The Office of Fair Trading (OFT) is aiming to protect British consumers who have entered an individual voluntary arrangement (IVA) by warning them of unscrupulous businesses that are looking to make their debt problems worse.

According to the OFT, there are a number of companies operating around the country that are providing insolvent Britons with misleading information with regard to their financial situation.

These firms have been telling people that they might have been mis-sold their IVA and could be better off if they entered bankruptcy, when this is not necessarily the case, the office has explained.

Ray Watson, OFT director for consumer credit, said: "Tackling companies who are engaging in unfair business practices by targeting vulnerable consumers with misleading advice and information, particularly if it leads to consumers becoming more over-indebted, is a key priority for the OFT."

Credit Action reported recently that one person in the UK is declared bankrupt or insolvent every four minutes.