A CONTINUED rise in personal insolvencies has led to calls for more stringent regulation of consumer debt.
New figures from the Office for National Statistics (ONS) have revealed that in the first quarter of 2019, the number of personal insolvencies had grown by 16 per cent year-on-year, while Individual Voluntary Arrangements (IVAs) rose by 24 per cent over the same period.
Furthermore, in the first quarter of the year, personal insolvencies exceeded 30,000 for the first time since 2011, and recorded the highest first-quarter total since 2010.
Credit card debt and consumer credit have been blamed for the rise in personal insolvencies, although economic stagnation and the problematic roll-out of Universal Credit have also been named as driving factors.
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Richard Haymes, financial difficulties expert at Equifax, said that the statistics highlighted the need for “intensified regulatory oversight”.
“Regulatory intervention has worked in the debt management space,” added Haymes. “The second Financial Conduct Authority thematic review of the debt management market released in March showed significant improvements in managing customer outcomes. With volumes of personal insolvencies and IVAs historically high and more firms beginning to crowd the sector, regulators need to remain focused on adapting to a fast-changing market.
“Debt is a wider issue that goes beyond regulatory bodies, charities and government, and every facet of society must also burden some responsibility. We urge individuals struggling with debt repayments to talk to their creditors as soon as possible, and compel creditors of all types to use data-driven methods to identify customers at risk of financial difficulties and support them in accessing high quality advice.”