Apparently UK people are in much more Debt than ever before. Bankruptcy is on the increase and more and more people seem to be getting over the heads in debt. What do you think should be done about this? who is to blame, should the Credit Companies take some blame for throwing money at people? Should the Government intervene and do soemthing about it?

With American Finance comapanies making their mark in Britain with their "taking no prisioner" attitude with regards to people in financial trouble, I think it's time that the Government stepped in and did something. Several American companies are coming under serious scrutiny about their dept harrassment and chasing practices. I hear that some are currently been investigated and rightly so, even though they are American they should be forced to stick to British Laws.

There is already a lot of regulation and many guidelines in place for lenders. Probably the most contentious issue is that of responsible lending. The guidelines are that lenders should only lend to people what they can afford to repay. It is impossible for lenders to ascertain this without relying on the customer providing accurate information on their ingoings and outgoings. In other words it is up to the customer to decide what they can or cannot afford or what they wish to tell the lender about.

If the government introduce futher legislation that effectively removes a persons right to credit based on their inability to afford it then they tread a dangerous path only is there case for human rights campaigners, there is already existing legislation in the form of the bankruptcy laws. Which aim protect people from creditors but also prevent them obtaining credit.

If the government are to do anything about this problem then I feel there role should be one of educator. They should try and make people aware of the problems and pitfalls of buying on credit. They should maybe set up a scheme with the citizens advice bureau that can offer financial planning. Incidently the CAB already offer a great service to people who are in financial difficulty.

Cheers,

P

Originally posted by "Porkstone"

There is already a lot of regulation and many guidelines in place for lenders. Probably the most contentious issue is that of responsible lending. The guidelines are that lenders should only lend to people what they can afford to repay. It is impossible for lenders to ascertain this without relying on the customer providing accurate information on their ingoings and outgoings. In other words it is up to the customer to decide what they can or cannot afford or what they wish to tell the lender about.

If the government introduce futher legislation that effectively removes a persons right to credit based on their inability to afford it then they tread a dangerous path only is there case for human rights campaigners, there is already existing legislation in the form of the bankruptcy laws. Which aim protect people from creditors but also prevent them obtaining credit.

If the government are to do anything about this problem then I feel there role should be one of educator. They should try and make people aware of the problems and pitfalls of buying on credit. They should maybe set up a scheme with the citizens advice bureau that can offer financial planning. Incidently the CAB already offer a great service to people who are in financial difficulty.

Cheers,

P


You absolutley right about CAB but I don't feel enough people know about the great free service that they provide. Many people end up going to these Debt Management Companies who take a their own cut. The trouble is that the CAB doesn't get enough backing and the current people are only volunteers so are in short supply. It's worrying to know that some areas are also not covered by a CAB.

I'm in loads of debt, but you'd expect that since I'm a student. Student debt could be so easily solved if the government actually started paying for students to go to uni like they used to.

People should take responsibility for their own actions and then they wouldnt be in trouble in the first place. How daft can you get to deliberately spend spend and spend when you cannot afford it?

We have enough government interference in our lives without having more to protect us from ourselves. Hasn't the individual got sense to know when they cannot afford to purchase something?

I don't agree that we need laws for this kind of thing, if a person can't manage their own affair's then they should go back to school to learn how to, as they obviously haven't grown up.

Originally posted by "halevan"

People should take responsibility for their own actions and then they wouldnt be in trouble in the first place. How daft can you get to deliberately spend spend and spend when you cannot afford it?

We have enough government interference in our lives without having more to protect us from ourselves. Hasn't the individual got sense to know when they cannot afford to purchase something?

I don't agree that we need laws for this kind of thing, if a person can't manage their own affair's then they should go back to school to learn how to, as they obviously haven't grown up.

We need laws to protect debtors from themselves. These credit card companies throw money at people and often give them money when they know damn well that these people can't afford to pay it back...only then when the person is struggling to pay do they hound and hound the debtors, often breaking every rule in the book. They don't care if they debtors kill themselves as long as they get their money back. Sometimes people get in debt through no fault of their own. Made redundant, forced to give up work etc....these credit card companies especially the American ones don't give a damn, the majority of them refuse to co-operate and don't accept reduced payments or freeze interest. This means that the person gets in even more in debt.

