Consumers see defaults as lenders’ responsibility
Nearly a third of consumers see defaulting on a loan payment as being the fault of the lender rather than the borrower, a report has found.
Research conducted on behalf of Callcredit Information Group found customer place and emphasis on appropriate affordability checks by lenders and almost half (45 percent) of the 2,004 adults surveyed said the burden on their personal finances has increased and that they feel more pressure than they did the year before.
In addition, more than a fifth (21 percent) of consumers said they have to rely more on credit for essentials and over two-fifths (41 percent) say that their ability to repay has not increased in line with higher credit limits they have been offered.
The research found that 42 percent of consumers value a thorough and secure service over a fast and efficient one when it comes to credit checks, while more than a third (36 percent) of consumers said they have had a debt passed onto a collection agency at some point in their lives.
Some of the more common reasons for being contacted by a collections agency include:
• Money owed on an unsecured credit arrangement (e.g. credit card or car loan) – 33 percent
• Outstanding utility bill – 33 percent
• Outstanding council tax bill – 31 percent
• Outstanding mobile phone bill – 28 percent
Adam Gillott, head of debt and utilities at Callcredit Information Group, said: “It’s evident that lenders must take charge when it comes to affordability assessments throughout the customer lifecycle.
“The importance of being able keep track of your customer’s financial situation accurately cannot be overstated – it allows lenders to initiate timely contact to query their customer’s financial status and implement appropriate repayment plans for those experiencing difficulties elsewhere, even before a payment is missed.”