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Hidden debts 'amount to millions'
http://www.x404.co.uk/forum/viewtopic.php?f=19&t=7923		 Page 1 of 1
Author:  Amnesia10 [ Sat Apr 24, 2010 2:12 pm ]
Post subject:  Hidden debts 'amount to millions'
http://news.bbc.co.uk/1/hi/business/8640611.stm

Quote:
People in the UK owe £55bn in hidden debts, according to a survey.
Nearly a third of people (31%) hide the true extent of debt from family members, according to the research by OnePoll for the Post Office.
Author:  pcernie [ Sat Apr 24, 2010 2:35 pm ]
Post subject:  Re: Hidden debts 'amount to millions'
Quote:
Nigel (who has asked us not to use his full name), aged 69, who lives near Bath, was unaware his wife had taken out seven store and credit cards.

Over a few years the money she owed had spiralled to more than £50,000.

She had a good credit score partly because she jointly owned the family home. They have now had to take out a mortgage on their house to clear the debt.

Nigel said he believed the credit card companies acted irresponsibly.


And, er, what about your wife? Sounds like she needs a good shaking :lol:
Author:  Amnesia10 [ Sat Apr 24, 2010 6:41 pm ]
Post subject:  Re: Hidden debts 'amount to millions'
It does seem that there needs to be a radical overhaul of the credit laws and even how credit records are kept. It seems crazy that one persons credit score can be damaged by another without the first person knowing about it. Maybe there should be a right by all owners of a property to know the liabilities of anyone else who is a a co owner. That or no one is responsible for anyone else's debts.
Author:  dogbert10 [ Sun Apr 25, 2010 8:59 am ]
Post subject:  Re: Hidden debts 'amount to millions'
No worse than the banks that gave out mortgages without checking whether people were telling the truth about their income.

They should make it so that you can only pay the minimum for a few months before it starts to increase to make sure you actually do pay back the money, and if you continue to pay off only a little at a time, your card should be blocked and/or your credit limit reduced. People have got to realise that you can't just go on spending if you don't have any intention of paying it back.
Author:  davrosG5 [ Sun Apr 25, 2010 9:20 am ]
Post subject:  Re: Hidden debts 'amount to millions'
Amnesia10 wrote:
It does seem that there needs to be a radical overhaul of the credit laws and even how credit records are kept. It seems crazy that one persons credit score can be damaged by another without the first person knowing about it. Maybe there should be a right by all owners of a property to know the liabilities of anyone else who is a a co owner. That or no one is responsible for anyone else's debts.


It is possible to derive this information but it's real pain the backside to do so.

I use the Experian Credit Expert site to periodically check up my credit rating information. One of the sections is financial associations and it lists everyone your record is linked to. If the rest of your information is fine then you can see who might be causing you problems. However all you have is a name and you have to get that person to obtain their own credit report.

I certainly don't see any reason why two people who want to establish a financial relationship shouldn't at least be able to get an idea about the other persons financial state before they sign on the dotted line. In the case of marriage/civil partnership then that should be automatic.

dogbert10 wrote:
They should make it so that you can only pay the minimum for a few months before it starts to increase to make sure you actually do pay back the money, and if you continue to pay off only a little at a time, your card should be blocked and/or your credit limit reduced. People have got to realise that you can't just go on spending if you don't have any intention of paying it back.


Surely that would actually put people into more debt to start with. If you are only permitted to pay the minimum payment for a few months you'll be racking up debt.
It would surely make more sense to start with a low credit limit and see how much the person pays off each month as it rises. People who only pay off the minimum amount each month would be seen as a higher risk than those who pay off larger amounts (or the full amount) each month and the credit limit could then rise progressively to whatever maximum is agreed between the customer and the bank. The rate at which the limit rises would be set depending on the repayment rate (minimum payments get the slowest or zero monthly rise while those who pay off the full amount each month get the fastest monthly rise, say after a delay of a couple of months).

The problem with the above system is that it seriously penalises people who do manage their finances properly as they get treated as if they don't. It's would also effectively kill off the usefulness of 0% balance transfers and purchase deals for those who do use them responsibly (mind you I doubt the banks would be heart broken by that as they make very little money out of these people).
Author:  Amnesia10 [ Sun Apr 25, 2010 9:52 am ]
Post subject:  Re: Hidden debts 'amount to millions'
I actually think that the individual should have free access to their data not once a year. It could be monthly. That would enable people to keep an eye on their own credit rating. It would also make detecting identity theft easier.
Author:  dogbert10 [ Sun Apr 25, 2010 3:12 pm ]
Post subject:  Re: Hidden debts 'amount to millions'
davrosG5 wrote:
Surely that would actually put people into more debt to start with. If you are only permitted to pay the minimum payment for a few months you'll be racking up debt.
It would surely make more sense to start with a low credit limit and see how much the person pays off each month as it rises. People who only pay off the minimum amount each month would be seen as a higher risk than those who pay off larger amounts (or the full amount) each month and the credit limit could then rise progressively to whatever maximum is agreed between the customer and the bank. The rate at which the limit rises would be set depending on the repayment rate (minimum payments get the slowest or zero monthly rise while those who pay off the full amount each month get the fastest monthly rise, say after a delay of a couple of months).

The problem with the above system is that it seriously penalises people who do manage their finances properly as they get treated as if they don't. It's would also effectively kill off the usefulness of 0% balance transfers and purchase deals for those who do use them responsibly (mind you I doubt the banks would be heart broken by that as they make very little money out of these people).



I wasn't suggesting forcing people to only pay the minimum each month - I was suggesting that if someone only pays the minimum amount each month for six months, for example, should have the minimum amount increased so the debt is paid off quicker and not left to get bigger. If someone continues to pay just the minimum amount, their credit limit should be dropped or their card frozen until the debt is paid off. There are a lot of people who seem to think they can just run up huge debts on credit cards and eventually it'll get written off.
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