Originally posted by Lickszz
With American Finance comapanies making their mark in Britain with their "taking no prisioner" attitude with regards to people in financial trouble, I think it's time that the Government stepped in and did something. Several American companies are coming under serious scrutiny about their dept harrassment and chasing practices. I hear that some are currently been investigated and rightly so, even though they are American they should be forced to stick to British Laws.

So what has our UK Government done about American finance companies entering the UK and throwing their weight about with little if any due regard for our laws and whether or not they are applying best practice to how they go about things.

I'd be more than interested in learning Lickszz information sources about some of these American institutions being investigated.

Originally posted by Lickszz
We need laws to protect debtors from themselves. These credit card companies throw money at people and often give them money when they know damn well that these people can't afford to pay it back...only then when the person is struggling to pay do they hound and hound the debtors, often breaking every rule in the book. They don't care if they debtors kill themselves as long as they get their money back. Sometimes people get in debt through no fault of their own. Made redundant, forced to give up work etc....these credit card companies especially the American ones don't give a damn, the majority of them refuse to co-operate and don't accept reduced payments or freeze interest. This means that the person gets in even more in debt.

what is the motive for a credit company to lend money to someone who can't pay it back.

Even if they seize assets they will have lost money overall, as debt collectors don't come for free.
They'd much rather lend money and receive a payment every month.

The only people to blame are the ones who borrow too much and don't plan or think ahead.

Of course any company operating in the UK has to abide by UK laws and any transgressions should be dealt with harshly.

Originally posted by Cyclone
Of course any company operating in the UK has to abide by UK laws and any transgressions should be dealt with harshly.

And how do you know what happens in practice or if the powers that be do actually take a harsh line with overseas companies which transgress our laws. Is it possible that because they are major institutions and have the clout to pay for hefty legal teams the regulators turn a blind eye and let these companies off the hook?

Originally posted by halevan
People should take responsibility for their own actions and then they wouldnt be in trouble in the first place. How daft can you get to deliberately spend spend and spend when you cannot afford it?

Occasionally, just occasionally, people do have problems that are out of their control.

Let me give you an example.

At 25, I was a high flying sales exec, sole earner for a mortgage, performing well above national averages for all sorts of things. I had a number of credit cards and a bank loan to pay for my new kitchen. My salary serviced all of my debt very well, all is hunkydory with the world.

At 26 I was diagnosed with cancer, spent 2 months in hospital and nearly 9 months unable to work. Still not too much trouble, as the mortgage insurance paid the mortgage, the loan insurance paid the loan payments, the card insurance paid bits off the credit cards.

I go back to work, trying to cope with disabilities as a result of surgery to remove Tumour Mk I, all of the insurers write to me to say that they will no longer cover me as I have made a claim. My earning potential is significantly reduced as a result of disability so I can't make big payments off cards or loan and 6 months down the line Tumour Mk II is discovered. I become medically retired at 29, with no insurance cover, salary or back up.

I contact the Consumer Credit Counselling Service (highly recommended by the way) as soon as I know that the worst is happening, and have spent the last 6 years paying people off, tiny bit by tiny bit. I think it will only take me another 8 years before I have paid everything and can hold my head up again.

STILL SAY THAT IT'S ALL MY OWN FAULT AND I DESERVE TO GO BACK TO SCHOOL TO GROW UP?

Please don't over generalise- it causes offence.

Originally posted by medusa666
STILL SAY THAT IT'S ALL MY OWN FAULT AND I DESERVE TO GO BACK TO SCHOOL TO GROW UP?

Please don't over generalise- it causes offence.

I think the original poster was making the point that legislation to stop people borrowing too much money would be unwise, as people are in control of their own money and can make their own choices.

It was more pertinent to people who do not plan ahead, which you clearly did - as with all borrowing, you can't cover every eventuality, but many people do borrow with no thought, or often intention, of paying it back.

