Poor Treatment by Creditors ‘Making Matters Worse’ for UK Debtors

June 8, 2016

The many thousands of people around the UK who are struggling to cope with debt-related issues are very often finding their personal finance problems being made much worse by the behaviour of their creditors.

That’s according to the debt help charity StepChange, which claims creditors routinely add interest charges and fees to core amounts borrowed by British borrowers even if they know those debtors have no way of managing their repayments.

The charity also points out in a new report that aggressive enforcement tactics and demands for unaffordable debt repayments are a major source of hardship and difficulty for people with problem debt throughout the country.

“Some creditors are providing support for their clients, but the lack of a consistent approach and the lack of statutory guarantees means that just one creditor engaging in poor practice can undermine a person’s ability to resolve their debt problems,” said Mike O’Connor, StepChange’s chief executive in a statement.

“We need to do more to help people struggling with mounting debt, and protect people from unaffordable high interest rates and charges coupled with heavy-handed tactics,” added Martin Lewis, the founder of the website MoneySavingExpert.com.

StepChange is calling for creditors to give their debtors more time to settle their debts before enforcement action is initiated and to freeze interest and fees when an individual is clearly struggling to meet repayment demands.

“By freezing the costs for people who are trying to repay, and allowing them time to get their finances back on track, it could also help lenders increase the amount they actually recover in the long run,” said Mr Lewis, who is backing StepChange’s calls for a shift in creditor behaviour.

A majority of respondents to a recent survey carried out by StepChange said that their creditors had continued to add fees and charges to their debts even where those creditors knew they were seeking expert debt advice.

Just over a quarter (26 per cent) of respondents to the same poll said that they had experience of debt collectors taking repayments from them that they could not afford.

If you live anywhere in Scotland and you are struggling to fend off your creditors then Scotland Debt Solutions can help. Call one of our experts today to arrange a free consultation.

John Baird

Insolvency Adviser

Tel: 0800 063 9250

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