Debt management needed on the back of store card credit deals
Debt management needed on the back of store card credit deals
- Tuesday, 19 January 2010Debt management plans may be needed by people finding themselves in financial arrears after signing up to store credit cards.
Insolvency trade body R3 has warned that the practice is contributing to the rising levels of personal debt in the UK, as vulnerable customers view the store cards as an innocent solution to obtaining credit.
Research by the organisation found that 66 per cent of insolvency practitioners have seen cases where people have signed up for store credit cards without understanding the full consequences.
R3 president Peter Sargent said financially unqualified staff should be banned from selling credit over the shop counter as it was "frankly irresponsible".
"While these cards are presented as innocuous, they can lure vulnerable people into debt. They should only be sold by people who have been sufficiently trained to sell financial products."
The Department for Business Innovation and Skills states that people in the UK have £230 billion in debt on credit cards, loans, store cards and other credit deals.
The organisation wants to see improved transparency and control of credit and store card borrowing.

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