The knock that costs you thousands - the real threat of doorstep lenders exposed
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Doorstep lenders are putting people at risk of serious debt problems. The warning is contained in a damning new report from Citizens Advice.
The charity has called for a crackdown on dodgy doorstep tactics, such as intimidating struggling borrowers.
More than 1.3 million people in the UK use doorstep loans, with the average loan size £500. But how some of them go about it has come in for serious criticism.
Citizens Advice says one man was visited by a lender on the day his son had died and refused to leave until a family member went to an ATM to withdraw cash.
In another case highlighted by the charity an elderly blind woman was harassed by an unscrupulous debt collector while she was hospitalised after a stroke.
Illegal as well as wrong
Such intimidating behaviour breached the City Watchsdog’s debt collection rules.
The doorstep firms are also accused of irresponsible lending and turning up at people’s homes unannounced to try and flog them high-coast credit.
They have also been putting pressure on people to take out new loans to cover existing debts, putting them into a disastrous cycle of debt.
The charity said one woman who had a legally binding debt plan to repay nearly £20,000 was given three doorstep loans by three separate lenders, despite them knowing her situation.
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Families put at risk
Citizens Advice chief Gillian Guy, said: “Some doorstep lenders are putting people at risk of escalating debts with their irresponsible actions.”
She said the personal nature of doorstep loan selling and debt collection can put customers in a vulnerable position.
“Our evidence shows some lenders are taking advantage of that relationship and causing serious harm to borrowers,” Guy added.
The charity wants the Financial Conduct Authority to extend its cap on payday loan interest rates and fees to doorstep loans. It also wants the regulator to strengthen rules to ensure responsible lending across the market.