Originally posted by Lickszz
Apparently UK people are in much more Debt than ever before. Bankruptcy is on the increase and more and more people seem to be getting over the heads in debt. What do you think should be done about this? who is to blame, should the Credit Companies take some blame for throwing money at people? Should the Government intervene and do soemthing about it?

With American Finance comapanies making their mark in Britain with their "taking no prisioner" attitude with regards to people in financial trouble, I think it's time that the Government stepped in and did something. Several American companies are coming under serious scrutiny about their dept harrassment and chasing practices. I hear that some are currently been investigated and rightly so, even though they are American they should be forced to stick to British Laws.

Those damn yanks, at it again, making people spend money and wanting to be paid back, shame on them :confused:

Originally posted by Sidla
I'm in loads of debt, but you'd expect that since I'm a student. Student debt could be so easily solved if the government actually started paying for students to go to uni like they used to.

Government paid for me to go to uni but im still in debt. Too much stuff out there to buy! Blame it on the STUFF!!!!

Originally posted by wendygs
And how do you know what happens in practice or if the powers that be do actually take a harsh line with overseas companies which transgress our laws. Is it possible that because they are major institutions and have the clout to pay for hefty legal teams the regulators turn a blind eye and let these companies off the hook?

I said Should.

Of course the British press would have a field day battering the government if they uncovered evidence of it not happening.
And before you can say "vote winner" Tony would have passed emergency legislation to allow the police to shoot CEO's whom he didn't like the look of.

pretty harsh. But you could argue that if you'd saved some money instead of borrowing it then you wouldn't be in this situation.
I'm surprised though that the insurance didn't just clear the debts.
My Dad was diagnosed with bowl cancer (some time ago, he's been fine since surgery and chemo about 5 years ago). The only loan he had at the time was a personal loan with the bank for a car. The insurance immediately paid it off in full because cancer is considered to be terminal. Shame he'd already paid of the mortgage, as that would have been cleared too.

I guess it depends on the insurance terms.

Originally posted by medusa666
Occasionally, just occasionally, people do have problems that are out of their control.

Let me give you an example.

At 25, I was a high flying sales exec, sole earner for a mortgage, performing well above national averages for all sorts of things. I had a number of credit cards and a bank loan to pay for my new kitchen. My salary serviced all of my debt very well, all is hunkydory with the world.

At 26 I was diagnosed with cancer, spent 2 months in hospital and nearly 9 months unable to work. Still not too much trouble, as the mortgage insurance paid the mortgage, the loan insurance paid the loan payments, the card insurance paid bits off the credit cards.

I go back to work, trying to cope with disabilities as a result of surgery to remove Tumour Mk I, all of the insurers write to me to say that they will no longer cover me as I have made a claim. My earning potential is significantly reduced as a result of disability so I can't make big payments off cards or loan and 6 months down the line Tumour Mk II is discovered. I become medically retired at 29, with no insurance cover, salary or back up.

I contact the Consumer Credit Counselling Service (highly recommended by the way) as soon as I know that the worst is happening, and have spent the last 6 years paying people off, tiny bit by tiny bit. I think it will only take me another 8 years before I have paid everything and can hold my head up again.

STILL SAY THAT IT'S ALL MY OWN FAULT AND I DESERVE TO GO BACK TO SCHOOL TO GROW UP?

Please don't over generalise- it causes offence.

Typically for an oldie I think borrowing is much too easy these days. We had to find a deposit of of 20% for our first house purchase, - these days it seems first-time buyers are offered 110% mortgages and are allowed much more generous terms in respect of the proportion of their income that can be used for repayments.
We were allowed a mortgage of just 2.5 times our joint income, but these days the figure seems to be 3.5 or even higher.

I also get the impression that lenders don't bother with checks on claimed income etc. As I mentioned in another thread the lenders are much too focussed on selliing repayment protection insurance to care much about the borrowers ability to meet repayments.

