Lobbying for market regulation
The problem of over-indebtedness has arisen as a result
of a combination of economic, commercial and social
factors, which include:
- Historically low interest rates
- Irresponsible lending
- Rising house prices
- A society that increasingly "wants it now"
The number of insolvent consumers is already significant,
and we believe it will continue to rise as the number
of irreversibly over-indebted rises. Furthermore, if
interest rates continue to rise, we believe that we
will see a flood of "economic victims".
Debt
Free Direct has recently submitted a response to the
Government Consumer Credit White Paper which
focuses on a proposal for a new, simpler Consumer IVA
(CIVA).
On a wider stage, we are actively lobbying for
increased regulation in this sector. To solve the problem
of
over-indebtedness we believe that there are two key
focus areas:
1) Stopping any more people becoming irreversibly over-indebted.
This would be achieved through a combination of strategies
that target
- Education
- Responsible lending
- Best advice becoming a requirement of providing
credit (particularly where there is evidence of an
existing debt problem)
- Focus on affordability (with appropriate safety
margins)
2) Rehabilitating those who are already irreversibly over-indebted
at the point they become insolvent. This would be achieved through a
combination of strategies that target
- Awareness that help is available
- Free and easy access to debt advice
- Best advice systematically delivered every time
- Appropriate solutions (e.g. CIVA)
The CIVA would restore an appropriate balance between the consumer
and the creditor, available to all who need it and simple to use in practice.
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