The Borrowers - Britain Deep in Debt

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Brilliant and necessary programme. Too many lenders still operate unaffected by the law or any government department. There is in fact nothing to help the consumer even now. That is despite this Government being elected on a ticket of consumerism and tackling matters such as rip off interest rates. We are appalled that since the Cruickshank report this Government has almost lost it's voice as far as consumers are concerned. More power to your elbow on matters such as this. Too many people are in the dark and still being ripped off and your programmes on these issues are essential.
Eddy Weatherill
Huntingdon

A couple of years ago I was able to help a young friend of mine being chased by various debt collectors and solicitors, and I was able to negotiate repayments in stages. We did have trouble with a couple of creditors. They never answered any of our letters, but continued to send their own standard letters each month adding more interest charges. In the end we just paid the whole amount in one go, but their own sharp practice did delay payment. Had these debts been much larger I would have been unable to help, and the bankruptcy route might have been the right solution. Thanks for highlighting this problem area.
Peter H Allan
Elton, Chester

I think the most frightening thing about the programme was the lack of proper regulation. Having worked in the life assurance industry all my life I cannot understand why similar rules, including projections and cooling off periods do not apply to mortgage lenders. The obvious solution is to bring them all under the Financial Services Authority and this government needs to give this a high priority as it is clear that while a voluntary code may work with prime lenders, it does not work with the sub prime lenders, and proper regulation is the only answer.
David Lechmere
Norwich

Once again an excellent programme. I took a loan out for £20,000, it all went wrong, my house was repossessed & I repaid £22,000. The company is still after me for another £22,000 in lost interest even though they have my cash to lend to someone else!
Roger Barton
Sheffield

We were contacted by the Mortgage Group just before Christmas. Presumably they had got our details from a debt list. The reason for our financial difficulties is my ill health and subsequent loss of salary.

It is disgusting that companies like The Mortgage Group can prey on people when they are at their most desperate

Alison Reader, Huntingdon

They promised they could help us reduce our monthly payments. When the rep arrived he seemed most put out that I knew a fair bit about the cost of re-mortgaging, having been a legal secretary earlier in my career, and most put out that he couldn't pull the wool over my eyes. They have contacted us twice since Christmas and I have finally managed to get them to close the file as I have no intention of taking out a re-mortgage with them. It is disgusting that companies like The Mortgage Group can prey on people when they are at their most desperate, offering to sort out their problems when in fact they are compounding them. I, for one, would be delighted to give details of my experience.
Alison Reader
Huntingdon

As an Ex employee of the Mortgage Group I was absolutely thrilled that you exposed the company for what they truly are. I have read the comments from other employees and cannot believe that they can actually defend the company. It took me two months to realise a few home truths about the Mortgage Group's practices. I was told to say to the people that we called that we had a panel of 32 lenders when in effect we only had one!! When we first started the training we were told categorically that we were not cold calling as all the people we had called had been written to. I really could go on for ever. I must say that I feel extremely guilty for the people that may have remortgaged with the Mortgage Group as a result of one of my Cold Calls.
Katie Walsh
Perranporth

I was very interested in your programme on debt as I work in a generalist advice agency where a large, and increasing, number of enquiries and on-going cases are concerned with debt. While I agreed with the advice worker you featured that many clients are unable to obtain affordable credit, many of our clients have reasonable incomes and, I feel, have been encouraged by creditors to take out credit without first checking their existing position with the result that they are totally over-committed and very often have several debts to the same, usually High Street, creditor. I had hoped you would also investigate the growing number of companies who help clients to renegotiate their debt payments but who charge large fees for the privilege. These companies also advertise widely in the tabloid press.
Trish Thomas
Dunfermline

I thought The Borrowers said some good stuff. I live on a council estate in Sheffield, different from the ones featured but exposed to the same dubious offers. Personally I always say no but I know how tempting some of the offers can be. In the summer I can spend many an hour catching the last of the evening sun whilst watching a seemingly endless procession of debt collectors and tally-men make its way from one door to another. I thought that they might ease off for a while following your prog, but lo and behold the very next day a new team were around offering towels, bedding, videos, toasters etc. The single mum next door got £100 worth of goods to be paid back at £5 per week over twenty something weeks, with the promise of a cash loan if she is a good payer. The stuff ain't even that good. The people making the offer were new around here and working from a tatty van. Maybe they got the idea from watching The Borrowers.
Dan Ryan
Sheffield

I was horrified to learn how poorly the activities of such companies as The Mortgage Group is policed by the OFT and the DTI.