Consumerism has become our national religion and instant gratification our manner of worship - if you want it buy it and worry later about whether you can afford it :P

That presupposes they pay out which in at least one case I know of (also indicated in another thread on the same subject) took a very long time to resolve because a Bank clerk refused to admit the customer's medical evidence as and when supplied.

I'm surprised the Debt Advisor failed to push for all of the debts to be cleared so that medussa would not be saddled with all of this stress after it became clear there was a major lifestyle change due to cancer which, as cyclone previously observes, is a terminal condition.

I dont think it has anything to do with the terms and conditions of the agreement. And I so hope cyclone's life pans out as planned without hiccoughs of this ilk.

By the way cyclone the press had a field day re Citifinancial about 2 months ago which got blasted for unscrupulous financial practices.

i'm sure it does have to do with t's & c's. Not all insurance says that it will pay off the debt if diagnosed with a terminal disease. Some will just pay whilst you're off work.
Of course we all hope our life goes according to plan and without anything bad happening. I know I won't have a debt problem if something does happen though.

Greybeard - there is no incentive to lend money to people if they can't repay it. How do you make any money if the person declares bankruptcy?

Originally posted by Cyclone

Greybeard - there is no incentive to lend money to people if they can't repay it. How do you make any money if the person declares bankruptcy?

I don't know, and I don't think the banks do either. They have got too used to fat annual profits and it seems they're prepared to adopt increasingly desperate measures to try and maintain these profit levels in spite of the growing reluctance of customers to borrrow money. However if you read the business columns in the press you'll see some dire warnings about bad debt eating into their profits in the near future.

I was alerted to what was going on by the recent 'Real Story' programme on BBC1.

http://news.bbc.co.uk/1/hi/business/4528567.stm

http://news.bbc.co.uk/1/hi/business/4528567.stm

http://news.bbc.co.uk/1/hi/programmes/real_story/4724501.stm

http://news.bbc.co.uk/1/hi/programmes/real_story/4728741.stm

http://news.bbc.co.uk/1/hi/business/4663323.stm

Originally posted by Greybeard
I don't know, and I don't think the banks do either. They have got too used to fat annual profits and it seems they're prepared to adopt increasingly desperate measures to try and maintain these profit levels in spite of the growing reluctance of customers to borrrow money. However if you read the business columns in the press you'll see some dire warnings about bad debt eating into their profits in the near future.

I was alerted to what was going on by the recent 'Real Story' programme on BBC1.

http://news.bbc.co.uk/1/hi/business/4528567.stm

http://news.bbc.co.uk/1/hi/business/4528567.stm

http://news.bbc.co.uk/1/hi/programmes/real_story/4724501.stm

http://news.bbc.co.uk/1/hi/programmes/real_story/4728741.stm

http://news.bbc.co.uk/1/hi/business/4663323.stm

provisions for bad debt have been increased by a moderate amount.
Banks don't get desperate, they are run by people who play by the numbers. They don't deliberately lend money that they don't think will be repaid, there's no profit in that. They'd like to lend money to people who will repay it, as much as possible at the highest interest rate they can, but they definitely want it repaid, otherwise they lose money, not make it.

Originally posted by Cyclone
pretty harsh. But you could argue that if you'd saved some money instead of borrowing it then you wouldn't be in this situation.

I left university with no debt (and I don't know anybody else that managed that) by having 2 part time jobs through term time and working full time through holidays.

I saved the money for a deposit and the legal fees for my house when I was 21. How many people can manage totally without borrowing in the first few years of setting up in their first home, especially if they can only afford one that needs work doing?

Whatever anybody else says, I know that I did my utmost to get myself through every eventuality. The only thing I hadn't planned for was all of the bad things happening all at the same time so soon into my working life.

My cancer has taken my career, my independence, my ability to have children, and every hobby I've ever done. It's left me with scars, physical, emotional and financial. Since retiring I have gone back to uni part time and retrained as a teacher so that if I'm ever well enough to work again I have a career to go to.

I'm not asking for pity, I'm simply trying to get people to understand that not everybody who has a debt problem is a waster, and not all 'sob stories' are lies.

