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.
If your credit score has been affected by problem debt, you may be looking for ways to start rebuilding it and getting on with your financial future. Whether you are still struggling with your debt or have entered into an official debt management or insolvency procedure such as a Debt Arrangement Scheme (DAS), Trust Deed […]
If you’re worried that the council might take action against you for non-payment of council tax, entering into a Scottish trust deed can be a beneficial step. It stops legal action by all creditors included in the arrangement, and provides a ‘safe haven’ from which to regain control of your finances. As council tax arrears […]
A debt payment programme (DPP) remains on your credit file for six years, along with other default markers and court judgments that have been made against you. This can seriously affect your ability to borrow for this period of time, and longer. Even if you can secure borrowing, lenders are only likely to offer unfavourable […]
If you owe a debt of £5,000 or less, your creditor may send you a Simple Procedure Notice of Claim. This is a relatively new procedure that was brought in by the Scottish government and commenced on 28th November 2016 – their intention being to make it easier to resolve debt disputes. So if you’ve […]
A Bankruptcy Restriction Order may be made against you if it’s believed that you acted dishonestly, recklessly or unlawfully before you were made bankrupt, or during your bankruptcy. Your Trustee will inform the Accountant in Bankruptcy (AiB), and if their suspicions are upheld, a BRO of 2-15 years can be made depending on the seriousness […]
Debt payment programmes (DPPs) are an intrinsic part of the Debt Arrangement Scheme, which allows you to pay off unsecured debt at an affordable rate. If a debt payment programme is rejected by one or more creditors, the DAS Administrator can apply their discretion on whether to approve the plan, after using a test to […]