‘Competition helped drive debt’
The competitive nature of the financial services industry is partly responsible for the rise in consumer debt in recent years, according to a market expert.
Nick O'Reilly, the vice president of R3, the Association of Business Recovery Professionals, said consumer spending had helped to bolster the economy in the last four or five years.
Much of that spending has been funded by credit and because of that the level of borrowing has grown massively and some people are now having trouble keeping up with their repayments, he continued.
The level of consumer spending also encouraged lenders to behave in a more competitive manner, he explained, making it easier for borrowers to obtain loans and credit cards.
"It's a much more competitive financial services market these days, and people are tripping over themselves to lend money. That must mean, by its nature, that their credit checks are less rigorous than they used to be," said Mr O'Reilly.
Figures compiled by the money education charity Credit Action show that at the end of July, total UK personal debt stood at £1,355 billion.
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