The warning to comply with the regulator’s Financial Debt Management Guidance follows an OFT review from the financial debt administration sector which discovered an "unacceptable" degree of non-compliance issues within the business.

These included misleading advertising, adviser incompetence and poor awareness from the Financial Ombudsman Service (FOS).

Independently audited evidence will now need to be submitted by the 129 companies within three months, to demonstrate that they have taken motion to address the regulator’s concerns. If evidence isn’t provided, the OFT will instigate licensing motion.

The OFT mentioned in a statement that it’s also looking to the two primary business bodies, the Financial debt Managers Requirements Association (DEMSA) and also the Financial debt Resolution Forum (DRF), to set an example in raising their requirements and meeting their commitments to be able to "make the business much more professional and responsible."

Ray Watson, director from the OFT’s client credit group, mentioned: "The degree of non-compliance we discovered across the business is unacceptable.

"Debt administration companies should be clear about their charges and also the choices obtainable to clients. If any from the 129 companies identified don’t enhance their requirements substantially they will probably be the subject of licensing motion by the OFT."

Misleading advertising was identified as the most substantial area of non-compliance, in specific failing to disclose when a fee is retained by the company and misrepresenting financial debt administration services as being free when they aren’t.

The OFT mentioned it discovered frontline advisers working for financial debt administration companies to be providing poor advice based on inadequate info. The regulator also plans to update its guidance to take explicit account of new and emerging unfair company practices.

The charity says it is looking to establish a partnership with a provider that will meet the high standards being set by the charity and the bureaux will be able to confidently recommend to debt clients.

It is inviting debt advice agencies who can meet specified quality standards are being invited to apply.

This must be further evidence of the increasing work load that the Citizens Advice Centres are under. The CAB has 394 bureaux’s in England and Wales and will start in October this year with a pilot of 100 offices.

Citizens Advice director of public policy Teresa Perchard said: "This is absolutely the kind of prompt and decisive action needed to tackle rogues taking advantage of the downturn.

The OFT and the Information Commissioner’s Office took action after consumers were cold-called either without prior consent or despite registering with the Telephone Preference Service. The OFT also found that most of the information given to consumers was potentially misleading or inaccurate, or missed out vital facts about the purpose of the call and the identity of the caller.

Some calls misled consumers into believing that they were one of the ‘chosen individuals’ contacted as part of a government scheme to help wipe out consumer debt; others were transferred to a commercial debt management business on the pretext of talking to a not-for-profit debt adviser; and, once referred to a different business, consumers were often not told that there was a fee payable for the advice and solutions offered.

When choosing a debt management company, you should always choose a reputable and professional organization suitably registered with the Office of Fair Trading and Information Commissioner.