Press Release

CONSUMERS TURN TO DOORSTEP LOANS IN WAKE OF CREDIT CRUNCH

Life Policies & Pension Payments Could Suffer Too

Exclusive Equifax survey conducted for ITV News reveals that 1 in 4 consumers are prepared to take drastic action to manage finances

www.equifax.co.uk

An ITV News report, broadcast on 19th June 2008, revealed that the credit crunch is pushing consumers into high interest sub-prime loans. An exclusive survey conducted for ITV News by Equifax, the leading online instant credit information provider, showed a rise in pay day and doorstep loans. In particular, the survey found that borrowers can end up paying the equivalent of 2.6 million APR.

The poll of 1,000 Equifax customers worried about their credit rating revealed some concerning results. A third have taken out doorstep loans (32%) and of great concern is that 31% have taken pay day loans. But what has got debt experts particularly worried is that 32% are considering stopping credit card repayments to pay for essentials like mortgages.

The ITV report showed that consumers feeling the pinch are prepared to jeopardise their future financial stability to stay on top of current commitments. Coming out as the CML reports another drop in new loan figures, the survey reflects the current lack of financial confidence in the UK economy.

Neil Munroe, External Affairs Director for Equifax said, "Whilst the Bank of England has kept interest rates at 5%, many lenders are still being cautious and not passing better rates onto their customers. This appears to be affecting both existing and new borrowers. Combined with rising food and oil prices which are also taking their toll on family finances it's not surprising that our survey shows that consumers are looking at ways to tighten their belts.

"Women seem to be feeling the credit crunch the most. Just 9% of men are seeing a direct impact on their finances, compared to over a quarter of women (26%)."

"Nearly 1 in 4 of respondents to the survey said they would cut back on life insurance if they had to make drastic savings (24%). And almost a third (29%) said they would cut back on their pension payments."

"Interestingly, over half of the people in our survey thought it should be harder to get credit given the current climate, which suggests consumers are well aware of the risk of bad debt."

"We urge people to talk to their lender if they are struggling with repayments in order to avoid trouble further down the line. Being as well informed as possible is also crucial and consumers can apply for a copy of their credit report to gain a clear picture of their financial status and concentrate on paying off their most expensive debts first."

For further press information please contact: Elinor Puzey, Louise Fowler, Cecile Stearn or Wendy Harrison at HSL on 020 8977 9132 / Fax: 020 8977 5200 or Email: elinor@harrisonsadler.com