator is continuing to tackle.”

He also said: “There has also been a trend towards high-pressure cold-calling from call centres, including making unsubstantiated claims and encouraging people into handing over fees there and then – a decision they regret later.”