Life on the front line of Britain's debt

Business has been booming for the Consumer Credit Counselling Service. Julian Knight meets the charity's founder

"We consumers are simply not borrowing enough." Not the words you expect to hear from the head of one of the UK's biggest debt charities.

Then again, Malcolm Hurlston who is stepping down as chief executive of the Consumer Credit Counselling Service next month, is not your usual consumer champion. He's always been a free thinker, willing to engage with the devil and tell it as he sees it rather than parroting the hoary old bash-the-banks line.

"Low interest rates have meant that relatively few people have been truly affected by the credit crunch. Do you know that we have record numbers of homeowners that are keeping up with their repayments? The average mortgage holder is £140 better off than three years ago. However, the noise in the media and the gloom of recession have genuinely spooked consumers, perhaps into retrenching too far.

"Prior to the credit crunch, we had too much lending; now we have too little going on. It's not just the banks' reluctance which is an issue."

In 1992, Mr Hurlston founded the CCCS, which offers free impartial debt advice to the public funded mostly by the banks, rather than calling on public money. Just at the right time: the Tory boom of the late 1980s was unwinding in spectacular fashion with repossession soaring above 100,000 a year and the term negative equity entering the language. Initially a small enterprise, the CCCS grew over the next 15 years bit by bit.

But the main explosion in its services has been since the onset of the credit crunch. In the past year alone, the charity has helped a third of a million people with their debts. The not-for-profit charity has seen it as its mission to take on the fee-charging debt advice providers, who were threatening to add to the misery of hundreds of thousands of debtors by tying them into individual voluntary arrangements, a type of insolvency, with punishing fees and penalties.

"My position is simple: there shouldn't be room for fee-charging debt advice. These firms can spend up to £1,000 to bring in a customer so to make that work they must sell them something," he said. "Some have been masquerading as 'free' advice before when they plainly aren't, and there is evidence of cold calling consumers, persuading them to take out an IVA, which is a massive step not to be taken lightly. Cold-calling is thoroughly reprehensible."

Recently the fee-charging debt firms were rocked when the Office of Fair Trading said it was looking at putting 129 companies out of business unless they improved the way that they treated customers.

"I hope the OFT, which has done a good job with this, stays strong. One thing to do is to further restrict these firms advertising – online, for instance – and make them publish the failure rates [how many of the fee-charging debt advice firms fail to keep up IVA repayments and thereby face penalties]."

Vulnerable consumers with mental health issues who are being targeted for loans are another serious concern, said Mr Hurlston. "Many of the people we help are bipolar. What happens is when they are in an up mood they take on debts which they can't afford, and then when their mood shifts down this closes in on them and this can further depress them, helping to fuel a negative cycle.

"What I'd like to see is a lending preference service, where consumers can register that they suffer mental health issues and would like not to have loans marketed to them. It would work like the telephone preference service. Alternatively, a note could be made on their credit file which lenders could see and then it's up to them to act responsibly and question if the potential borrower actually needs the money or perhaps is suffering a brief mental health episode."

More generally, Mr Hurlston reckons that the banks should stop cherry-picking the best risk customers and move into the short-term loans to people on lower incomes that are currently paying interest of up to several thousand per cent to payday loan firms or doorstep lending companies.

"There must be a way for this type of loan to be available cheaply and easily, helping those on lower incomes to get over a short-term hole in their finances. This would be a social good. Perhaps three or four banks combined could spread the risk."

As for money laundering rules, designed by the Financial Services Authority, these act as a barrier to the low paid. "Many people don't have passports or even a utility bill. If they are, for example, on a pre-payment meter. This denies them proper access to banking services. Sad to say, there is a bit of gold plating of these rules which go on in branch, putting new customers off. It's all part of the mistrust of the banks which goes back longer than the credit crunch. It started with the change of the bank manager from a respected figure in the community, making decisions, to nothing more than a salesman. I think finally some banks understand the damage done. They get it."

But with personal debt in the UK the highest in the Western world, do British consumers now get that they can't live beyond their means as they have done?

"The culture of homeownership has to be reviewed on both sides of the Atlantic," he said. "A mortgage is a 'gateway' debt: once you have one it's easier to borrow more and more." As for the announcement in the coalition government's "bonfire of the quangos" that Consumer Focus is to be axed, Mr Hurlston asks who will now stand up for consumers.

