Complaints received about aggressive banks

Posted 2007-12-17

The Citizens Advice Bureau (CAB) has received a number of complaints about “aggressive tactics” being used by banks. Banks are allegedly targeting those in debt; repeatedly phoning customers, advising them to take out expensive loans to pay off their debts. The BBC discovered that customers who agreed a debt repayment plan with a debt charity were being pressured by to take out high interest loans in order consolidate their debts.

In one case, an HSBC customer rejected an offer of a “managed loan” with an interest rate of 13%. Despite this, he received numerous telephone calls from HSBC, urging him to change his mind and received letters from the bank, claiming they want to help customers in financial difficulty.

HSBC and the customer agreed an acceptable amount to be paid of monthly, but HSBC would only accept repayment if he took on a “managed loan”.  In response HSBC said:

“As a responsible lender HSBC only offers a managed loan to customers when all other options have been exhausted.”

The British Bankers’ Association (BBA) said that banks were happy to work alongside debt advice agencies. However, the CAB claimed that customers were still on the receiving end of bank’s aggressive tactics, even after the intervention of the CAB. The CAB said that they see many cases where customers have tried to arrange repayments with their banks, but have been asked for more than they can afford.

According to figures from Pricewaterhouse Coopers, British families are nearly in twice as much debt as seven years ago. Today the average Briton owes £33,000 compared to £17,000 in 2000. Rising house prices and subsequent mortgage repayments have contributed to the debt; however experts believe the global credit squeeze could mean hard times ahead.

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