And a bit of advice- check the terms and conditions of any insurance that you take out VERY carefully!

Originally posted by medusa666
I left university with no debt (and I don't know anybody else that managed that) by having 2 part time jobs through term time and working full time through holidays.

I saved the money for a deposit and the legal fees for my house when I was 21. How many people can manage totally without borrowing in the first few years of setting up in their first home, especially if they can only afford one that needs work doing?

Whatever anybody else says, I know that I did my utmost to get myself through every eventuality. The only thing I hadn't planned for was all of the bad things happening all at the same time so soon into my working life.

My cancer has taken my career, my independence, my ability to have children, and every hobby I've ever done. It's left me with scars, physical, emotional and financial. Since retiring I have gone back to uni part time and retrained as a teacher so that if I'm ever well enough to work again I have a career to go to.

I'm not asking for pity, I'm simply trying to get people to understand that not everybody who has a debt problem is a waster, and not all 'sob stories' are lies.

And a bit of advice- check the terms and conditions of any insurance that you take out VERY carefully!


medussa, I resurrected this thread as I had had it up to my back to teeth with the naiive view some Forum users take re alleged irresponsible lending and putatively sympathetic view Banks take. The essence of my intense dissatisfaction can be found at: www.sheffieldforum.co.uk/showthread.php?s=&postid=549251#post549251

Quite frankly I think the issues go far wider than our respective cases; many consumers buy 2nd-hand cars on a credit agreement but do not know the car is stolen which therefore is not their property even though they may have paid for it. This compares to buying an IT system with an operating system and application software claimed to be pirated and opens up a whole can of legal worms. As a result people lose homes, jobs, professional reputation, social standing and families.

It is no surprise to learn Lloyds Bank was taken to task by the British Bankers Association for irresponsible lending. It would not surprise me to learn this and many other unpalatable practices are rife throughout financial services sector and that includes credit references.

The only other point I'd add to medussa's last post is that it is NOT just a case of checking insurance terms & conditions VERY carefully; it is also prudent to check with extreme care the terms & conditions of credit agreements, credit cards and loan agreements.

Originally posted by medusa666
I left university with no debt (and I don't know anybody else that managed that) by having 2 part time jobs through term time and working full time through holidays.

I saved the money for a deposit and the legal fees for my house when I was 21. How many people can manage totally without borrowing in the first few years of setting up in their first home, especially if they can only afford one that needs work doing?

And a bit of advice- check the terms and conditions of any insurance that you take out VERY carefully!

Medussa you have it spot on in answering Cyclone. I'm sure the majority wouldn't be able to buy a home or a nice car when saving as it would take years. Your warning show us all how it is and i for one coudl easily fall into the same trap as you. I know little insurance companies actually pay the debt off in full and some only pay for a period of time.

Did the life & critical insurance cover any of this? I know this is for a different thread by i now see that critical illness cover is now being updated. Years ago if you had cancer or a heart attack you got paid off but there's so many now who live through cancer that insurance companies are not paying out saying medical treatment has moved on.

its easy to criticise & condemn when you're not in the situation.

i went from school straight into the steelworks, after 5 years of my apprenticeship i was made redundant.
i had a mortgage, wife & kid on the way.
then interest hit 15%, negative equity occurred, we had a miners strike & the highest unemployment in living history.
i spent 4 years @ uni (on a grant of 4.5k per annum with a mortgae of 4.75k per annum) to get a teaching degree. upon qualifying new teachers were earning 8.5k and older teachers were getted shafted, i got a normal job paying more than teaching.
so at the age of 27 through no fault of my own i had massive debts problems.it has taken 10 years to clear off those debts, the credit files & the stigma attached.

if you have reached adulthood in the relative utopia of the last 10 years u will have litle idea of the meaning of getting in debt.

banks make profit from people being in debt.

Originally posted by youwhatref
Medussa you have it spot on in answering Cyclone. I'm sure the majority wouldn't be able to buy a home or a nice car when saving as it would take years. Your warning show us all how it is and i for one coudl easily fall into the same trap as you. I know little insurance companies actually pay the debt off in full and some only pay for a period of time.

