The Financial Conduct Authority and Her Majesty’s Treasury are being urged to ban unsolicited telemarketing calls promoting high-risk financial products, following research which shows nearly 6 million consumers get called every single day about payday loans and fee-charging debt management services.
Debt charity StepChange claims that more than half of all adults in Britain (29.5 million people) have received such calls in the past year, which have resulted in 1.5 million people taking out a product.
StepChange’s research also suggests that the problem is particularly acute for financially vulnerable people who are already struggling with debt. A separate survey of the charity’s clients found that a third are receiving more than five calls a week and the charity estimates that up to 12,000 of the clients it advised in 2015 had taken out such services, adding an average of £1,052 in high cost credit to their existing debts.
In a nationally representative poll of adults in Britain, StepChange Debt Charity asked 2,044 people if they had received a telephone call offering them high cost credit, such as a payday loan, or the services of a fee-charging debt management company in the last 12 months. The results show:
– 59% had received at least one call (29.5 million people)
– 8% received a call more than once a day (4 million people)
– 4% received one a day (2 million people)
– 16% said they received them more than once a week (8 million people)
– 6% received one every week (3 million people)
The FCA is currently carrying out a review of cold marketing calls across consumer credit and StepChange Debt Charity is calling on the regulator to ban the unsolicited real-time promotion of high cost credit.
The charity is also calling on the Treasury to give additional powers to the FCA so that it can ban lead-generators from carrying out the unsolicited promotion of fee-charging debt management services.
The unsolicited promotion of any kind of financial product is not a good way for it to be sold, particularly when that product is high cost credit or a fee-charging debt management service, StepChange insists. These products are often targeted at people who are financially vulnerable and may feel they have little choice, but they can make someone’s situation much, much worse.
Credit is something that needs to be bought, not sold, and people need time to decide whether they need it, whether they can afford it and to spend time looking around for the best deal, the charity said.
StepChange Debt Charity chief executive Mike O’Connor explained: “Unsolicited phone calls promoting high-risk financial products cause serious harm. Most people receive them and one in eight of us are bombarded with calls.
“A full and complete ban on all unsolicited real-time promotion of high-risk financial products would not only protect those already in financial difficulty, it would also prevent further damage to the millions of people whose phones keep ringing and ringing.”
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