I feel that banks are also irresponsible regarding their lending and the customer's ability to pay

Joy Hall, Nottingham

If, as the programme indicated the director of this firm has been involved with the running of several companies whose licences have been revoked, is it not time that he was barred from being a director altogether?
Rupert Edwards
Colchester

This was a very informative programme. However, I feel that banks are also irresponsible regarding their lending and the customer's ability to pay. My severely disabled daughter was granted loans by a high street bank far beyond her ability to repay. Her total debt is now more than £20,000 and her repayments set by the bank amounted to more than 66% of her income before any other monthly commitments. I have been trying to negotiate for the last 12 months regarding irresponsible overlending. They refuse to accept any responsibility and continue to add more and more interest.
Joy Hall
Nottingham

I'm 23, have my own £50,000 Mortgage, £10,700 graduate loan, £4,900 student loans, £1100 overdrawn on visa and credit cards and have £600 on HP. It is going to take me 5 yrs to pay all this off. I spent it so I owe it back, if you're going to borrow money what do you expect? I don't drink, smoke, have holidays or even go out a lot I just take every day as it comes. There's more to life than worrying about money.
James Gay
Bridgend

A good programme outlining the problem. I was amazed that nothing was said about the role of Credit Unions in helping people with financial difficulties. Credit Unions are owned and run by members, we are regulated by the FSA and charge a maximum of 1% interest. We had a person come in the other week who had borrowed £500 for Christmas. This will cost her £1000. From a Credit Union she would pay £45 a month or £10 a week over a year and pay just £30 in interest. Credit Unions have been slow to take off in this country but this is changing. Two credit unions started in Manchester in October (ours and one in North Manchester) - we have a total of 500 members already and we are providing loans to people who would otherwise have to pay crippling interest rates from loan sharks like the people shown in the programme. Join your local credit union today.
Paul Murphy, Chair South Manchester Credit Union
Manchester

The fact is that too much of the UK population suffers through the generous licence given to many (profiteering by nature) creditors

Russell Cavanagh, Sheffield

As the debt adviser featured in the programme, I agree with all that NACAB SSU says - especially about the pitfalls of bankruptcy in the private rented sector. However, it is on film that I said bankruptcy is not an easy choice although it is an increasingly appropriate option for many people. The fact is that too much of the UK population suffers through the generous licence given to many (profiteering by nature) creditors whilst the rights of the individual - either through lack of legal redress against bad creditors or because of a now inappropriate social fund regime - are treated as 3rd class subjects. Witness the French attitude to Crazy George in terms of not letting creditors kick people while they are down to see how life might be. I was not alone in being wary of the way the debt issues might have been treated by a television programme. But in the end the production team produced an objective, balanced edition that let every party have its say - especially those at the truly sharp end.
Russell Cavanagh
Sheffield

Some years ago I worked for short time as a debt advisor in the East Midlands. Even then I was astounded by the lack of financial literacy amongst most of my clients. Surely there should be more emphasis on education and individual responsibility rather than merely blaming the supply side. Door to door lenders are not the only source of credit - the number of credit unions have grown considerably in the last few years and crucially they demand that clients save regularly before they can borrow.
J Adderley
Birmingham

As a Trading Standards enforcement officer it was no surprise to me that reforms to the Consumer Credit Act were left out of the Queen's speech. All politicians make noises about improving consumer law but shy away when it comes to it because they are under pressure from business to reduce legislation, not add to it. Also most trading standards offices are chronically short of staff and have too many laws to enforce. Councils have bigger priorities and so money does not get allocated to the service. My office has six active enforcement staff and over 80 Acts of parliament to enforce. We have inspection targets to meet, complaints by the bucket load, legal loopholes to navigate and no new trainees. New laws won't help unless there are the proper resources in place to make sure they are enforced. I only see more rogue businesses taking advantage until someone addresses the real issues.
Dave Quinton
Romford, Essex

Action needs to be undertaken to increase the sanctions available against unlicensed lenders

