Billions of pounds worth of loans being handed out without proper checks

According to a recent report billions of pounds worth of loans have been handed out to borrowers by lenders that have failed to carry out adequate checks into the circumstances and financial status of the applicant.

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 is estimated that around three million unsecured loans may have been approved without checks being carried out into the income of the applicant.

In fact, according to the research, well over half a million applicants were not asked about their income at all on their application before the loan was approved.

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.”