Massive personal debt highlights the need for action on credit mis-selling

2.31.10pm UTC (GMT +0000) Fri 24th Aug 2007

Peter Black at the CAB

Welsh Liberal Democrat Social Justice spokesperson, Peter Black has expressed his concern at the fact that personal debt in the UK has outstripped our Gross Domestic Product for the first time ever.

Speaking in the light of a report from financial consultants Grant Thornton that suggests we owe £1335bn, which is £5bn more than the economy is worth, Mr. Black said that the government should take action to prevent credit mis-selling by the High Street banks and financial institutions.

"My main concern is the impact on younger people in particular. Rising house prices are forcing them to borrow ever-larger multiples of their salaries to buy a home, graduates are starting jobs with five-figure debts from tuition fees and living expenses, and yet the banks continue to target them with offers of massive lines of credit. Credit card debt alone is £126bn.

"The banks have a huge responsibility in this area, and some are not living up to it. Because they make far more money from borrowers than from savers and investors, it's clearly in their interest to get young people to borrow as soon as they can.

"The banks must learn how to behave in a more responsible manner and not add to the massive debt burden in Wales and the UK. If they refuse to do so, then they must be forced to be responsible by urgent government legislation. Credit mis-selling cannot be allowed to continue. It is ruining peoples' lives."