"Intermediaries are well placed to identify the signs of individuals struggling with money problems and should provide awareness of where they can get free independent debt advice"
PayPlan says consumers who are declined credit due to affordability reasons following the application of a loan or mortgage, should be signposted to independent debt advice to ensure they have the correct means to manage their financial situation.
Recent research by the FCA found that 52% of consumers who has been declined a loan were still in the same financial position 12 months later and only 1 in 5 had sought professional debt counselling services.
Andrew Alder, Head of Partnerships at PayPlan, said: “Intermediaries are well placed to identify the signs of individuals struggling with money problems and should provide awareness of where they can get free independent debt advice when unable to secure the lending needed to consolidate their unsecured debts.
“We regularly see these types of consumers contacting PayPlan months after they have been declined for this type of lending. If the intermediary and debt advice industry had closer links, it could enable the prevention of debt problems before a consumer hits crisis point.
“Lenders are already providing an effective debt management pathway for clients who are struggling financially and it’s important that the intermediary market follows suit in their responsibility.”