Did the life & critical insurance cover any of this? I know this is for a different thread by i now see that critical illness cover is now being updated. Years ago if you had cancer or a heart attack you got paid off but there's so many now who live through cancer that insurance companies are not paying out saying medical treatment has moved on.

Ermm, the thing is you don't need a nice car. So if you borrow to finance it then you need to plan it don't you.
Obviously I have a mortgage, I also have credit cards, which are paid off every month.
I'm considering buying a newer car partially with finance. But should I suddenly loose my job the car will be sold and the finance repaid, the mortgage will be covered by the insurance paid on it, which has already proved that it will pay out when my partner was out of work.

Sometimes circumstances do conspire against you, if the interest rate went up to 15% tomorrow I expect that things would get a lot tighter.
Lenders will lend to you whatever they think you are capable of repaying, it's up to you to determine whether that really is the case and to plan ahead.
Medussa's situation wasn't that unsual, morgage, loan for a kitchen, although it sounds like he must have had a fair amount on the credit cards. But for the majority of people it doesn't happen like this, the reason they have debt problems is from borrowing too much with little thought to repayments.

Going back to the original post, with some exceptions such as Medusas case, the people to be blamed for having too much debt are the people borrowing, not the lenders lending.

Originally posted by Cyclone

Going back to the original post, with some exceptions such as Medusas case, the people to be blamed for having too much debt are the people borrowing, not the lenders lending.

People taking responsibility for their own actions? In this day and age?

How dare you suggest such a thing.

How very dare you!

Originally posted by Cyclone
Ermm, the thing is you don't need a nice car. So if you borrow to finance it then you need to plan it don't you.
Obviously I have a mortgage, I also have credit cards, which are paid off every month.
I'm considering buying a newer car partially with finance. But should I suddenly loose my job the car will be sold and the finance repaid, the mortgage will be covered by the insurance paid on it, which has already proved that it will pay out when my partner was out of work.

Sometimes circumstances do conspire against you, if the interest rate went up to 15% tomorrow I expect that things would get a lot tighter.
Lenders will lend to you whatever they think you are capable of repaying, it's up to you to determine whether that really is the case and to plan ahead.
Medussa's situation wasn't that unsual, morgage, loan for a kitchen, although it sounds like he must have had a fair amount on the credit cards. But for the majority of people it doesn't happen like this, the reason they have debt problems is from borrowing too much with little thought to repayments.

Going back to the original post, with some exceptions such as Medusas case, the people to be blamed for having too much debt are the people borrowing, not the lenders lending.

Fair points Cyclone. I dont need a nice car but choose to have one (nothing OTT just a newish Vectra) and we do have a C Card that is not paid off each month. However, we choose to live this way, we dont struggle in anyway and understand the consequences. We have a 10year fixed Mortgage and by the end of that doint envisage having any debt.

I also agree with your thoughts that it is down to the people borrowing rather than the lender

Originally posted by Cyclone
provisions for bad debt have been increased by a moderate amount.
Banks don't get desperate, they are run by people who play by the numbers. They don't deliberately lend money that they don't think will be repaid, there's no profit in that. They'd like to lend money to people who will repay it, as much as possible at the highest interest rate they can, but they definitely want it repaid, otherwise they lose money, not make it.


I didn't imply that banks deliberately lend money they know will not be repaid, but they are increasingly lowering the bar on credit-worthiness, - and taking greater risks to attract new business as that last link illustrates. However if you read the comments made by bank employees there is careless lending going on in the pursuit of targets and bonuses. There were many more admissions of this in the programme on 1st August. I suppose it's possible the senior hierarchy of the banks could be quite oblivious to the activities of their employees. .:rolleyes:

In their half year results Barclays' provision for bad debt has jumped by 20% and smaller lenders have increased their provision by as much as 40%, so what is moderate ?

During the second quarter of 2005, the number of court applications for home repossessions in England and Wales rose by 52% to 28,000, and in the same period, there were more than 15,000 individual insolvencies, an increase of 37%. No doubt the overheated housing market is responsible for much this but the banks must carry some blame also.

