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November 8, 2007

CAB chides lenders and regulators as debt cases pile up

by Gill Montia

Story link: CAB chides lenders and regulators as debt cases pile up

The Citizens’ Advice Bureau (CAB) has accused irresponsible lenders of pushing people into debt while regulators are “asleep on the job”.

The number of debt cases dealt with by the CAB has increased to 1.7 million in the past 12 months, a rise of 20% on the previous year.

The charity is critical of both lenders and regulators and wants the financial services industry to be more active in tackling irresponsible lending.

Teresa Perchard, the CAB’s director of public policy states that: “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”.

The CAB is developing new services to help educate consumers about debt and is setting up a financial planning advice service aimed at improving people’s skills and confidence in managing finances.

At the same time, the charity is calling on regulators and businesses to play their part in addressing what it sees as one of the biggest issues facing the UK economy.

According to Datamonitor, the market research company, spending on plastic cards has increased 47% since 2002. It estimates that this will rise to £652 billion by 2011.

The most recent figures available show that Britons spent a record amount on credit, debit, charge and store cards in 2006, totalling £511 billion.

However, the data reflects an increasing reliance on plastic as according to the Bank of England, the amount of money outstanding on credit cards has been falling steadily since the beginning of 2006.

 

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