Warning over consumer debt levels

Friday 24 January 2014

Debt levels in Jersey actually fell last year - but the Citizen’s Advice Bureau is still warning Islanders to be very careful who they borrow from.

Some Islanders are approaching the Bureau after hitting crisis point, with debts reaching tens of thousands of pounds. But the CAB say that anyone can come to them for advice at any point - and the earlier the better. In 2012 the Bureau helped 278 people with an accumulated debt of more than £5 million. Last year the numbers fell to 241 and the overall level of debt went down to £3.7 million, slightly lower than the 2010 total.

However, CAB’s Chief Executive Malcolm Ferey said while he hoped this downward trend would continue, there were still a significant number of people running up debts they cannot afford to repay. He knows of some who owe tens of thousands of pounds.

"We have seen clients with huge amounts of unsecured debts and sometimes the levels are very scary," he said

The easy availability of UK payday loans via the internet has led CAB to run organise advice clinics out of normal hours, supported by staff from local lending firm, Future Finance. They want hear from anyone in debt to payday loan companies.

Mr Ferey said: ‘’We would like to assess the scope and give people the appropriate advice on how to alleviate their current predicament."

UK payday loan companies can lend at very high interest rates, sometimes without credit checks and impose penalty clauses for failure to repay. As they have authority to take money from client’s bank accounts, debts can easily spiral out of the borrowers control.

The clinics are being held CAB at St Paul’s Gate on Saturday and Sunday from 9 am to 12 noon and Monday, Tuesday and Wednesday from 5 pm to 8 pm.