The Office of Fair Trading (OFT) has launched a review of compliance levels across the debt management industry, it has been revealed.

The OFT will look into practices and adverts being used by debt management companies, as well as how well the firms are complying with its guidance on minimum standards.

The move follows a tightening-up of procedures and regulations governing the sector, with as many as 24 companies being prosecuted since the guidelines were made tougher in April 2008.

The organisation has also warned the industry against illegally cold-calling consumers and setting up websites to look as though they are run by the Government or charities.

Debt management firms themselves will be asked to complete an online questionnaire and consumers who want to complain about a firm will also be given the chance to have their say.

The OFT said tackling problems in the rapidly expanding sector was a high priority, as consumers who were struggling to keep up with their borrowings could end up worse off, as a result of being sold costly debt remedies that were inappropriate for their needs.

Ray Watson, OFT director of consumer credit, said: "This review will help us identify those practices that are harming consumers, as well as the reasons for non-compliance, and will help us target our enforcement action."