Sub-standard affordability checks ‘deeply irresponsible’

The price comparison site has found that 89 per cent of credit card applicants over the past year did not have to prove their income, while 96 per cent of borrowers did not have to provide proof of outgoings.

The firm is challenging the banking code standards board to make affordability checks obligatory for all unsecured lending products. It argued that it is irresponsible of providers to grant credit to those who are likely to be saddled with a lifetime of debt.

Personal finance spokesman Nick White said that the findings unveil “the alarming reality of the inadequate checks and procedures carried out by credit card lenders”.

He added: “It will come as no surprise if in the forthcoming bank reporting season, later in February, the banks announce record levels of write offs in bad debt.”

However, David Dooks, director of statistics at the British Bankers’ Association, said that figures which show credit card lending contracted last year by £1.8 billion suggests that consumer appetite for credit is clearly waning.

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