The banks have a duty, both to shareholders and to customers, to be cautious about a borrower's ability to repay a loan. But this caution has been abandoned in the numbers game. Their relentless pursuit of 'market share' has inevitably invovled a degree of inappropriate and even negligent lending.

Update

The Citizens Advice Bureaux have finally spat their dummy out over the payment protection insurance racket and have made a 'super-complaint' to the Office of Fair Trading.

http://www.guardian.co.uk/business/story/0,3604,1568548,00.html

http://www.guardian.co.uk/guardian_jobs_and_money/story/0,,1162829,00.html

Bank employees interviewed in the recent BBC 'Real Story' programme admitted they were under intense pressure to sell these policies and offered unsuitable loans to borrowers as a means to making a sale. Barclays make as much as 20% of their total profits from these often mis-sold policies. In some cases the insurance to cover loan repayments costs significantly more than the interest due on the loan.

check the terms and conditions of any insurance that you take out VERY carefully! The wises words for any contractual agreement you sign or verbally enter into.

So what has our UK Government done about American finance companies entering the UK and throwing their weight about with little if any due regard for our laws and whether or not they are applying best practice to how they go about things.

I'd be more than interested in learning Lickszz information sources about some of these American institutions being investigated.

What is with the anti American theme of this thread. Who says American credit firms have anything what ever to do with the problem. It is true that almost everything in American is bought on plastic but their companies are not the problem. Credit card companies are fairly hard to get credit from in my opinion and have to abide by very strict rules and regulations, as do any financial services organisations in this country.

If anyone is to blame it would the the new bread of 'loan shops' and debt agencies cropping up all over the place. All you need to do is watch commercial daytime TV to see what I mean. Norton, Ocean Finance to name a few promise to cut your current monthly debt related outgoings. Read the small print, most will charge around 20% APR which is a joke. If i had a credit card on 15% which had to be paid off in the next year my monthly outgoings would be more than if I was paying 20% over 3 years, just that I'd end up paying ahell of a lot more in the long run.

Consumers in general have become more financially aware though certain groups still don't have a clue, the young, the old and the poor, fact. (This is a greneralisation of society)

If you cannot get credit facilities from a high street bank, building society and their subsiduaries don't even bother with the others they are expensive and they will charge you because you are not credit worthy of the honest financial institutions. If you have CCJ's you have them for a reason.

At the end of the day our bad debt problem is due to poorly financially educated groups, companies who specifically target them, and peoples spending habits. If we were tought about personal finance at school maybe this would help.

And how do you know what happens in practice or if the powers that be do actually take a harsh line with overseas companies which transgress our laws. Is it possible that because they are major institutions and have the clout to pay for hefty legal teams the regulators turn a blind eye and let these companies off the hook?

The financial services industry is one if not the most highly regulated industry in the UK, they are regulated by one main body the Financial Services Authority who do a hell of a lot. Along with them they have the Consumer Credit Act, Financial Sevicies and Markets Act, Banking Code, Mortgage Code, Financial Services Ombudsman, and on top of all those a vast array of proffesional qualifications required to advise about any give product. American companies will also need to operate within the US law as well.

As for fat bank profits... Do you seriously believe they get their money from general purpose lending? Say you have a mortgage and you're paying 6% p.a, where do you think the bank gets their money to pay for you're house from? Many people with deposit accounts no doubt recieving 4% p.a back on their investment so they only make 2% p.a on the huge amount they lend you which considering is not too bad. Yes they do have other ways of raising capital to lend but I won't go into that. The way banks make the most of their money is through advising large companies, lending to them, and investing for them. Also by trading in securities, commodeties and other financial instruments.

Debit cards can only be used to pay for goods to the amount in the bank or up to the agreed overdraft limit, so thats not really debt because chances are your spending your hard earned money not borrowing so debit cards seems an invalid topic if you ask me.

Once again another example of people being poorly informed about finance. I not having a general rant at you all, I'm just pointing out that things are not so black and white as they may seem.

