“It’s my debt – I took it out and I need to repay it” said Karen following an enquiry seeking help in repaying her debt in an affordable way. “Those lenders are thoroughly irresponsible – they should never have offered me the loan in the first place. They should have known I couldn’t afford it” reported Emma also seeking help with the repayment of a debt.


The Guardian newspaper (28 Feb 2017) reports that complaints to the Financial Ombudsman are on the rise – 22% to be exact based on the last 6 months of 2016. They cite the majority of complaints about loans relate to the failure of short term loan companies to undertake proper affordability checks. This affordability check is a central plank of the Financial Conduct Authority’s (FCA) strategy as it regulates the industry.


Attributing blame is exceptionally tricky. Undoubtedly Karen has a point.  Regardless of the marketing ploys, the lack of a rigorous affordability check, the terms and conditions that could have been clearer - no-one can force an individual to take out credit of any sort. Most borrowers are personally responsible and are usually willing to admit it.


However that doesn’t mean that lenders are absolved from responsibility. Despite the FCA stance, complaints are on the increase. Irresponsible lending remains part of the industry. Emma (above) has 2 young children to feed and with the cupboards bare – was easy prey for the lenders.  Desperation makes a person do what they may not have done under other circumstances. And there are the vulnerable. Depression and bereavement are just 2 examples of a vulnerability that can on occasions lead to over-spending and debt.


Every week thousands of contracts are signed between borrower and lender – usually in very good faith. Changes of financial circumstances could of course mean that no one is to blame for a bad debt. Maybe blame is the wrong word to use full stop. But there are responsibilities on both sides. For the lender – to run the affordability checks and appropriate marketing (to say nothing of reasonable interest rates). And the borrower needs to accept that we are responsible for our actions. We took it out and we have a legal and moral duty to pay it back.



Keith White


(Karen and Emma are fictitious names to protect their anonymity).