GALLOPING DEBT

We are told that the present economic crisis results in many parents being unable to cover their expenses by the end of the week. This has led to a considerable increase in the number of applications for short-term loans. These are all too easily the first step to financial ruin, but many who take this path often seem to have little sense of what they are becoming involved in. It is very easy for those who are not in this fix to cry 'Don't do it!', but the pressures on young people with growing families must be enormous.

Many companies set up to supply this demand profess to have genuine concerns for the welfare of their debtors. This may be so in part, but the existence of advertisements such as the one above lead one to doubt it. In any case, if they cannot charge extravagant rates for unsecured loans they will hardly stay in business long.

The borrowers also seem to have strange ideas of what is essential to their way of life; many would include television, electronic games, cigarettes, a pint in a pub, a car, plastic toys.... All these may seem to them highly desirable; but perfectly happy lives have been, and will continue to be, led by many of us who have done without them.

There is clearly an urgent need for advice about how to cope with all this. Some help is available, but it's not at all easy to find it. Meanwhile, the government does nothing to stem the frighteningly rapid growth of mountains of debt by those least able to handle it. Much more, widely publicised, counselling must be available quickly.

In the mean time, could not some statutory requirements be introduced to bring home to the financially inexperienced exactly what they are taking on? For example, all forms of application for short-term loan should carry, in a font at least one size larger than the rest, the message THINK! IF YOU CANNOT FIND THIS MONEY NOW, HOW ARE YOU GOING TO REPAY IT PLUS INTEREST AT THE END OF THE WEEK? This seems to Tiresias to be the inescapable crux of the matter.

Secondly, all such forms should be required to show clearly, in separate boxes, what repayment will be demanded at the end of the week, and, if full repayment is not made, what the debt plus interest will amount to after 1 month - 3 months - 1 year. The figures will be astronomical.

This may seem like brutal treatment, but it would be better than allowing people unused to simple finance to stagger blindly into disaster.