Well blueaura, I'm sure the regulators and banks are all delighted by your vote of confidence in them. I remain satisfied with everything which I've previously written and for the sake of clarity am more than happy to include the following link for your edification, consideration and comment.

www.boingboing.net/2006/03/05/citibank_under_fraud.html

For those who are not aware of things, Citifinancial is THE largest financial institution in the world.

For those who dont have the time to click on the link in the above post, I've cut and pasted an important statement about the way that financial institutions, operate.

"Citibank didn't handle Jake's problem in a customer-friendly way at all, and this appears to be standard procedure.

Also, it seems this incident is receiving little media attention, which begs the question: for each massive security breach we do hear about at Citibank or other large financial institutions, how many more occur without our awareness?"


I think this would seem to validate concerns I and others on SF have raised in relation to the regulation, accountability, governance and transparency of our regulators and the regulated.

What does customer service have to do with regulation? Regulatory bodies are there to inforce the law, not waste their time with customer disputes. Banks who follow the banking code are required to resolve an issue themselves, if this is unsatisfactory to the customer it can be taken to the Financial Services Ombudsman (www.financial-ombudsman.org.uk) all of which Jake could have done if in the UK, though I am sure they have a similar system in the US.

Citibank is the worlds largest bank so it doesn't supprise me that any problems they have will span several countries. The issue with Jake in your link was poor customer service but I am sure that he could only re-activate his pin in the US for a good reason, more than likely so his security could be insured incase he was not who he said he was and the card was being used fraudulently.

There would have been little media attention because it doesn't help if everyone in the affected countries not just Citibank customers are scared by the media. Citibank would have wanted to keep the problem as quiet as possible so as not to inform criminals of a problem in the system, and generate negative publicity for themselves.

I think this would seem to validate concerns I and others on SF have raised in relation to the regulation, accountability, governance and transparency of our regulators and the regulated.
I fail to see where any of your points are relavant to your arguement. You appear to be blinded by your grudge against Citigroup for the way they treated you, from what you said previously Citigroup in your case did breach regulation with your contract, but that is not the case for everyone elses problems. If you have not already done so I suggest you file a formal written complain with them and if the problem is not resolved refer the case to the Financial Services Ombudsman who can take it further for you. More Information (http://www.citibank.com/uk/personal/banking/info/bankingcode/index.htm). If you do think the FSA has done you an injustic you can formally complain about htem also More Information (www.fsa.gov.uk/consumer/pdfs/complaint.pdf).

• Anyone taking out any financial product should always read the terms and conditions and if they do not fully understand them get a legal proffesional to go other them with you so you know what is expected of you, what you are to expect from the financial institution and the terms to which the contract will be terminated or fulfilled.
• You can take out extra protection to eliminate risk on most products by insurance, it will cost you more but it provides you with security if something does go wrong (with insurance be sure to read the terms and conditions very carefully).
• To make sure you are getting the best use a reputable financial institution for you banking etc and if you use one which is a member of the Banking Code (http://www.bankingcode.org.uk/) scheme you will get extra assurances to service.
• If you have no clue about finances see a fully qualified independant Financial Advisor who can advise you on which products will suit your needs and can also provide you with a lot of information about the banks and the product.

wendysgs: I just read your origional post conecrning CF again and it may be that they were providing you with finance for the computer system which had illegal software installed on it which could easily be rectified by the purchase of some legal software and just a reinstallation or transfer of the legal CD Key onto that machine. If I were CF I would not class that as a clause to nullify the contract because finance could still be provided for the computer system itself, depends how they worded it.

Under British law you cannot sell anything illegal nor provide finance or security on it but the system was financed on good faith from the retailer who seems a bit dodgy. CF are as far as I am aware financing the system itself not the intangeble software installed on it so they are entitled to their money and to submit information to credit reference agencies if you miss payments.

Now if the person you bouht the system off was arund the issue would be with him. It's like if you buy a hosue which is near a cliff you 'should' get a full survey done if you don't and you get a mortgage on it you still have to pay up if it falls into the sea.