Lenders ‘risk billions’

Lenders in the UK are risking billions of pounds by not insisting on seeing proof of income from their customers, according to recent research.

Price comparison firm uSwitch.com has found that almost 85 per cent of all credit applicants did not have to prove their income level over the past 12 months.

In addition, around five per cent of the people quizzed as part of the study admitted that they lie on their credit application in order to access the loan money they are after.

According to uSwitch.com, the lack of effort to find out how much their customers earn could potentially leave lenders severely out of pocket.

“The fact remains that just because a consumer appears to have a ‘suitable’ credit score, it doesn’t mean they are always honest about their income and actually have the cash available each month to pay the bill,” said Simeon Linstead, head of personal finance at uSwitch.com.

Last week, Jamie Elliot from the financial inclusion network Transact, urged people with debt management difficulties not to ignore their problems and seek advice from appropriate sources.

By Dan Mather