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Debt and you - who is the victim?
June 5, 2013 - 9:34am | Steve Rees at Vincent Bond & Co
Payday lenders are back in the spotlight, and rightly so judging by some of the practices discovered by the Citizens Advice Bureau.
It has found lending to under 18s, to people with mental health issues and even to people who were drunk when they signed up for the loan. Inadequate checks on borrowers meant lenders were chasing people for money who had not taken the loan out at all, but instead had had their identity stolen.
In addition, Citizens Advice discovered 12 in 14 promises to treat customers fairly were broken, that three in four payday customers struggled to repay the loan – amounting to 1,539 cases – and more than four in five people in difficulty with their payday lender did not receive an offer to freeze their interest rates, even though lenders had vowed to.
Other problems stemmed from lenders taking more from people’s accounts than was owed and refusing to refund the extra; taking so much money from bank accounts that people had no money to live on; harassing people for money and hounding people in the same property to shame the borrower; and not agreeing reasonable repayment plans for those who were unable to repay.
You might think this study uncovered such practices over a period of years, but it was actually just six months from November 26, 2012 to May 17, 2013 and covered feedback on 2,000 payday loans with 113 payday lenders. It makes grim reading that is for sure, and the sooner the Office of Fair Trading takes action the better.
Of course, payday lenders are just one side of the lending industry, and you may be finding it just as tough to repay borrowing you have on credit cards, other unsecured personal loans or even your mortgage. If you have lost your job, had your hours or salary reduced or suffered because your benefits have been cut since the changes at the start of the new tax year, then you may feel like you have nowhere to turn. But that is most certainly not the case, and you should get some help to sort out your debts as soon as possible, before things get out of hand.
Insolvency levels in the UK have fallen according to the latest official figures, but statistics can easily hide the real heartache of a particular family or individual caught up in a difficult position. If you are trying to help yourself out of debt, remember to take a look at your credit record before you apply for additional loans or credit cards, as being refused lending can have a negative impact on your score.
Get rid of any credit cards you no longer use, and make sure any debt you have repaid has the account closed on your credit file. All of these will help to put you in a better position in the eyes of lenders.
But most of all, do not borrow more to deal with existing borrowing if you are already struggling. Speak to an expert, and get the advice that is right for you before it is too late.
Steve Rees is debt consultant at Vincent Bond & CO
Here is the link to the study: http://www.citizensadvice.org.uk/ind...s_20130528.htm
Debt and you - who is the victim?
June 5, 2013 - 9:34am | Steve Rees at Vincent Bond & Co
Payday lenders are back in the spotlight, and rightly so judging by some of the practices discovered by the Citizens Advice Bureau.
It has found lending to under 18s, to people with mental health issues and even to people who were drunk when they signed up for the loan. Inadequate checks on borrowers meant lenders were chasing people for money who had not taken the loan out at all, but instead had had their identity stolen.
In addition, Citizens Advice discovered 12 in 14 promises to treat customers fairly were broken, that three in four payday customers struggled to repay the loan – amounting to 1,539 cases – and more than four in five people in difficulty with their payday lender did not receive an offer to freeze their interest rates, even though lenders had vowed to.
Other problems stemmed from lenders taking more from people’s accounts than was owed and refusing to refund the extra; taking so much money from bank accounts that people had no money to live on; harassing people for money and hounding people in the same property to shame the borrower; and not agreeing reasonable repayment plans for those who were unable to repay.
You might think this study uncovered such practices over a period of years, but it was actually just six months from November 26, 2012 to May 17, 2013 and covered feedback on 2,000 payday loans with 113 payday lenders. It makes grim reading that is for sure, and the sooner the Office of Fair Trading takes action the better.
Of course, payday lenders are just one side of the lending industry, and you may be finding it just as tough to repay borrowing you have on credit cards, other unsecured personal loans or even your mortgage. If you have lost your job, had your hours or salary reduced or suffered because your benefits have been cut since the changes at the start of the new tax year, then you may feel like you have nowhere to turn. But that is most certainly not the case, and you should get some help to sort out your debts as soon as possible, before things get out of hand.
Insolvency levels in the UK have fallen according to the latest official figures, but statistics can easily hide the real heartache of a particular family or individual caught up in a difficult position. If you are trying to help yourself out of debt, remember to take a look at your credit record before you apply for additional loans or credit cards, as being refused lending can have a negative impact on your score.
Get rid of any credit cards you no longer use, and make sure any debt you have repaid has the account closed on your credit file. All of these will help to put you in a better position in the eyes of lenders.
But most of all, do not borrow more to deal with existing borrowing if you are already struggling. Speak to an expert, and get the advice that is right for you before it is too late.
Steve Rees is debt consultant at Vincent Bond & CO
Here is the link to the study: http://www.citizensadvice.org.uk/ind...s_20130528.htm
