Consumer debt strategy attacked

The government has been severely criticised for wasting money in its new proposals to combat high levels of consumer debt.

14:21 26 August 2004

The government has been severely criticised for wasting money in its new proposals to combat high levels of consumer debt.

According to The Credit Services Association (CSA), the body that represents the UK debt industry, the government's idea to put millions of leaflets in job centres, schools, doctors' surgeries and even estate agents is a pointless waste of money.

The CSA believes it fails to grasp the key issues and is little short of a gimmick that will do absolutely nothing to alleviate UK debt.

Speaking out against the Department of Constitutional Affairs (DCA), those responsible for the new initiative, Scott Soutar, president of the CSA said: "The money would be much better channelled to bodies like the Citizens Advice Bureau (CAB) that are already set up to deal with such problems, are proven to be effective, but are consistently under-funded."

The CSA's concern is that the distribution of the leaflets may make the government feel better and look like it is taking action, but is failing to recognise that effective means of providing advice and support already exist.

The recent increases in interest rates and the continuing rise in house prices also worry the CSA. Mr Soutar explains that these factors may, "put some people beyond their means and others closer to a debt crisis".

He concluded: "People need to address the debt they have before they are forced to default on payment. Simply taking on more debt is not the solution and ignoring the problem will not make the problem go away. Reading about it after it has happened is also not likely to help."

The CAB recently reported a 44 per cent rise in calls for advice about debt over the last six years.