UK Consumers Keeping Lenders In The Dark About Their Financial Woes

01 September 2010

Nearly 70% of people who experience a sudden, significant impact on their finances never contact their bank or building society about their financial difficulties

Key findings:

  • 69% of people suffering from financial pressures in the past two years have never spoken to their bank or building society about their difficulties
  • 38% of adults do nothing to adjust to their changed circumstances when they first come under financial pressure
  • The 31% that do eventually speak to their bank or building society take on average two months to do so
  • 42% of British people who experienced unexpected financial problems did not come clean about their financial situation
  • Nearly two thirds (65%) of British adults have experienced some form of sudden change in their finances during the past two years

 

Independent research commissioned by Callcredit Information Group has today revealed that British consumers are storing up considerable problems for themselves and lenders by failing to keep their bank or building society informed about their financial woes. 69% of adults suffering from financial pressures over the past two years admit to failing to speak with their bank or building society about their financial difficulties, and 42% have not come completely clean about their financial situation when problems arise.

 

The results reveal that two thirds of British adults (65%) have experienced some form of sudden change in their finances during the last two years, particularly those with children (74%).  Only 8% contacted Citizens Advice or a debt charity when they first received the bad news - the same percentage as those who contacted their own bank or building society - leaving the vast majority of lenders ignorant of their possible debt stress and unable to offer support. Of those that did contact their bank or building society in the long term, 8% admitted they were not completely honest with them about their financial situation.

 

The results highlight that 24% of people who said they had suffered an unexpected financial shock over the past two years had seen their income suffer - with 6% taking a pay cut, 9% seeing a cut in working hours and 9% losing their job.

 

"These figures are extremely worrying," said Graham Lund, Managing Director of Callcredit. "What's particularly concerning is the number of people who fail to make their bank aware of sudden changes in their financial situation - and those that do get in touch aren't always completely honest. It's therefore extremely important that financial service providers use information and tools available to proactively monitor any changes in their consumers' financial situation and have sight of the bigger picture."

 

Graham Lund, Managing Director of Callcredit continued: "It's imperative that lenders help customers identify any issues as soon as possible in order to support them in managing their finances. Callcredit has a range of affordability solutions that provide an early warning system and support for customers approaching the limits of their affordability, and assesses their ability to repay their debt. Callcredit's CallMonitor is also the first service in the UK to provide daily customer profile triggers, which enable lenders to identify those customers who are most at risk of being overburdened with credit as soon as they get close to their limits."

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