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Some debtors are more equal than others 22 November 2013

Despite an industry-wide focus on fair customer treatment, new figures from the Debt Resolution Forum (DRF), a specialised body for debt advisors, suggest some concerning discrepancies.

On behalf of the DRF, a report from research co-operative Zero-credit that surveyed 600 debtors across age, gender and ethnicity groups, shows that women, ethnic minorities and those with long-term illness fare comparatively poorly with creditors.

According to the report, women are more likely than men to face increased charges (64%) and receive calls or visits from creditors at unreasonable times (60.7%).

It also shows that debtors belonging to ethnic minorities are twice as likely as white UK debtors to face legal action, even after entering a debt-solution scheme.

The report highlighted in particular differences in treatment based on debtor age, with people in the 18-24 age bracket ranked highest on levels of increased interest, penalties and charges.

While the numbers dropped for all age groups after entering a debt-solution scheme, the youngest age group experienced the smallest decrease to 50% while the other groups dropped to an average of 13.5%.

The rate of calls or visits from creditors at unreasonable times followed suit, as those aged 18-24 remained at 83.3% even after entering a solution, while the remaining age groups experienced an average 73.9% decrease between them.

This pattern carried over to the level of notices of legal action.

The 40-59 group ranked highest in number of notices of legal action prior to entering a solution with 57.1%, followed by 18-24 and 25-39 with 50% each, trailed by the 60-and-overs with 44.8%.

While the other age groups reported drops after entering a solution, 25-39 (17.4%), 40-59 (17.8%), and over 60 (11.5%), the youngest age group experienced a rise to 66.7%.

Nevertheless, the research demonstrated high levels of satisfaction with the paid-for debt advice sector.

With the belief that debt advisors “had my best interest at heart,” the majority of responders scored their debt advisors nine out of ten.

Some 80% claimed to have improved management of their money after signing up to a debt solution.

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