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Citizens Advice highlights problems with high cost credit as consumer borrowing increases

Today, the Bank of England’s latest money and credit statistics show consumer credit increased by 10.3% in the year to May, to £199.7 billion.

Citizens Advice says problems with poor affordability checks in the high cost credit market remain a key threat to borrowers.

Citizens Advice Chief Executive, Gillian Guy, said:

“Problems with poor credit checks in the high cost credit market are trapping people with loans they can’t afford.

“We’ve helped people with over 30,000 high cost credit problems in the last year, including borrowers who’ve been given expensive rent to own or doorstep loan agreements despite having very little income.

“High cost credit lenders must act responsibly to prevent people getting caught in cycles of debt. Turning the Financial Conduct Authority’s current guidance on affordability checks into rules would ensure lenders must carry out thorough checks on borrowers. It would also give the regulator more power to penalise high cost credit lenders who fail to do this.”

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