Debt on your doorstep
This report looks into the doorstep loan market in the UK and identifies common problems experienced by our clients. Doorstep loans are the largest high-cost credit market in the UK and are used by over 1.3 million customers. Last year Citizens Advice helped an estimated 23,600 people with unmanageable doorstep loan debts. Our clients who experienced problem debt from doorstep loans had an average doorstep loan debt of £690. A third of these clients had taken out than one doorstep loan.
Although some customers like the personalised experience of a doorstep loan, where a lending agent visits their house each week to collect a repayment, for other customers it can cause big problems. Citizens Advice has seen many cases where lending agents use high-pressure sales tactics, carry out inadequate affordability checks to issue a loan, and use aggressive practices to collect repayments. This can see clients slip into a pattern of doorstep loan debt and experience high levels of detriment as a result.
The doorstep loan market needs better regulation, including stronger rules on affordability checks and restrictions on loan refinancing. In this report we ask the Financial Conduct Authority to use its review of high-cost credit to build on the success of the regulation of payday lending. We would like to see an extension of the cost cap to cover doorstep loans and provide consistent protection across all high-cost credit markets.