Helplines that claim to offer “free” and “impartial” addiction support have been reprimanded by the advertising watchdog for hiding the fact they are paid thousands in commission by private rehabilitation clinics.

Amid record drug death rates and high demand for services, one website is promising “free, impartial, expert” advice for those trying to find the best treatment.

Another “advisory service”, listed high in Google search results, said it will help people “choose the best drug & alcohol rehab for you”. “We will give you guidance on the best options for your circumstances,” it claimed.

But while they look like nonprofit services and claim to offer unbiased help, the websites are fronts for brokers that direct people to partner facilities in exchange for a referral fee.

Last week, the Advertising Standards Authority (ASA) issued rulings against seven companies, accusing them of misleading vulnerable people about the true nature of their businesses.

The ASA said that six brokers – Which Rehab?, Help 4 Addiction, Rehabs.UK, Rehab Guide, Action Rehab and Serenity Addiction Centres – had posed as direct treatment providers or impartial advice services when they were principally referral companies earning commission from partner facilities.

A seventh service, UK Addiction Treatment (Ukat), a chain with “200 CQC [Care Quality Commission] regulated detox and rehab beds across the UK” was found in breach of the advertising code for running a directory website, UK Rehab, that failed to make clear it owned the clinics it refers people to.

The UK Rehab website claimed that it had “no bias for one rehab clinic over another”, when in reality it was “principally a referral service for Ukat facilities”, the ASA said.

Ukat denied misleading people and disputes the regulator’s findings.

Services were also reprimanded for misleadingly using the Care Quality Commission, NHS or other public bodies’ logos to falsely suggest they were affiliated, and for using terms such as “addiction counsellors” or “specialists” to imply call handlers were health professionals when they were not.

Which Rehab? broke advertising rules by failing to “make immediately clear that it was principally a referral company that received commission for placements with partner rehabilitation facilities”, and also broke the rules by displaying the CQC name and logo on its homepage with the words “regulated by”.

The ASA said this would lead people to believe the service was CQC-regulated when it was not.

The rulings give an insight into the lucrative, loosely-regulated world of patient brokerage – a little-known industry that falls into a regulatory grey area because it is not technically a healthcare service, so is not overseen by the CQC.

Brokers deny their model is exploitative, arguing that they help patients access life-saving support while supporting smaller rehabs that would otherwise struggle to compete against well-known chains.

But Dominic McCann, a director of Castle Craig, a private rehab centre near Edinburgh, said it was a “social evil” and that patients often had “no idea” money was changing hands.

He said his company stopped using brokers after he realised there were some “very sharp practices going on”.

“They were calling up our finance department and demanding early payment. They’d want their commission for the whole length of stay upfront, even though people might drop out and want refunds,” he said. “And we were getting all these emails from the brokers with names of people, saying: ‘If this person writes to you, they are one of ours… And we want our commission.’” Depending on the facility, he said patients might pay between £10,000 and £30,000 for a 28-day private rehab stay, of which the broker could take 20%-40%. “What’s going on is a manipulation of a commercial process in order to enrich certain people who are making money from naive, vulnerable people,” he added. “It’s deeply cynical and harmful to the reputation of a whole sector that’s supposed to be based on integrity.” Prof Harry Sumnall of Liverpool John Moores University, who is an expert in substance use and has advised the government on drug policy, said it was unclear how brokers made decisions about where to refer patients “and whether this is done in the best interest of inquirers”.

While the brokers did not charge patients upfront, he said that commission payments could drive up private rehab prices overall.

The Ethical Marketing Campaign for Addiction Treatment – a coalition of addiction workers, academics and private providers that complained about patient brokers to the ASA – said it had heard of people being “referred to rehabs that aren’t suitable for them” because brokers were incentivised by commission.

“Not all rehabs use patient brokers but a lot of them are over a barrel because they can’t afford to advertise,” said campaign coordinator Evelyn McKechnie.. She called the ASA crackdown “unprecedented” but said the rulings were the “tip of the iceberg” and that problems were systemic.

The companies censured by the ASA have now been ordered to revise their advertising practices, to make their business models and commission structure clearer, and to remove false claims about direct service provision and affiliations.

Most made changes after being contacted by the regulator but the ASA said Action Rehab failed to respond.

The brokers were approached for comment by the Observer, but Action Rehab, Rehab Guide and Serenity Addiction Centres did not respond.

Rehabs.UK said it had a “robust triage system” that made “impartial and personalised” recommendations for clients based on “location, budget and treatment ethos”, and that it always put care before cost.

Ukat said it disagreed with the ASA’s ruling and claimed the complaint to the watchdog had been made by competitors in bad faith.

Daniel Gerrard, Ukat’s chief executive, said its UK Rehab website was an “online directory listing both free and private addiction treatment options”. “The suggestion that the Ukat group has misled clients is untrue and this has been communicated to the ASA,” he said.

Which Rehab? said it never claimed to be CQC-regulated, only that its partner rehabs “adhere to CQC standards”, but it has nevertheless updated its website. It said it was a free service that had “helped hundreds of people” and that commission payments did not lead to a higher price or influence its commitment to placing people in the “best and most suitable care”.

Jo Poots, head of complaints for the ASA, said: “These rulings send a clear message to operators in this sector. We will continue to closely monitor this area and will not hesitate to take action against businesses that break the rules.”

The Department of Health and Social Care said “attempting to exploit people with addictions” was “reprehensible”.

A spokesperson said: “Free drug and alcohol treatment is available in every part of the country and we urge anyone struggling to visit the NHS drug addiction website.” The CQC said it could take legal action against companies misusing its logo. Google said it would remove search listings from companies that “inaccurately represent their business practices”.

Nicholas Conn, chief executive of Help 4 Addiction, which broke advertising rules by failing to make clear it was a referral service that earned commission, said the ASA crackdown was “great” and would lead to greater transparency.

But he rejected wider criticisms of the patient brokering model, arguing that referral agents “provide a very valuable service” and Help 4 Addiction had supported “God knows how many people”. He said his company never pushed anything on anyone, that the maximum commission it took was 30% and that if anyone asked, the service said: “‘Yes, we get money if you go into rehab.’ We never lie to anybody.”

“We’re not bad people,” he said. “We have to earn money, no different to the way that a doctor has to earn money for helping people. We have a service to run. I think it’s fair that we get paid.”