Lenders Take Responsibility
It has been in the news recently that the reason for the UK’s increasing high debt level is because banks and credit card companies are lending irresponsibly. The lenders have been criticised for lending to those who can’t afford the level of debt and can’t make the repayments. These criticisms have lead to the lenders reviewing their lending policies and they now recognise the importance of lending more responsibly if they wish to have a good reputation.
An increasing number of lenders are tightening their lending criteria and turing away more customers if they beleive they can’t afford the debt. Barclaycard in Feburary claimed to turn down increasing numbers of applicants because of poor credit rating or financial circumstances.
Lenders are now being forced to write off some debtor’s debt because of their careless lending. Also many of the high street banks admitted they were writing off higher levels of debt.
For example Colin Griffths argued that he had been leant £100,000 by irresponsible lenders, as he was never in the position to make the repayments. His lenders after public exposure agreed to write off the debt. Many of the lenders apologised and said the appropriate steps weren’t taken during the application process and promised to rectify this, others blamed the client for giving false information.
Lenders are soon to get more pressure to lend responsibly as on the 17th March 2006 it was anounced that there is going to be a clamp down on irresponsible lending. There is going to be an amendment to the Consumer Credit Bill, which will add ‘irresponsible lending’ to the list of practces the OFT may consider to be deceitful and unfair, leading debtors being protected.
There are other options available to you and borrowing more money is rarely the best solution when experiencing financial difficulties. Solutions to help you if you are struggling to make the repayments on your unsecured debts include:
Written by markw on March 24th, 2006
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