March 2014

Making a profit out of debt – the rise of the modern debt collector

The business of buying and selling debts is set to double over the five years to 2017, according to leading credit ratings agency Standard and Poor’s.   

Debt collectors are expected to be spending £1.5billion a year by then on buying up bad debts from banks and other lenders.

Most people don’t realise that if they are in arrears with their payments, the bank or lender may sell on that debt to a specialist debt collection company. 

Debt, harm and £5billion missing from the statistics

Official debt figures do not take into account an estimated £5billion of rent arrears, unpaid council tax and outstanding gas and electricity bills, according to a report from the thinktank Demos.  They described it as a“black hole” of hidden debt.

Researchers also created a “harm index”, which established which debts cause the most financial, emotional and social consequences.

MP calls for gambling ads on TV to be banned before the watershed

Jake Berry, MP for Rossendale and Darwen, is to introduce a 10 minute Rule Bill into Parliament seeking to ban all television advertising for gambling before the 9pm watershed. 

In a useful coincidence of timing, it will come before Parliament on 1 April, less than two weeks after the Chancellor announced that duty on fixed-odds betting terminals will be increased to 25%.

Spending the children’s inheritance?

A new report which categorises the over-50s according to their spending habits has highlighted a clear divide between the (mainly younger) groups with cash to spend and those who are very cautious or struggling to pay the bills.

Unusually, the categories include a separate one for smokers, some 9% of the research group, with 62% under 65 years of age.   Some 15% of this group’s spending is on tobacco and alcohol, with an average of £28 per week on cigarettes.  

New FCA rules designed to rein in short-term credit excesses

The Financial Conduct Authority has confirmed its “tough new rules” for the UK’s £200bn consumer credit market – with the biggest changes affecting high-cost short-term lenders.

Changes include mandatory affordability checks for payday borrowers and new powers for the FCA to ban any misleading adverts from payday lenders.