The author of the work, Anthony Elliott, a former senior employee of Abbey National bank, believes that the government should prohibit financial companies from giving loans to customers who already have large debts. It is proposed to consider the critical amount of debt to be when unsecured loans exceed 45% of gross household income.
Currently, parliament is considering the law 'On Consumer Lending', which should strengthen control over this area of activity, as well as prevent the imposition of fines for early repayment of debt.
Meanwhile, according to the latest estimates, consumer credit debt in Britain amounts to 1 trillion pounds sterling, and the number of personal bankruptcies has reached a record high.
Elliott notes that in all the cases he analyzed, the amount of family debt was three times greater than these people were able to pay off within five years. He also points to the serious consequences of excessive debt for the physical and mental health of consumers.
The researcher proposes four main recommendations for regulating consumer lending: prohibit increasing the credit card lending limit without the consent of its holder; oblige lenders to organize reference services; oblige credit agencies to collect information on outstanding debts; prohibit deliberately increasing the debt burden on the borrower.
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