Recently released figures from the BoE have revealed that many UK banking institutions have been facing increasingly expensive losses from their credit card customers, as last quarter’s write-offs rose to £2.1 billion, nearly double last quarter’s figures of £1.3 billion.
Additionally personal and business bank account lenders are on track to exceed the previous year’s write-off record of £4.1 billion, according to a recent report released by the BBC.
In an unrelated event, the largest debt charity in Britain announced the implementation of a new set of advertising codes, which were introduced recently.
The Consumer Credit Counselling Service, funded by the government, commented on the development, saying that the new regulations will increase the difficulty for debt management companies that charge their customers fees to misleadingly advertise their services as with no cost to the consumer.
Up until the new rules were put in place, there have been several debt management companies that have emphasised their help and advice as free of charge, which has led UK credit card holders who have been inundated with very high fees and interest rates through their issuing banks to begin with into further debt.
The newly instituted changes will effectively bar companies from advertising either a service or a product by using such nomenclature as “without charge,” “free of charge,” or related terms, if the customer will be responsible for any mandatory costs such as those related to delivery and response.
Chairman for the CCCS, Malcolm Hurlston, recommended debt charities’ work, commenting that their research showed that clients who availed themselves of debt management plans wherein fees were charged, in contrast with truly no-fee debt management plans, paid an exorbitant cost in both time and additional funds, going as far as to say that customers would “pay through the nose” if availing themselves of a plan that had hidden fees incorporated into its framework.