Action urged to help those in debt
Urgent action is needed to tackle irresponsible lending and threatening collection tactics which have left thousands of people in a spiral of debt and at risk of suicide, according to a report.Launched at the House of Lords, the report also states that debt will have a major impact on public health due to caps and cuts to welfare incomes.
The University of Brighton, which published the report, said it examined the long-term social and health costs of irresponsible lending, which has mushroomed as household incomes have fallen due to wage freezes, rising inflation and benefits cuts.
It said debt problems tended to arise from an unexpected event, such as redundancy, and those in debt are no more likely to spend irrationally than the general public - but they are often on very low incomes.
The report is based on in-depth interviews with debt counsellors, debt clients, and employees and former employees recruited from the finance sector, including high street banks.
It said those in debt found themselves victims of "distressing and persistent collection tactics that frequently constituted abuse". Debtors described being bullied, patronised and harassed, and that nothing they said would alter the "brutality".
The report said debt collection had a clear impact on people's mental health, including experiences of despair, depression, suicidal thoughts and what was often referred to as "breakdown".
The authors of the report, titled Responsible individuals and irresponsible institutions? Mental health and the UK credit industry, called on the Government and regulators to take more action to deal with irresponsible lending and collecting practices.
They said: "Without such work the multiple problems of over-indebtedness, and the associated mental health costs, cannot be effectively addressed."
Dr Carl Walker, from the University of Brighton's School of Applied Social Science, said: "Our research has revealed a deeply problematic culture of irresponsible lending, with people being routinely provided with lines of credit far beyond any possible capacity to repay."
It said those in debt found themselves victims of "distressing and persistent collection tactics that frequently constituted abuse". Debtors described being bullied, patronised and harassed, and that nothing they said would alter the "brutality".
The report said debt collection had a clear impact on people's mental health, including experiences of despair, depression, suicidal thoughts and what was often referred to as "breakdown".
The authors of the report, titled Responsible individuals and irresponsible institutions? Mental health and the UK credit industry, called on the Government and regulators to take more action to deal with irresponsible lending and collecting practices.
They said: "Without such work the multiple problems of over-indebtedness, and the associated mental health costs, cannot be effectively addressed."
Dr Carl Walker, from the University of Brighton's School of Applied Social Science, said: "Our research has revealed a deeply problematic culture of irresponsible lending, with people being routinely provided with lines of credit far beyond any possible capacity to repay."
© 2013 Press Association