Poorer families 'need curbs on money lenders'
Tuesday 15 December 1992
Those receiving benefits often find their income inadequate to pay their bills and turn to lenders as a 'sticking plaster' for the difficulties - which only leads to a spiral of long-term debt and poverty, the National Association of Citizens' Advice Bureaux says.
The report, The Cost of Living, is based on a wide-ranging study of the problems faced by some of the 1,782,000 clients who sought advice on consumer and debt matters in the 12 months to last April.
It also found that those who get into debt which they cannot repay are often faced with additional stress and expense as creditors employ Draconian measures to recover their money.
The study paints a bleak picture of hardship endured by households on benefit as they are forced to make impossible choices in the struggle to find money to pay essential bills.
To ease the burden, the association is demanding the introduction of means-tested benefits to cover the cost of mortgage interest and water charges, and the re- organisation of the Social Fund to ensure that money reaches vulnerable members of the community.
But along with any improvements in the levels of benefits, it is vital that families are protected from the activities of lenders and the high cost of credit.
The association reports that the introduction of a code of practice, Good Banking, adopted by the industry in March this year, brought no immediate reduction in the volume of complaints against banks.
Families who turned to credit companies in an effort to bridge the gap between living costs and income often found they were forced to pay exorbitant levels of interest since they had no other means of borrowing money.
It highlights one unemployed client in north London who borrowed pounds 250 at an annual interest rate of 972.6 per cent. Trading standards officers advised that action for extortionate credit rates under the Consumer Credit Act was unlikely to succeed, leading the association to conclude that the definition should be changed.
Those unable to service such debts invariably find themselves the subject of the unwelcome attentions of unscrupulous private bailiffs who use methods to recover property which the association says is unacceptable.
Citizens' Advice Bureaux receive about 78,000 complaints each year about bailiffs, and some clients say they have been threatened to the point where they seek other credit in order to hold on to their property.
Ann Abraham, the CAB chief executive, said: 'An increasing number of our clients are finding they simply cannot make ends meet, and have no choice but to resort to credit.
'We are asking the Government to ensure that levels of benefit are adequate, that safety nets such as the Social Fund work for the people who really need them, and credit industry practices are closely controlled.'
The Cost of Living; Social Policy Section, NACAB, 115-123 Pentonville Road, London N1 9LZ; pounds 6.50
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
Excellent Salary: Austen Lloyd: Exeter - An excellent opportunity for a Solici...
£17000 - £20000 per annum: Ashdown Group: IT Helpdesk Support Technician - 12 ...
£28000 - £32000 per annum + pension + holidays: The Jenrick Group: Maintenance...
£30000 - £38000 per annum + pesion + holidays: The Jenrick Group: World Wide S...