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Peter Black and South Wales West Liberal DemocratsRepresenting Aberavon, Bridgend, Gower, Neath, Ogmore, Port Talbot, and Swansea |
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AM calls for action on predatory lending by banks
July 19, 2006 3:40 PM
Banks need to work harder to prevent people falling into unsustainable debt according to the Welsh Liberal Democrat Assembly Member for South Wales West, Peter Black.
An industry insider has gone onto BBC One's 'Streets of Debt' series, to blow the whistle on some of the methods that the banks use to keep customers borrowing. For instance, some banks increase consumers' credit limits without their consent, sometimes as often as twice a year, or use a so-called 'financial health check' to sell more products. 'It's a very, very sophisticated tailored, tested marketing strategy and sales pitch to a public that have very little knowledge of what is going on,' said the whistle-blower.
"While people have a responsibility to keep their borrowing affordable, the banks cannot shuffle off all the blame for unmanageable debt onto their customers," said Mr Black. "Banks make money from people's borrowing, and it is clearly very tempting to them to get people to take on more debt so that they get the interest - it is after all what builds their enormous profits."
"With more and more people in debt, it is high time the banks ditched these predatory lending practices, and took up responsible lending instead. If they will not, then government will have to change the law to force them to do so. Debt causes untold misery for many. The banks need to change the way they approach their customers."
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