Loans -
Billions of pounds given out without credit checks - 13/05/2008
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Billions of pounds, worth of loans, have been handed out to borrowers, but without lenders making proper checks, according to a recent report.
It is claimed that many lenders have failed to ask applicants for proof of income before granting the loan, and that around £20 billion worth of loans may have been granted without the necessary checks having been carried out.
Over the past year, it has been estimated that around three million unsecured loans, may have been approved without checks being carried out into the income of the applicant; with over half a million applicants, not even being asked about their income when making their applications.
One industry official stated: “With more than 7,716 loan repayments being missed every day and record write-offs, you might think that lenders would have learnt their lesson, but the potential profits have clearly been too good to resist. While the credit crunch has forced lenders to tighten up their lending criteria, these latest amendments to the Banking Code do not go far enough to help promote responsible lending in all cases.”
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