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Tomorrow's Borrowers

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  • Tomorrow's Borrowers

    Report attached - Tomorrow's Borrowers - personal debt by 2025 and the policy response (Smith Institute and StepChange) ( I think Stella Creasy in 'launching' it today)

    Part of the problem seems to be that Britain has not had a meaningful public conversation about credit dependency. It has become an unspoken part of our national
    life. This surely needs to change.

    There needs to be a concerted national campaign designed to bring the issue out into the open and change attitudes and behaviour. This
    campaign needs to be on a par with the AIDS awareness campaign of the 1980s or the “five a day” fruit and vegetable campaign that began in the 1990s.

    Most effective would be a generic message that stops debt problems escalating, using role models and case studies. Possible themes could be around seeking help early, or having a plan
    to repay debt, or ensuring that the length of term of the debt does not exceed the term of the benefit for which the loan was originally taken out.

    Messages could be tested among target audiences and backed up by debt support agencies. Where local face-to-face services are available, signposting should also be provided through public
    agencies such as schools, housing associations and the NHS. The evidence presented in this report – of one in four households having a negative cash
    position, and one in ten having net debts of over £5,000, with households in this category owing half their debts to high-interest creditors – seems consistent with a significant
    proportion of people in Britain having unsustainable levels of debt.

    This presents a serious problem, which (as we highlight in the report) has negative consequences for the individuals concerned and for society as a whole. Preventing an increase in unmanageable personal debt must then surely be in the public interest.

    However, curbing the market for consumer credit, and specifically reducing the number of transactions conducted by people who are unable to repay, is far from easy and requires
    determined action by government and the regulators. It also demands changes in policies affecting where we live and the world of work, as well as a much bigger effort at improving
    financial literacy, especially among the young.

    Tackling problem debt in society is a huge and interconnected policy challenge, but given what we know about tomorrow’s borrowers
    it is a task that government, the regulators and the financial services industry itself cannot afford to ignore.
    Attached Files
    #staysafestayhome

    Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

    Received a Court Claim? Read >>>>> First Steps
    Tags: None

  • #2
    Re: Tomorrow's Borrowers

    Sorry to say,Debt is here to stay. Take a look at all the new gadgets iphones xboxes etc that every idiot and their uncle must have with the high cost of thes many have to borrow thye money to get them before that is paid off the next musthave comes and that needs buying.
    A culture of having the latest most expensive item has developed and will not go away.
    When some youngsters are tied to a phone contract costing 60 quid plus a month the only way to have other things is to borrow, Payday lenders would not exist without those who are willing to borrow and pay the high fees and interest,
    Is there an aswer to the problem? I for one are very doubtful.

    Comment


    • #3
      Re: Tomorrow's Borrowers

      '' Recent research by Ipsos MORI for the DBIS showed that most borrowers used payday loans to meet an urgent household need of some description. Only a small minority used payday loans to fund non-necessary expenses, such as holidays.'' '' payday loans still only account for less than 2% of total consumer borrowing ''


      This is the list of what the report concludes the FCA need to sort in April 2014

      • ensure that responsible lending rules are robust, particularly in high-risk areas

      like payday lending;

      • use its power to set threshold conditions for authorisation to thoroughly
      scrutinise the business models of consumer credit firms operating in sectors
      with past evidence of consumer detriment – payday lenders and other high-risk
      sectors should be required to apply for authorisation as soon as possible;

      • use its rule-making powers to ensure credit products are suitable and do not
      contain “bear traps” for consumers to fall into (for instance, this could be used
      to control roll-overs for payday loans, to prevent unfair snatch-back of cars
      subject to “bill of sale” lending, and to ensure that the minimum repayments on
      credit cards reflect a reasonable standard timescale for repayment);

      • take action against unfair and excessive default charges to prevent debts
      escalating as a result of a borrower’s financial difficulties;

      • incorporate industry best practice on arrears management or debt collection
      to ensure that households in financial difficulty who engage with their debt
      problem are protected from further collections and enforcement activity; and

      • ensure high standards of business conduct in the debt management sector.

      #staysafestayhome

      Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

      Received a Court Claim? Read >>>>> First Steps

      Comment

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