S. Matthews

I was very impressed with the coverage your programme gave to ordinary people suffering extraordinary circumstances that produced their suffering. It is clear that reform needs to happen as a matter of urgency. This should include looking at the interest rates that are charged to people on low incomes. A programme for improved regulation of the credit industry must also address problems in the way that loans are made and new customers are contacted. In addition to addressing problems with licensed lenders, action needs to be undertaken to increase the sanctions available against unlicensed lenders. Work needs to be done in not addressing the issues of such lenders in isolation but in a programme tackling: The Social Fund, Extortionate Lending, Community Reinvestment, Debt Recovery, and Credit Unions. A programme that tackles debt and financial exclusion. A programme that unites the efforts of politicians and those that experience debt and can present economic citizenship.
S. Matthews
Church Action on Poverty

I thought the practices used by the Mortgage Group were quite despicable, especially when the staff were opening the champagne when they had just secured a sale. Is anything going to be done to stop them trading as they are breaking so many of the financial codes of practice?
Karen
Hertfordshire

The Financial Services Act 2000 (FSA) will introduce mortgage regulation. The extent of this regulation is currently under debate and within the next few weeks the Treasury will publish the final form regulations. This could have been an opportunity to regulate all secured loans. Unfortunately, it appears that the Treasury will limit its regulation to first mortgages (although it is unclear how this is to be defined and the Treasury's first attempts to define a first mortgage did not work). This will not catch the worst sub-prime offenders who tend to have second or subsequent charges over property. Given the fact that the lending market is to have a radical shake up in the next year it would be unwise for the government to consider amendments to the Consumer Credit Act 1974 (CCA) until mortgage regulation has had a chance to bed in. The Treasury must reconsider and regulate all mortgages in the same way.
Nick
Leeds

I've been in the same situation as many people on tonight's show so were a lot of my family until I could not take any more. In the end I wrote to the lender and told them I could not afford the payments they required and offered them £5.00 per month and they had no choice but to accept it.

Money is so easy to get hold of but very very hard to pay back

Malcolm Bain, Stockton

I then wrote for all my family the same letter and they still offered us loans which I refused. I did this letter to them in the hope they would never offer us a loan again but they did and I refused and never got into them again. I stayed credit free until last year when my t.v, cooker, fridge, freezer all went at the same time. I now owe £1,200 on my credit card and I feel I'm falling into the same trap. Money is so easy to get hold of but very very hard to pay back. Your programme tonight really touched me, it was great and true.
Malcolm Bain
Stockton

I would just like to say, as an employee of the Mortgage Group, that I thought the programme was misleading and that certain comments were taken out of context.
Elaine
St Ives

Ref: NACAB SSU comments I agree 100%, Bankruptcy IS NOT an easy option. It appears that the CAB (see debthelpuk.co.uk - FREE advice on-line) use the "bankruptcy option" far to much and in a most off hand manner!
Dole Walla
Stockton-on-Tees

As an experienced money advice specialist I was obviously pleased to see this subject get an airing, but was also concerned that bankruptcy was presented as an easy option to get people out of difficulties. It often is the best option, but it was particularly worrying that the couple who had gone bankrupt stated that as they were in rented property, their arrears would be included in the bankruptcy and they would be safe from eviction. Whilst it is true that any arrears will be included in the bankruptcy, if their landlord is private (rather than local authority) bankruptcy is in fact likely to trigger eviction. Most private tenancies include a bankruptcy termination clause, whereby, in the event of bankruptcy, with or without arrears, the landlord has the right to terminate the tenancy. A landlord also has the right, unlike all other creditors, to distrain for goods (ie send in the bailiff) for rent which should have been paid up to 6 months before the bankruptcy took place. Also, and importantly, bankruptcy is no help to debtors in trouble with their mortgages. That is a whole different can of worms and I am only sorry that Panorama decided to combine so many different problems into just one programme.
NACAB SSU

Up until November 2000 I used to work for The Mortgage Group in their H/O and I think that your programme should point out that you are biased, picking out things to make the company look bad. I worked for Tony for 2 years and not once did I or any of my colleagues lie to or deceive clients. If clients had clean credit we would not do anything for them apart from advise that they go to their own bank first. I am more than upset with the way you portrayed the company, when at the end of the day we were helping people, not to mention that Tony has given people in Cornwall the opportunity to earn a decent wage for the area.
Gary John
London

