UK Money News
2nd July 2008
Credit card companies 'increasing pressure on debtors'
Credit card companies are putting "increased pressure" on borrowers by applying to take charges over applicants' properties, it has been claimed.
James Falla, managing director of Thomas Charles, said that the onset of the credit crunch has seen more and more companies applying to secure credit against homes.
This is likely to add to the number of Britons struggling to avoid repossession, he added.
Mr Falla explained: "More recently what credit card companies have been doing is applying to take charges over property.
"A credit card in general is unsecured debt - if you don't pay it, it's not secured against anything. But what any credit company can do is, if you do own a property and you’re not repaying the debt that you owe in the proper manner, they can apply to secure it against your home."
The trend marks a significant shift from credit card companies' previously lax approach to loan security, with a poll conducted by uSwitch.com finding that 84 per cent of successful credit card applicants were not asked to provide any proof of income to support the figures stated in their application form last year.
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