Aggressive tactics being used by banks

Kay Mitchell | | 0 Comments

The Citizens Advice Bureau (CAB) has said it is receiving several complaints about growing ‘aggressive tactics’ being used by banks and that they are preying on those in debt.

The BBC has discovered that consumers who have an agreed debt repayment plan with a debt advice charity are being pressured to take out expensive loans in an attempt to ease their debts.

It has been established that banks are repeatedly telephoning customers to try to get them to take out costly loans, against the advice of debt charities.

An HSBC customer said that even though he had rejected the bank’s offer of a ‘managed loan’, they had continually telephoned him to try and make him change his mind. The interest rate on the managed loan is 13%, twice the amount he is currently paying.

The HSBC customer continued that he has had multiple letters from the bank saying they want to help people in financial difficulty when clearly they don’t. HSBC have agreed that the amount he can repay each month is acceptable. But the only way they will accept that repayment is if he signs up for what they call a managed loan.

The HSBC responded by saying ‘as a responsible lender HSBC only offers a managed loan to customers when all other lending options have been exhausted’.

The CAB said it was aware of many cases in which people in debt have offered to make payments where the bank has asked for more than they can afford. In some instances, customers had asked their bank to deal with a debt advice charity but they were still receiving telephone calls and aggressive letters.

A spokesperson for the CAB said they see a lot of cases of people coming in who have tried to talk to their banks about arranged payments and they haven’t been listened to and they have been asked for more than they can afford.

The banks’ organisation, the British Bankers’ Association (BBA), said banks were happy to work with debt advice charities but the CAB said they generally find that customers still receive pushy phone calls and aggressive letters from their lenders even after they have been dealing with them.

A spokesperson for the BBA said the work that banks do with intermediaries like money advice trusts are essentially negotiations.

International accountancy firm, PricewaterhouseCoopers, recently said the average Briton currently owes £33,000, compared with £17,000 in 2000, meaning families are now nearly twice as deeply in debt as they were just 7 years ago.

The rise is primarily due to escalating property prices and huge monthly mortgage repayments and experts are warning that the global credit squeeze means tough times ahead.