Editorial & Advertiser Disclosure Global Banking And Finance Review is an independent publisher which offers News, information, Analysis, Opinion, Press Releases, Reviews, Research reports covering various economies, industries, products, services and companies. The content available on globalbankingandfinance.com is sourced by a mixture of different methods which is not limited to content produced and supplied by various staff writers, journalists, freelancers, individuals, organizations, companies, PR agencies Sponsored Posts etc. The information available on this website is purely for educational and informational purposes only. We cannot guarantee the accuracy or applicability of any of the information provided at globalbankingandfinance.com with respect to your individual or personal circumstances. Please seek professional advice from a qualified professional before making any financial decisions. Globalbankingandfinance.com also links to various third party websites and we cannot guarantee the accuracy or applicability of the information provided by third party websites. Links from various articles on our site to third party websites are a mixture of non-sponsored links and sponsored links. Only a very small fraction of the links which point to external websites are affiliate links. Some of the links which you may click on our website may link to various products and services from our partners who may compensate us if you buy a service or product or fill a form or install an app. This will not incur additional cost to you. A very few articles on our website are sponsored posts or paid advertorials. These are marked as sponsored posts at the bottom of each post. For avoidance of any doubts and to make it easier for you to differentiate sponsored or non-sponsored articles or links, you may consider all articles on our site or all links to external websites as sponsored . Please note that some of the services or products which we talk about carry a high level of risk and may not be suitable for everyone. These may be complex services or products and we request the readers to consider this purely from an educational standpoint. The information provided on this website is general in nature. Global Banking & Finance Review expressly disclaims any liability without any limitation which may arise directly or indirectly from the use of such information.

Almost a third of consumers see default as the responsibility of lenders – not the borrower

According to research by Callcredit Information Group, 30% of consumers see defaulting on a loan payment as being the fault of the lender rather than the borrower.

The study also revealed that consumers are increasingly feeling financial pressure, with almost half (45%) saying the financial burden on their personal finances has increased and that they feel more pressure than they did the year before. In addition, more than a fifth (21%) of consumers say they have to rely more on credit for essentials and over two-fifths (41%) say that their ability to repay has not increased in line with higher credit limits they have been offered.

The research, which surveyed 2,004 UK-based consumers aged 18+, puts an emphasis on the importance of appropriate affordability checks by lenders, with over a third (36%) of consumers saying they have had a debt passed onto a collection agency at some point in their lives.

Some of the more common reasons for being contacted by a collections agency include:

  • For money owed on an unsecured credit arrangement (e.g. credit card or car loan) – 33%
  • For an outstanding utility bill – 33%
  • For an outstanding council tax bill – 31%
  • For an outstanding mobile phone bill – 28%

Adam Gillott, Head of Debt and Utilities at Callcredit Information Group, says: “Our research reveals that there is confusion about where the responsibility lies when it comes to preventing default. It’s evident that lenders must take charge when it comes to affordability assessments throughout the customer lifecycle. The importance of being able keep track of your customer’s financial situation accurately cannot be overstated – it allows lenders to initiate timely contact to query their customer’s financial status and implement appropriate repayment plans for those experiencing difficulties elsewhere, even before a payment is missed. In addition, it is important for lenders to verify that their affordability assessments are as robust as possible to ensure that they are lending responsibly.”

Interestingly, the research also found that 42% of consumers value a thorough and secure service over a fast and efficient one when it comes to credit checks. In spite of this, 61% were willing to wait only 60 seconds for background credit and security/ID checks for secured credit, such as a mortgage, with that figure being even higher for unsecured credit, for example a credit card, at 66%.

Gillott concludes, “These figures clearly indicate that consumers are a time precious group. Lenders should invest in technology that ensures they are providing thorough checks that are also fast enough to satisfy consumer expectation. It’s crucial that lenders look at each individual situation to develop relevant and sympathetic solutions to their unique circumstances.

“Accurately checking a customer’s affordability is about having relevant and reliable data on their financial position – income levels, financial commitments, levels of indebtedness, and previous credit history – throughout their customer lifecycle.”