Lenders fail to carry out proper checks on many borrowers

According to a recent report many lenders are failing to carry out adequate checks when it comes to proof of income from applicants looking for unsecured finance.

Officials state that lenders are taking huge risks by doling out finance without first doing the property check when it comes to verifying the borrower’s income.

Lenders have expressed a great deal of concern over bad debt levels over recent months, as well as many tightening up in their lending criteria as a result of the global credit crunch.

However, it seems that some lenders are not being as cautious as others, and some officials state that a number of applicants are not even asked for details of their income.

One official stated: ‘We see far too much evidence of people having been lent money where it was clear from the start that they would not be in a position to repay it. We have repeatedly called on lenders to carry out thorough checks and it is imperative that this is done.’

Another expressed surprise that lenders had not learned their lesson given bad debt levels and the current financial climate, adding: ‘With more than 7,716 loan repayments being missed every day and record write-offs, you might think that lenders had learnt their lesson.’