Banks’ Tactics Becoming Aggressive?
Wednesday, December 17th, 2008In the face of huge debts amongst their customers, some banks seem to be growing increasingly aggressive. According to PricewaterhouseCoopers, the average Briton currently holds a debt of £33,000, nearly twice the average figure of £17,000 seen just seven years ago, in 2000.
Although banks claim that they want to help Britons with their overload of debt, the Citizens Advice Bureau (CAB) has publicly acknowledged that they have received an increase in reports from consumers regarding increasingly aggressive tactics from banks. The preponderance of complaints against banks revolves around frequent telephone calls to the customers, attempting to convince them to purchase costly loans to ease their debts.
One HSBC customer reported that the bank was repeatedly asking him to switch to a ‘managed loan’ with a rate of 13%, double the amount he pays on his current loan. According to the customer, HSBC agreed to a reasonable amount of repayment per month for him, but said they can only allow that payment if he switches to the higher rate ‘managed loan.’ In response to the allegations, HSBC stated that, ‘as a responsible lender HSBC only offers a managed loan to customers when all other lending options have been exhausted’.
Many Britons carrying a large debt turn to debt advice charities for assistance. The CAB reported that even customers who had asked their banks to deal with the charities were still receiving aggressive phone calls. A spokesperson for the British Bankers’ Association (BBA), said that banks are happy to work with and negotiate with these charities.
Two factors suggested as causes for the increase in consumer debt are escalating property prices, increasing monthly mortgage payments, and the current credit crunch.