Watchdog urges controlled credit for loans

Tue, 07 Nov 2006

Many UK residents who could already be facing debt are taking out personal loans without income checks, according to a consumer advice company.

In the last six months, some £11.9 billion has been advanced in loans without credit providers operating income checks, uSwitch has claimed.

Around 70 per cent of loan applicants have not been asked to provide proof of income, the company stated, which could be leading overstretched Britons further into debt.

The consumer advice group has urged lenders to ensure that adequate checks are carried out on the borrower's income, to ensure that they are in a position to repay the debt.

Nick White, director of financial services at the company, commented: "With one person in the UK falling victim to insolvency every minute of the working day you might think that the lenders would have learnt their lesson after record write-offs on bad debts, but the profits to be made are obviously too good to resist."

He added that the government could be forced to intervene if the current procedures for lending continue unaltered.

Abbie Shelton, spokesperson for the Association of British Credit Unions, recently stated that UK consumers are finding credit "too easy to get hold of" from credit card providers.


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