Seven in 10 keep banks in the dark over financial problems
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Seven in 10 people who have suffered financial pressures in the past two years have never spoken to their bank or building society about their difficulties, Callcredit Information Group data shows.
And 38% of adults do nothing to adjust their changed circumstances when they first come under financial pressure.
The 31% who do eventually speak to their bank or building society take on average two months to do so.
And of those who experienced unexpected financial problems 42% did not come clean about their financial situation.
Nearly two-thirds of British adults have experienced some form of sudden change in their finances during the past two years.
Those with children were even more likely to experience a shift in circumstance, with 74% of parents reporting they have.
Only 8% contacted Citizens Advice or a debt charity when they first received the bad news, leaving the majority of lenders ignorant of their possible debt stress and unable to offer support.
Of those that did contact their bank or building society in the long term, 8% admitted they were not completely honest with them about their financial situation.
The results highlight that 24% of people who said they had suffered an unexpected financial shock over the past two years had seen their income suffer – with 6% taking a pay cut, 9% seeing a cut in working hours and 9% losing their job.
Graham Lund, managing director of Callcredit, says: “These figures are extremely worrying. What’s particularly concerning is the number of people who fail to make their bank aware of sudden changes in their financial situation - and those that do get in touch aren’t always completely honest.
“It’s therefore important that financial service providers use information and tools available to proactively monitor any changes in their consumers’ financial situation and have sight of the bigger picture.”
Readers' comments (3)
Nikki Turner | 1 Sep 2010 11:31 am
Very possibly banks are kept in the dark because consumers are fully aware that many banks will just add to their reduction in income by calling in any loans or mortgages as soon as they get any sniff of financial hardship.
And by the way, are the banks themselves not the worst culprits for keeping people in the dark about financial circumstances? We all know now that HBOS was insolvent and had to have a £25.4 secret cash injection from the tax payer - now that is extremely worrying!
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Anonymous | 1 Sep 2010 1:17 pm
Nikki's, response is far more insightful than the article itself - the first thing every bank does once it starts to rain is to take away the umbrella and consumers know that - as for bank's keeping their own solvency issues quiet - where was the FSA?
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Anonymous | 2 Sep 2010 10:17 am
I've seen no evidence of what Nikki refers to, about banks calling in loans. But what I suspect is happening, is that as soon as a consumer contacts their bank, their details are held on a database which is then sold onto to companies like callcredit. So you can well understand that Graham Lund is worried consumers aren't calling their banks.
The bigger picture is the regard many consumers hold their bank in. The years of banks 'being there' for consumers are long gone. Everybody knows that as soon as you contact your bank about anything, they'll be trying to sell you a policy.
Let's assume I contact my bank as soon as their is a change in my finances. That call will be logged. Then I phone up a month later and tell them that all is now ok, are the bank really going to wipe the whole thing from my file? Of course not, this will be held indefinitely and then whenever I am looking for further credit, this will be taken into account.
I don't think I want to be playing that game, thank you
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