Action needed on soaring debt

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Post by IVA News » Wed Nov 07, 2007 11:19 am
'Action needed' on soaring debt

Irresponsible lenders are pushing people into debt, but regulators are "asleep on the job", a charity warns.

Citizens Advice says its staff dealt with a record 1.7 million debt problems during the last 12 months, an increase of 20% on the previous year.

The charity says it is working hard to help more people deal with their financial problems.

But it wants the financial services industry to do more to tackle irresponsible lending.

The director of public policy at Citizens Advice, Teresa Perchard, said: "Time and time again, we come across people in desperate straits who need not be there if the firm who lent them money had acted responsibly on day one.

"And while some regulators have taken action on scandals like the mis-selling of payment protection insurance, others seem to be asleep on the job," she added.

Falling consumer confidence

The call for action comes as the charity holds a conference on helping people to make the most of their money.

Citizens Advice is developing more new services to help prevent debt, such as providing financial planning advice, and improving people's skills and confidence.

But it says regulators and businesses must play their part to address one of the biggest issues facing the UK economy.

Teresa Perchard also warns that the collapse of Farepak and the problems at Northern Rock have pushed consumer confidence in the financial services market to an "all-time low".

Her comments come as new figures show Britons spent a record £511bn on credit, debit, charge and store cards in 2006.

Plastic spending has soared by 47% since 2002, according to market analyst Datamonitor.

The group estimates the amount spent on cards will reach £652bn by 2011.

But despite the increasing reliance on plastic, figures from the Bank of England show that the amount of money outstanding on credit cards has been falling steadily since the beginning of 2006.


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