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06-11-2007
Regulators and businesses must do more to halt soaring levels of personal debt, according to national charity Citizens Advice. Its bureau network dealt with 1.7 million debt problems last year (2006/07), an all-time record high and an increase of 20% on the previous year.
The call for action on irresponsible lending is expected at the first ever Citizens Advice money conference – ‘Helping People Make the Most of their Money’ - being held today (Wednesday 6 November) at Westminster Hall in London.
Director of Public Policy Teresa Perchard will tell the 150-strong audience that Citizens Advice Bureaux are working hard to help more people tackle their debt problems. They are also developing more new services to help prevent debt, such as providing financial planning advice and improving people’s skills, understanding and confidence in managing money matters.
“But we need more help from regulators and businesses,” she will say. “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 (PPI), others seem to be asleep on the job.”
In her speech, she will warn that after the collapse of Farepak and the problems at Northern Rock, consumer confidence in the financial services market has hit an all time low. With total UK personal debt standing at £1.3 trillion, she is expected to identify personal finance and debt is one of the biggest issues facing the UK economy.
Cases reported by Citizens Advice Bureaux include a lone parent with a disabled child on income support who got into financial difficulties and went to her bank for help. She was given a loan of £17,800 with repayments of £370 per month, and sold payment protection for an additional £6,000 at 11%APR. The total to repay was £35,334.
In another case, a pensioner who had developed severe mental health problems following the death of her husband began spending heavily and over a ten year period acquired a total of 25 personal loans and credit card debts totalling £135,000. There appeared to have been no checks on her ability to repay and the more she borrowed the more was offered to her. The burden of all the debt became too much for her and she tried to commit suicide.
Notes to editors:
- The Citizens Advice service is a network of independent charities that helps people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more information in England and Wales see
 www.citizensadvice.org.uk
- The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
- Most Citizens Advice service staff are trained volunteers, working at over 3,300 locations across England and Wales.
- Advice and information www.adviceguide.org.uk
- Volunteer hotline 08451 264264 (local rate)
- Citizens Advice Guide to your rights, second edition: January 2008 - over 600 pages of practical, independent CAB advice. An invaluable resource for any bookshelf - available from all good bookshops; price £11.99; ISBN: 9780141034089
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