Lenders urged to tighten checks

Although consumers need to take responsibility for their borrowing, lenders must tighten their credit checking measures, an expert has urged.

Simeon Linstead, head of personal finance at price comparison website uSwitch.com, made his comments following research which showed 84 per cent of people who successfully applied for credit cards over the last 12 months did not have to provide proof of income.

This means 4.8 million people did not have to prove the details they gave in their forms, while 14 per cent of successful applicants claim they were not asked about their income and outgoings at all.

Mr Linstead remarked: “It is too early to say if the amendments to the Banking Code are resolving these problems but there is clearly an urgent need for watertight measures to be put in place to ensure that the banks are lending responsibly.”

At the end of March, various amendments were made to the Banking Code, designed to ensure new commitments to responsible lending are made by credit providers.

Tags: Financial institutions, Banking, amendments, need, credit, outgoings, comparison