Being trapped with little hope of release as interest payments mount up is an experience that can lead to both financial and physical ill-health.  This is an issue I feel strongly about so I was pleased to see that the Government has recently set out new proposals to help people facing difficulties with their finances.

Creditors can often be extremely ruthless and I have been working closely with Citizens Advice Scotland to make sure that there is easily accessible advice and better protection for people struggling to manage debts.

The Government’s proposals include

• preventing banks from raising interest rates on existing debts or raising customers’ credit card limits without their consent
• banning credit-card chequebooks, which allow cardholders to make cheque payments by borrowing more on their cards.
• requiring creditors to put repayments towards paying off the most expensive debt — rather than the cheapest as most now do.

The Government has announced that the banks will have to fund a free money advice service which will offer impartial advice on subjects such as mortgages or pensions. In the future, personal finance will also be a more important part of the school curriculum so that young people are better able to resist loans or other ‘financial products’ that are not in their best interests.  

I have been campaigning very actively to strengthen consumer rights as well. In May, I led a debate on consumer issues at Westminster which looked at

• the problems that new homebuyers face in obtaining redress
• scam websites which prey on vulnerable people in debt by pretending to be Government sites whilst charging fees
• disputes with travel companies when something goes wrong with a holiday.

I called for a new Consumer Advocate along the lines now proposed by the Government. The right legislation is already in place in some areas but consumers may not have the knowledge or the resources to take on companies on their own.

A common theme seems to be mis–selling or misrepresentation. People find that they are not dealing with the company that they thought they were and the parent company is able to walk away from any liabilities. We expect people in debt to live up to their responsibilities and pay what they owe at the risk of being declared bankrupt. We need to ensure that companies do the same and are not allowed to evade their responsibilities to their customers.