"It's difficult to see where the advocacy for consumers is going to come from in future. Perhaps the gonzo-style consumerism of moneysavingexpert.com and activism through Twitter will be the way we are going."

Compare with the Independent: See how much you could save by switching credit cards. Compare now

Arts & Entertainment
The original design with Charles' face clearly visible, which is on display around the capital
arts + ents The ad shows Prince Charles attired for his coronation in a crown and fur mantle with his mouth covered by a criss-cross of white duct tape
Sport
Mourinho lost his temper as well as the match
sportLiverpool handed title boost as Sunderland smash manager’s 77-game home league run
Voices
Sweet tweet: Victoria Beckham’s selfie, taken on her 40th birthday on Thursday
voices... and her career-long attack on the absurd criteria by which we define our 'betters', by Ellen E Jones
Sport
Mercedes Formula One driver Lewis Hamilton of Britain (front) drives ahead of Red Bull Formula One driver Daniel Ricciardo of Australia during the Chinese F1 Grand Prix at the Shanghai International circuit
sport Hamilton captured his third straight Formula One race with ease on Sunday, leading from start to finish to win the Chinese Grand Prix

VIDEO
Arts & Entertainment
Billie Jean King, who won the women’s Wimbledon title in 1967, when the first colour pictures were broadcast
tv
News
Snow has no plans to step back or reduce his workload
mediaIt's 25 years since Jon Snow first presented Channel 4 News, and his drive shows no sign of diminishing
Life & Style
food + drinkWhat’s not to like?
Voices
Clock off: France has had a 35‑hour working week since 1999
voicesThere's no truth to a law banning work emails after 6pm, but that didn’t stop media hysteria
Arts & Entertainment
Maisie Williams of Game of Thrones now
tvMajor roles that grow with their child actors are helping them to steal the show on TV
Arts & Entertainment
Kingdom Tower
architecture
Life & Style
Lana Del Rey, Alexa Chung and Cara Delevingne each carry their signature bag
fashionMulberry's decision to go for the super-rich backfired dramatically
Finacial products from our partners
Property search
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    1st Line Helpdesk Engineer Apprentice

    £150.00 per week: QA Apprenticeships: This company has been providing on site ...

    Telesales & Sales Support Apprentice

    £221.25 per week: QA Apprenticeships: This company is a well established Inter...

    Client Relationship Manager - SQL, Python

    £40000 - £50000 per annum: Harrington Starr: Client Relationship Manager - SQL...

    **Financial Services Tax**

    £35000 - £50000 per annum: Pro-Recruitment Group: Take your chance to join the...

    Day In a Page

    How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

    How I brokered a peace deal with Robert Mugabe

    Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
    Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

    British Muslims's Happy video attacked as 'sinful'

    The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
    Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

    Michael Williams: Do as I do, not as I pray

    Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
    A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

    A History of the First World War in 100 moments

    A visit to the Front Line by the Prime Minister's wife
    Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

    Jenny Collier: 'Sexism on stand-up circuit should be extinct'

    The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
    Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

    Cannes Film Festival

    Ken Loach and Mike Leigh to fight it out for the Palme d'Or
    The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

    The concept album makes surprise top ten return

    Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
    Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

    Lichen is surprise new ingredient on fine-dining menus

    Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
    10 best baking books

    10 best baking books

    Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
    Jury still out on Manchester City boss Manuel Pellegrini

    Jury still out on Pellegrini

    Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players
    Ben Stokes: 'Punching lockers isn't way forward'

    Ben Stokes: 'Punching lockers isn't way forward'

    The all-rounder has been hailed as future star after Ashes debut but incident in Caribbean added to doubts about discipline. Jon Culley meets a man looking to control his emotions
    Mark Johnston: First £1 million jackpot spurs him on

    Mark Johnston: First £1 million jackpot spurs him on

    The most prize money ever at an All-Weather race day is up for grabs at Lingfield on Friday, and the record-breaking trainer tells Jon Freeman how times have changed
    Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

    Ricky Gervais: 'People are waiting for me to fail'

    As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
    Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

    Mad Men returns for a final fling

    The suits are still sharp, but Don Draper has lost his edge
    Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

    Google finds a lift into space will never get off the ground

    Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit