More than 30,000 home owners across the country will soon be told by banks to spend less on luxury expenses such as drinking, cable television, and mobile phones or risk losing their home when interest rates rise.
Secret Credit Checks
Tuesday saw the admittance from two taxpayer-owned banks that they were in the undergoing “secret credit checks” to identify which of their customers were at a high risk for debt repayment.
Experts say that it is normal practice for banks to issue credit checks on customers, but targeting such a large volume of families after they had already been approved is unprecedented.
The warnings will come from state-owned banks that are in need of recovering the 48 billion pounds of Government money used to nationalize Northern Rock and Bradford & Bingley mortgage lenders during the credit crunch.
A ‘Friendly’ Ring
UK Asset Resolution will be ringing these 30,000 high-risk borrowers at around 2,000 customers per week over the coming months.
The phone call will include advice on how to manage their finances should interest rates rise from the historic low of 0.5%.
Richard Banks, the UKAR chief executive, states of this threatening initiatve, “They need to think about what is their most important debt. It is not their credit card or renewing their Sky subscription, or going out for the latest mobile technology.
“We want customers to look at their finances and change their behaviour.”