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Consumers Need 'More Help With Debt'

Nov 10, 2007
More work needs to be done to help consumers get to grips with making loan repayments and other aspects of their money management, an industry expert has declared.

Speaking at Helping People Make the Most of their Money - the inaugural money conference held by Citizens Advice - Teresa Perchard, director of public policy for the advisory service, stated that both businesses and regulatory bodies should help those borrowers who are struggling with their finances. Ms Perchard reported that financial services providers need to be more responsible when issuing personal loans and other types of credit, so making sure that consumers will successfully be able to meet demands for repayments.

In addition, the director also pointed towards moves carried out by Citizens Advice to aid people in handling their debts more effectively. For instance, the greater provision of financial advice to encourage a better attitude towards personal loans and other types of lending, in addition to giving people the confidence to manage their matters, is among the initiatives being carried out to stop Britons getting themselves in unmanageable debt difficulties.

She said: "But we need more help from regulators and businesses. 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."

Ms Perchard also pointed out that the problems experienced by Northern Rock earlier this year and the collapse of Farepak towards the end of 2006 have caused the public's confidence in the financial services sector to reach an all-time low. As an example of those consumers struggling with their finances, Citizens Advice highlighted the case of a pensioner, who over the course of a ten-year period, had taken out 25 personal loans and credit cards. With consequent debts of 135,000 pounds, the advisory service pointed out that there were no checks put into place to see if she would be able to afford to make repayments.

Her comments come after research from the charity showed that its staff handled a record 1.7 million debt enquiries over the course of 2006-07, a figure which is some 20 per cent higher than the previous year. She also reported that as Britons are an estimated 1.3 trillion pounds in the red via unsecured loans and other types of borrowing, personal finance and debt matters are now among the largest issues facing the nation's economy.

For those finding that they are struggling to meet numerous demands on their spending, the option of applying for a debt consolidation loan could well be the way for them to get back on their financial feet. Speaking earlier this year, Steven Baillie, head of loans for Sainsbury's Bank, reported that debt consolidation is the most popular reason for consumers to take out a personal loan. However, he advised those considering making an application to make sure that they do not go back into the red and that they take the time to shop around for a competitively-priced deal.
About the Author
Steve Smith writes for the 1 Stop Finance Shop where you can apply online for debt consolidation loans. We specialise in all sorts of personal loans, and secured loans with online application.
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