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OFT alert for people in debt

Coronation Street star launches campaign

PN 150/03     19 November 2003

With total consumer credit debt, excluding mortgages, reaching £168 billion (see note 1) and average consumer debt at over £6800 (see note 2) per household, the OFT is today launching a major debt advice campaign.

Coronation Street star Sue Cleaver, who plays in debt Eileen Grimshaw, has lent her support to the OFT campaign, In Debt? Help Yourself Out! which is aimed at helping people with debts they are unable to control. 

The OFT advises those in debt:

• don't panic or ignore the problem, it won't go away
• seek impartial advice
• contact those to whom you owe money – they may be able to help
• keep copies of all letters you send and get about your debts
• prioritise your debts – like mortgage or rent, or those which cost you most.

Penny Boys, OFT Executive Director, says:

'Coping with debt early on is the key to avoiding serious problems. You should act as soon as the bills start to mount up or payments on credit agreements are missed. Don't bury your head in the sand and hope it will go away – it won't'.

The OFT also warns people to think very carefully before borrowing more to pay off their debts. No one should be rushed into signing an agreement. It is best to seek impartial advice and to ensure that the full costs of any new deal are fully understood, for example arrangement fees, length of the deal and any further penalty payments.

Other debt facts:

• the total consumer debt (including mortgages) is £906 billion (see note 1)
• the total lending to individuals in September 2003 was £10.7 billion (see note 1)
• 23 per cent of people do not know how much they owe (see note 3)
• one in four people use credit to pay household bills and meet day-to-day expenses (see note 4)

The OFT has produced a debt pocket guide 'In debt? Help yourself out!' for consumers, it is available from OFT, PO Box 366, Hayes UB3 1XB 0800 328 9382 oft@eclogistics.co.uk

The campaign also includes radio advertising, regional press advertising, packs for local trading standards officers and information on the OFT's website.

SOURCES OF ADVICE

Citizens Advice Bureaux

Citizens Advice Bureaux give free, confidential and impartial advice on debt. Details of your nearest bureau can be found in your local telephone directory. See also Citizens Advice Scotland.

Advice UK

(Were Federation of Information and Advice Centres)
A large network of advice providing organisations. Contact independent advice agencies through Advice UK at:
Advice UK, 12th Floor, New London Bridge House,
25 London Bridge Street, London SE1 9ST
Tel 020 7407 4070 (National) Tel 020 7407 6611 (London)
For agencies in Northern Ireland contact the Association of Independent Advice Centres on 028 9064 5919

National Debtline

Free telephone helpline for people with debt problems in England, Scotland and Wales. More information at: Tel 0808 808 4000 or see website.

Consumer Credit Counselling Service

Provides free confidential service to help achieve realistic solutions to debt problems, avoid bankruptcy and learn to handle money. More information at: Tel 0800 138 1111 or see website.

Trading standards

Local trading standards services can take action when traders break consumer law. If you want advice about whether a creditor or debt collector is acting unlawfully e.g. by harassing you, you may wish to contact trading standards. But they may not be able to provide you with debt or money advice. Details of your local trading standards service can be found in your local telephone directory. or see website.

NOTES

Figures

1. Bank of England figures on 'Lending to individuals: September 2003' (statistical release dated 29 October 2003)

2. This is based on the Bank of England figure of £168 billion total consumer credit debt divided by the number of households in the UK – 24.48 million according to the latest (2001) population census.

3. 'Financial Over-Commitment Survey' Research Study conducted by MORI for Citizens' Advice, July 2003.

4. Debt Crisis – an attempt to make ends meet or a frivolous approach to spending?', KPMG news release 27 August 2003.

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