On 8 June 2016, StepChange published results of a recent survey, revealing how people with debt problems suffer interest, charges and aggressive enforcement and demands. 68% of people surveyed said that default charges made their problems harder to deal with, whilst 62% said that charges and interest had been applied by creditors who knew they were in financial difficulty.
65% of StepChange clients who were surveyed had experienced some level of bad debt collection, whilst 17% had experienced a threatening or intimidating visit from a doorstep collector. StepChange is now calling for a ‘breathing space’ scheme to be introduced, where people seeking advice for debt problems are given a period of six months to a year in which interest and charges are frozen, and enforcement action halted, in order that they can get debt advice and try and recover their finances.
StepChange have previously published an article about the practice of creditors increasing credit card limits without agreement from the debtor, on some occasions where the debtor is already experiencing financial difficulties. StepChange called on the FCA to ban the practice of unauthorised credit limit increases, instead allowing borrowers to choose to opt-in to credit card increases.
The Citizens Advice Bureau has released figures revealing people are paying off consumer debt before other priority debts. Citizens Advice has found that 3.6 million people would pay their credit card repayments before paying their rent or mortgage, with 6.5 million people who would pay their credit card before paying their council tax.
Citizens Advice took the opportunity to urge consumers to repay their household bills before outstanding consumer credit debts to prevent themselves falling into greater financial difficulty.