Lenders told to stop "binge lending"
Published On 7 November 2006
A new report has called on banks and lenders to stop "binge lending".A study by price comparison website uSwitch.com has found that seven out of ten successful loan applicants in the past year did not have to undergo proof of income checks, while 1.9 million loans were issued without affordability checks.
The company claims that lenders appear to be a 'binging' on an inexhaustible supply of applicants, hungry for credit, despite the recent introduction of the Banking Code, which attempted to raise the number of credit checks carried out by lenders.
"The changes introduced by the banking watchdog earlier this year have not yet resolved the issues that it set out to address – the banks’ duty to carry out meaningful credit assessments", said Nick White, the director of financial services at uSwitch.com
The past six months have seen UK lending through unsecured loans come to £17.1 billion, of which £11.9 billion was issued without income checks.
