James Daley: Thanks to banks, we're now a nation of addicts...

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The Independent Online

To what extent should consumers be held responsible for their actions? If a bank lends me more money than I can afford – and I blow it all and end up bankrupt – is it their fault for being an irresponsible lender, or mine for asking for it in the first place?

In a world where someone successfully sued McDonald's because it didn't warn them that their cup of coffee was hot enough to burn, I think it's clear that the onus is increasingly on the companies and not their customers to be responsible. Though the McDonald's case may be ludicrous, the principle that you must treat customers fairly if you want to sell them a product is one that's hard to disagree with. And in the world of financial services, where a wrong decision can cost consumers thousands and even ruin lives, it's even more important that they know what they're getting into.

So it was good to see that the Office of Fair Trading launch an investigation into irresponsible lending last month – setting out to check the sales tactics and procedures which banks go through when they're providing a new mortgage or a personal loan. In the years leading up to the credit crunch, many consumers were offered mortgages of more than six times their income, and loans and credit cards that they could not afford. Now, with the price of mortgages rising, and house prices falling, increasing numbers of people are finding their homes repossessed or are left insolvent.

I've always thought credit's a bit like crack – highly addictive and pretty dangerous. For a long time, however, banks were handing it out (credit, not crack, I should say) to anyone and everyone – so it's no wonder that we've ended up with a nation of addicts. In the post-credit crunch world, loans will not only be harder to come by and more expensive, but banks will also know that they can be held responsible for handing it out to the wrong people. A much better state of affairs, if you ask me.

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