Wednesday, 1 September 2010

Banks forced to write off £40m a day in family debt

More media misinformation from the Daily Mail about the poor old banks.

Apparently the banks are writing off debt from struggling families to the tune of £40M a day. The paper goes on:

Between April and June banks and building societies were forced to 'write off ' £3.5billion, around £40million every day, the largest amount since records began.......

........The largest chunk of write-offs - a record £2.1billion - was credit card debt, with many spending more on the High Street in a day than they earn in a month.

A further £1.2billion came from overdrafts, personal loans and hire purchase agreements. Just £184million was from 'bad' mortgages.

Before you reach for the hankies it might be a good idea to consider the Mail's steaming pile of misinformation and downright lies a bit further.

Firstly, it's only in the case of bankruptcies that debts get 'written-off'. If it's just that you can't afford to pay then the debt will remain with you. The banks take a decision to maintain the debt or to sell it at for less than the value to a bottom-feeding debt collection company. There is no 'writing-off' in these cases. In fact if the bank values the debt at the price they're willing to accept from the debt collection companies then why not just let the debtor pay that back?

Secondly the banks are complicit in the level of debt initially and are doubly complicit in the acceleration of debt that people suffer when they are in trouble. Take the case of credit cards, one of the major sources of debt. You may be on a 'good' (don't laugh) interest rate of say 16%. At the first whiff of gunsmoke the banks will immediately hit you with a punitive interest rate of up to 30%. They say it's to encourage you to change your spending habits but in reality they're trying to increase the rate at which they claw back the debt before you go tits up. The fact that in doing so may be the difference between survival and pushing people over the edge is neither here nor there. When it comes to money the banks have no morals, no shame and no humanitarian spirit.

Thirdly, you'll find that most of the debt is simply compounded interest. If you've ever found yourself in the position of not being able to pay off credit cards and making do with the minimum payment then you'll know what I mean as you see the debt increase. Profit for the bank without it having to do a stroke of work. Genius! This is why the church is, and should be against usury. An activity that should be made criminal.

Fourthly, those parasites owe the masses big time. We've bailed them out by billions and watched them laugh in our faces, waving and taunting their bonuses at us like the Met at a miner's picket line. There's nothing I'd like to see more than the whole system come crashing down. Perhaps this is the way to do it!!

Banks forced to write off £40m a day in family debt | Mail Online