Debt enquiries rocket as high cost credit providers prey on the vulnerable

by | 21 August 2017 | Citizens Advice, Retford, Worksop

Citizens Advice Bassetlaw has seen a huge increase in the numbers of local people seeking advice for debt problems. The charity saw an increase of 37% in clients with debt problems during the first three months of 2017, compared with the same period in 2016.

Locally, over the past 18 months (November 2015 to May 2017), the highest number of individual debt cases were credit, store and charge card debts (182), followed closely by unsecured personal loans (149), then catalogue and mail order debt (42).

Citizens Advice Bassetlaw conducted interviews as part of the recent project and found that almost all clients interviewed, who had used high cost credit, said that they felt ‘harassed’ by the creditor. Some clients said that they received telephone calls at anti-social hours, numerous threatening letters or repeated doorstep visits to collect arrears. This behaviour could sometimes continue even after a reduced payment plan had been agreed and complied with.
Some creditors don’t take into account the financial situation of borrowers and choose to offer increased credit facilities or even a secondary loan to those already struggling. For example, an initial credit card loan of £4,500 escalated into a debt of £17,000 over a number of years, due to the encouragement of the provider.

The local charity is now calling for the cap on Payday Loans (introduced in January 2015) to be extended to other high cost credit products so that people can’t pay back more than twice what they borrowed.

A common factor among high cost credit users was the detrimental effect on the mental health of clients who suffered anxiety and depression, with some experiencing an exacerbation of existing physical and mental health problems. For some, this led to a strain on relationships, and/or loss of home.

At Citizens Advice Bassetlaw, an experienced Money Advice Team provides guidance and support to clients to deal with their financial problems. The service is free, confidential, impartial and independent. For information and advice, contact Citizens Advice Bassetlaw on their telephone service, 03444 111 444. A drop-in service is available at the Worksop office based in The Annexe, Queens Building, Potter Street, Worksop (next to the Savoy Cinema) on Mondays and Wednesdays from 9.30am to 3.00pm and on Fridays from 9.30am to 1.00pm and at the Retford outreach office, 17b The Square, Retford on Tuesdays and Thursdays from 10.00am to 2.00pm.