Credit Card Firms Criticised by Debt Consultancy

Many UK credit card providers are not performing sufficient checks on customer risk, it has been alleged.

Debt consultants Thomas Charles said that many lenders could do more to ascertain whether or not a potential cardholder was likely to be able to pay back what they spend. These apparent lapses on the part of card firms could also be boosting overall levels of UK personal debt.

According to Thomas Charles' managing director James Falla, many providers are not requiring borrowers to submit proof of income - a crucial way of determining customer risk.

Mr Falla added: "On the credit card application you are asked which income band you fall into, but very rarely are you actually asked to prove that. The credit card lenders should be looking at improving those standards and tightening up on their credit criteria, and perhaps doing a bit more to actually look at what somebody has coming in.

"Part of the reason why people get into personal debt problems is because they are allowed to take credit, and it’s not easy at the moment to know whether or not they can afford to pay that back."

According to figures from charity Credit Action, Britain's collective personal debt stands at around £1.4 trillion.