18 June 2008
Service providers and consumers could be in trouble as unchecked borrowing on credit cards continues, it has been claimed.
According to uSwitch.com, 84% of those who applied for credit cards in 2007 successfully were not asked to give evidence of how much they earn.
In total, £17 million has been given out to people who have not supplied proof of income, the firm noted.
Head of Personal Finance at uSwitch.com Simeon Linstead said that in some instances people are not truthful about their money and companies have to look more in depth at this.
"The credit squeeze will back some consumers into a corner and, in sheer desperation, people will resort to lying about their salaries as this is such an easy loophole to exploit," he commented.
While consumers have to be responsible, this is a moral that must be shared by banks themselves, Mr Linstead remarked.
In the Midlands, if people lose their jobs their debt will catch up to them, Andeep Mangal, President of the Birmingham and West Midlands Society of Chartered Accountants observed.