Press Release

COULD YOU BECOME A VICTIM OF 'INVOLUNTARY CREDIT'?

www.equifax.co.uk

London, June 2008 - Leading instant online credit information provider, Equifax, has identified the emergence of a debt phenomenon that last reared its head in the early Nineties. And the company is advising consumers and families to watch out for the warning signs before they find themselves in serious financial difficulty.

The spectre of 'involuntary credit' could well loom large as many individuals and families find themselves under increasing pressure from rising living costs as Equifax External Affairs Director, Neil Munroe, explained:

"'Involuntary credit' is credit taken out because an individual can't meet their existing financial commitments. It could be caused by increases in living expenses, such as a rise in mortgage payments at the end of a fixed rate deal. Or by a sudden change in personal circumstances that hasn't been allowed for in current credit commitments, such as redundancy, illness or separation or divorce.

"When the downturn began, it was clear that the people most at risk would be those on fixed incomes such as pensioners, students, single mothers and benefit claimants, hit by rising utility bills and fuel costs. But now, with the cost of credit rising and fixed rate mortgage deals coming to an end, the people who used to be regarded as the comfortable middle classes run the risk of being pushed over the edge.

"Obviously there is a proportion of the UK population who are already in quite severe debt, as numerous surveys report. But what various economic and financial services experts are also predicting is that there is a reasonable segment of the population who may suddenly find themselves struggling to keep up repayments - yet they would never class themselves as being indebted.

The 'Have It Alls' of the Noughties discover what the Eighties generation already know

"This is the 'have it all' generation of the Noughties who have been used to getting access to credit to improve their lifestyle. They are probably in their mid twenties to mid thirties and have no first hand knowledge of how to manage in a financial downturn. And they are unlike those in their forties and older, many of whom benefited from the economic policies of the early Eighties but then experienced the downturn in the early Nineties."

"Clearly it's hard to change personal financial circumstances in the short term - especially if you have already taken on significant credit repayments, such as a high value mortgage. But what consumers can do to avoid having to turn to 'involuntary credit' is take clear stock of all their financial commitments.

"They can get a copy of their credit report. It's also wise to do a bit of good financial management to make sure they are aware of all their financial outgoings. Then if circumstances do change, they will have a pretty good idea of where they need to do to make savings first.

"A recent survey by Equifax revealed that more than a third of consumers have already fallen behind on credit card payments (37%) with nearly 1 in 4 defaulting on a credit agreement. With 1 in 5 seeing mortgage payments already increased, it is now more important than ever to be on top of all financial commitments and have a clear gameplan should circumstances change."

An Equifax Credit Report can be purchased online instantly for just £11.95 by visiting www.equifax.co.uk.

If you would like more information or would like to arrange an interview please contact Cecile Stearn, Elinor Puzey or Louise Fowler at HSL on 020 8977 9132 or email elinor@harrisonsadler.com