Wednesday, November 29, 2006

Debt starts to bite the lenders

Barclays to write off 1.5bn in credit card debt as bankruptcies hit record level

Barclaycard, Britain’s most popular credit card, signalled yesterday that it expected its army of customers to default on an unprecedented £1.5 billion of debt this year. Its parent company, Barclays, blamed rising numbers of personal insolvencies, particularly individual voluntary arrangements (IVAs), for the blow-out in bad debts. In the second half of this year, the bank has been writing off debts owed by credit card and personal loan customers at the rate of £31 million a week. The problem has been worsening, the write-off rate rising from £19.5 million a week to £22.7 million and then £26.8 million in the previous three six-month periods.

Posted by scumbag @ 01:10 PM (503 views)
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4 thoughts on “Debt starts to bite the lenders

  • In light of recent postings on this site – perhaps credit card companies should behave like insurance companies.

    Publish figures for debt write-offs based on gender – hey blokes may get a better rate – now there’s equality!!!

    Read: Insolvency figures reveal gender gap

    http://www.ft.com/cms/s/18867a10-6a17-11db-952e-0000779e2340.html

    “21% of women in over 10k of unsecured debt now report some likelihood of becoming insolvent (an increase of 6% in 6 months) compared with 15% of men (an increase of just 1% since April 2006)”

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  • thetidewillturn says:

    Dear Mr Barclays

    I am writing in the absence of your normal bank manager Captain Mainwaring who is away on manoeuvres this weekend attacking a cow in a pincer movement with his platoon somewhere near Walmington-On Sea. Understand he has got into a bit of a scrap with Jerry so not expecting him back until Monday.

    I see from the Times that your bad debts are rising. I am a little disappointed that you have not felt fit to discuss this with me or Mainwaring first (that odious little man) before going public. However be that as it may I believe it serves you right…on 3 counts.

    1. Learn to check your customers ability to service their debts – the downside? – it will involve a human employee checking that the figures add up and are realistic/match what is going out of their bank account – customers do tend to bend the truth a little bit on the old application forms so watch out – Do you remember those humans in your employ? – they used to be called staff? Perhaps reducing the number so drastically in the early/mid 90’s was in hindsight a bit hasty.

    2. Don’t lend so much unsecured without tangible realistically valued security (ie not houses unless you heavily write down security values – got a bit of a bad feeling about the way things may go there old boy).

    3. Expect it to get worse as word gets around about the ease with which IVA’s can be had. Because believe me people talk to each other – mainly on this new fangled web thingy (still trying to get my head around it don’t ya know) – just as they are telling each other that your personal bank charges are unenforceable and will be refunded if heavily challenged (see consumeractiongroup.co.uk)

    That said I am glad to see that you are still stating that you expect to make profits….for now…but I seriously doubt your perhaps over optimistic projections and would like you to come in for a bit of a chat! (Small charge will have to be levied for that – sorry old bean).

    Whilst writing and in noting the increased level of bad debts I wonder if you have considered taking out “Personal Credit Card Customer Bad Debt Protector Cover Insurance”. For as little as 5p per second we can arrange to cover your personal credit card customer bad debts in the event they go bad (please note it does not pay out in the event of a houseprice crash, recession or if the day ends in a letter Y.) Haven’t quite hit my target this year and need this to get me my bonus so would be grateful if you would consider. Perhaps we can discuss this when we meet.

    By the way you have been charged £30 for this e mail to cover the cost of my time etc.

    regards old chap and love to the wife and kids etc

    Major General Public
    (Captain Mainwarings boss)

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  • “Barclays blamed rising numbers of personal insolvencies”

    So Banks blame the customers for bailing out, customers blame the banks for lending them the money, parents blame teachers for their kids being unruly and Bush blames Al-Qaeda for just about everything.

    It’s an understatement to say that the phrase “my bad” is a little unfashionable these days isn’t it?!

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  • Dear Major General Public

    Very Clever!

    Yours thankfully

    A.Wanker er…mean Banker

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