I was appalled by the Mortgage Group last night - Companies like that should not be allowed to trade

Ana-Maria Venables-Jones, Cannock

I work for a reputable Broker. We help and assist people with purchasing a property, re-mortgaging an existing property and debt consolidation. We pride ourselves on helping anyone who needs help. We aim to make life easier and save money for people who are in debt. I was appalled by the Mortgage Group and even Igroup for not questioning why this Company submitted so many cases. And 1.7% commission from Igroup as a lender is HIGH. We generally only receive 0.35% and our fees are not more than 1.5% unless in extreme cases where we contact clients creditors in an attempt to reduce the balance due to them. We pride ourselves on our service and methods and I was appalled by the Mortgage Group last night - Companies like that should not be allowed to trade.
Ana-Maria Venables-Jones
Cannock

I feel the programme was fair enough as far as it went but perhaps some significant points were missed. Firstly , it is fair to say that the Social Fund or schemes such as Credit Unions could help by undercutting the rates charged in the commercial sector. However, if somebody is in debt they will not be made wealthier by borrowing elsewhere. The example was given in the programme of a broken down washing machine which of course is fair enough and a worthy example. But is this really typical of the sort of thing that people spend money upon? Anybody with direct experience will tell you that it is not. There was too little emphasis in the programme upon peoples' lack of personal responsibility. I am quite sure that there are lenders who abuse the existing rules and that these can be tightened up. But it is naive to expect a commercial organisation to offer loans of this sort at what most people would regard as reasonable rates. The risk upon such debtors has to be factored in : the programme demonstrated the likelihood of a default occurring and in particular of a bankruptcy situation arising where a complete loss results. (I do not criticise the advice given to the couple who did declare themselves bankrupt - this was spot on in my view and the relief to them was obvious).
Keith Gaston
Ipswich

I was particularly impressed that coverage of issues such as extortionate door-to-door lending featured. There was mention of the need for legislation - it would be interesting to know what legislation was being thought of. There is a campaign that aims to provide legislation against the practice of extortionate lenders - www.debt-on-our-doorstep.com. I would strongly encourage anyone interested in eliminating extortionate lending, improving the social fund and fighting the burden of debt to join the campaign.
Stephen Matthews
London

I watched with increasing disbelief yesterday's programme. In my opinion you gave unfortunately a very one-sided impression of the whole picture.

The moral of your story: Borrow as much money as you want, declare yourself bankrupt and start again

Ariane Maier, Welwyn Garden City

Or should we all believe that people still do not know about the risks of borrowing money from "sub-prime" lenders? If yes, you might want to address schools all over the country to improve on basic mathematics and percentage calculations. I do believe that there are people who come into this regrettable position without their own fault, by illness, etc. and they should get all the help of the state that is required. However the examples you showed in the end of the programme left me wondering. Let me just say that I have a decent salary, but can and do not just buy or pick whatever I want. The moral of your story: Borrow as much money as you want, declare yourself bankrupt and start again! No penalty or punishment? What would happen if we all start living a life like this?
Ariane Maier
Welwyn Garden City

We had some involvement in the production of the programme so looked forward to its broadcast with great interest. We've just had a quick Monday morning dissection and we are agreed that the programme was excellent - there is often a tendency to try to sensationalise these issues by picking on one or two extreme examples. We thought the programme gave an excellent overview of the reality of living with debt for many thousands of people. It also gave good explanations as to how low income consumers can so easily find themselves in the predicaments you described. I think the programme illustrated very well how difficult it is to impose lending controls - if a profit can be made from a credit bargain there will always be someone prepared to lend. The focus needs to shift to the protection offered to consumers when they find themselves unable to pay. Perhaps if it was not so easy for unscrupulous lenders to get their money back we start to see more responsible lending decisions.
Steve Wilcox
Sheffield

I used to work for a lending company. The regime there was one of getting people to take on debt as quickly as possible or trying to relend to them. I remember having a lady on the phone who begged me not to offer her son more money as she kept having to bail him out and was virtually bankrupt herself. I mentioned in the call records that no more calls were required to the number and received a rather poorly cobbled together explanation of the good the bank was doing. This type of lending is simply immoral - sales people are trained to counter objections and have literally screen fulls of counter arguments to common objections. Heavier regulation of this industry can only protect the vulnerable.
Padraig Hallows
Anglesey