11/May/2005

CONCERNED ABOUT DEBT?
National Debtline: A free, confidential and independent service funded by the Department of Trade and Industry and the credit industry. Tel: 0808 808 4000

Business Debtline: Provides a free telephone debt counselling service for self-employed and small businesses, funded by banks. Tel: 0800 197 6026

Consumer Credit Counselling Service: Funded entirely by the credit industry, the service offers advice to people in debt. Tel: 0800 138 1111 or go to www.cccs.co.uk

Citizens Advice: Offers free, independent and confidential advice from more than 700 locations throughout the UK. Tel: 0207 833 2181 or go to www.citizensadvice.org.uk

More information
The Consumer Credit Counselling Service (CCCS) has reported that calls in December were up by 77% on the same month in 2003.

The Leeds-based charity is funded by creditors returning a percentage of the money repaid to them, through debt management plans and is a completely free service.
CCCS also reported that it had received more than 1,000 calls on 4 January, the first working day after the Christmas and New Year break, the most calls it has received in one day.

Debt counsellors say the pressure of Christmas and the wide availability of credit are partly to blame for the upsurge.

Debt binge
The amount of money owed by UK consumers broke through the symbolic £1 trillion level in July.
UK household debt is rising at a faster rate than in the US and most major European countries.

The upsurge in people contacting the debt helpline during Christmas followed a steady increase of people seeking debt help throughout 2004.

The CCCS said calls were up by 40% during the year.

Ignoring risk
One major problem is that many people choose to ignore their debt problems.

According to a previous study, half of people affected with problem debts wait for more than a year before they can face dealing with it.

By then, they can find themselves in a far worse position and find it difficult to negotiate with creditors.

Debt counsellors are advising people to seek help early, prioritise their debts and not to take out more credit to pay off existing debts.

"We are choosing to interpret these figures optimistically. That people are getting the message that they should seek help as soon as possible," said Frances Walker, a spokesman for CCCS.

An example
Wed 11 May 2005
SO now we know where those bumper banking profits come from. Staff are apparently falling over themselves to push loans, credit cards and other enticing financial products in a bid to please bosses and pocket huge personal bonuses.

The BBC’s evidence that Lloyds TSB workers have been selling large loans to people without making proper checks on their ability to repay them highlights how easily things can spiral out of control.

In one extreme case - triggering some sympathy but utter disbelief - a Swansea couple were encouraged to borrow £100,000 on a joint annual income of just £5000.

Worryingly, consumer champions Which? say if the BBC had investigated any big bank in the same way it would likely have come up with similar findings.

Britain’s banking heavyweights have recently been boasting about putting thousands of extra staff into high street branches - with many of them there to flog financial products, adding to the country’s trillion-pound personal debt mountain.

Now, I’m the first to recognise that responsibility is a two-way street. Personal experience can testify to just how easy it can be to rack up a four-figure debt - believe me, interest-bearing credit cards and student life do not mix.
However, the lenders must shoulder much of the blame.
It has become far too easy for just about anyone to get their hands on dizzying amounts of cash and credit.

The stringent rules that banks point to as a safety net are all fine and well, but they are no substitute for a proper face-to-face chat.

Back in the early 80s as a teenager barely a year out of high school, my first encounter with "the bank manager" meant proving my financial worth in order to secure the princely sum of £700.

The sweaty handshake may have done me no favours, but after a 20-minute probe I was promised the funds within 24 hours.

These days, with competition so cut-throat and junior banking staff chasing bonuses and commission, the process tends to be a five-minute box-ticking affair - if there’s any human contact at all, that is.

The banking sector is already under fire for profiting from high charges.

Success should be rewarded, of course, but if those looking after our money are to restore their reputations, they ought to start by relieving the pressure on staff to meet sales targets at any price.