en-us http://backend.userland.com/rss Your Friends @ Myvesta.org.uk (stever@myvesta.org) myvestaukblog_archive.html stever@myvesta.org 114374995965159838 HBOS, HSBC, Lloyds TSB and the Royal Bank of Scotland have teamed up with credit reference service Callcredit to launch the initiative to tackle over-indebtedness.

The lenders will share their customers' income data with the banks, along with current account information. The move will allow banks to form better decisions about whether an individual will be able to repay a loan or credit card.

The credit reference agency will provide the participants with details of customers who are severely overindebted and in need of debt advice. It will also provide daily alerts of customers whose changing levels of indebtedness may be a cause for concern.

Previously, lenders have focussed on how well a consumer has managed debt repayments and how much credit they can have on existing deals.

Callcredit managing director John Andrew said: 'The Government wants more consumer protection for borrowers and the lenders want to provide a better service to their customers.

'It is true that only a small percentage of customers are overindebted and our initiative provides additional opportunities to offer these customers appropriate advice and support.'

The scheme has been in planning for two years and it is expected more banks will join it as it progresses.

Lenders have taken steps to tighten up on who they lend to in recent months after several suffered a rising level of customers with bad debts.

Barclaycard recently said it has upped the proportion of applicants it rejects. It was part of a scheme, along with Egg, Abbey and the Co-Operative Bank, launched last year to expand the level of customer information they supply to the main credit reference agencies.

Banks share negative data, which shows if a customer has missed payments. However, it is difficult to judge how indebted a customer is on that information alone.

UK consumers currently owe £1.2 trillion, including mortgages, and bankruptcy figures show the number of individuals experiencing money difficulties is soaring.

http://www.myvesta.org.uk

Michael Clarke, This is Money
30 March 2006