by Mike Bevel, CollectionIndustry.com


Amid rising complaints of the damage bad debt is having on the United Kingdom, a government minister has taken the bold step of blaming the lenders themselves ? who are among the most vocal of complainers ? for the rising levels of bad debt.



Trade and industry minister, Jim Fitzpatrick, said the increase in the number of personal insolvencies needs to be monitored, but he dismissed requests by the big banks to introduce rules for companies that offer individual voluntary arrangements (IVAs).



Mr. Fitzpatrick told the Financial Times: “If we’ve got a rise in indebtedness, if we’ve got a rise in people having difficulty servicing that debt … then maybe the banks are lending too much money, or maybe they’re not being as careful as they used to be in scrutinizing the applications.”



He added: “If they’d not lent it [the money] in the first place then they wouldn’t be in the difficulty of trying to recover it.”



The collective debt of British borrowers broke through the £1 trillion mark (US$1.2 trillion) in 2004 and has remained above that level ever since, despite a slowdown in borrowing on credit cards and loans.


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