Recent growth in debt is attributed to a spike in auto loans, offsetting declines in credit card debt, lines of credit and instalment loans.Photograph by: Kevin Mio
, Kevin Mio

Fresh data suggests Canadians are continuing to pile on consumer debt, but the modest increase suggests credit growth is slowing to crawl-speed.

TransUnion’s latest quarterly look at non-mortgage debt shows the average consumer added $69 in non-mortgage debt during the first three months of 2012 from the previous quarter to bring outstanding debt to $26,029.

From last year, consumers are on average $432 deeper into debt.

The recent growth is attributed to a spike in auto loans, offsetting declines in credit card debt, lines of credit and instalment loans.

Car loans rose by more than $2,000, or 12.6 per cent, from the first quarter of 2011 to $18,2012.

TransUnion’s Thomas Higgins said even though consumer debt remains high, growth has slowed and in the last year has been skewed by the auto sector.

“This could be seen as a positive,” said Higgins, the credit reporting agency’s vice president of analytics.

“Increases in auto loan debt generally mean more consumers are purchasing vehicles and are effectively managing their debt because they have strong enough credit to qualify for loans.”

In comparable year-over-year periods ending with the fourth quarter of the year, consumer debt growth has slowed from about 10 per cent and higher in 2008 and 2009, to just over five per cent in 2010 and to one per cent in 2011.

The latest quarter’s data shows a slight acceleration but only to 1.66 per cent annualized.

TransUnion also points out that consumer delinquencies remain low and that auto delinquencies are now the lowest in two years.

The Bank of Canada has warned for some time that many Canadians are at risk of getting in over their heads with debt, but the main concern is mortgage and home equity credit, which represents about 70 per cent of all household debt.

According to Statistics Canada, household debt to annual disposable income rose has been at record highs of over 150 per cent for most the past year.

Analysts note that the debt ratio has continued to rise even though there have been signs of cooling in the housing market, in part because income growth has also eased.

In a report issued Tuesday, the Royal Bank said the first quarter 2012 also saw home affordability decline, meaning the costs of maintaining a residence were increasing as a percentage of income.

Much like housing debt, the TransUnion data shows that residents of British Columbia have the most non-mortgage debt at $37,433, while consumer debt in Ontario is just below the national average, and in Quebec averaged a relatively low $18,475.

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Original source article: Car purchases add to consumer debt, but overall credit growth slows to crawl   
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DUBLIN–(BUSINESS WIRE)–Research and Markets (http://www.researchandmarkets.com/research/pkl3t6/maximising_recover)
has announced the addition of the Maximising
Recovery Rates in Consumer Debt report to their offering.

During such difficult financial times, where the economic environment
remains volatile, debt collection agencies can only rely on the methods
and strategies that they employ to increase the rates of debt collection
and recovery. Debt collectors are faced with a multitude of challenges:
external economic pressure, consumers with rising delinquency rates who
are also faced with multiple credit relationships, and increasing
competition in the debt collection agency. Considering this, obtaining a
deep understanding on the various strategies in collecting debt
implemented in various countries is a must to help improve debt
collection rates and contribute to a rapid recovery from the global
economic crisis. Different countries address debt collection in a myriad
of ways such as through field visits, a third party debt collector,
buying and selling of debts, and regular and constant reminders via
multiple communication channels. There are also some who utilise threats
and send lawsuits. The wide variation of debt collection practises makes
it even more important to study and analyse each one of them so as to
obtain a deeper understanding of the debt collection industry, financial
industry, and banking industry.

Key Highlights

– Debt collection agencies are faced with an unusual and complex
financial environment, a ballooning number of defaulters and high bank
de-leveraging

– Debt collection techniques are evolving. It is much easier now, even
compared to a few years ago, to determine market characteristics and
prescribe new collection techniques

– Legacy processes such as credit bureaus, non-traditional scoring
methods and internal scoring models are no longer relevant – agencies
pursuing these routes are putting themselves at a disadvantage

– Debt collection is not just a purely operational procedure –
efficiency now plays a key role

Key Topics Covered:

1 The debt collection industry after the banking crisis

2 Debt collection strategies and tactics call for new techniques

3 Post crisis tools and technologies for debt collection

4 Advancing Collection Management

5 Outsourcing collections and debt selling

6 Global best practises in debt collection

7 Consumer and debt collection – clearing the dividing line

8 Challenges to the debt collection industry

9 Debt collection industry outlook

10: Conclusion

Companies Mentioned

• Reintegra
• Hunter Warfield
• MVBA
• Eversheds
• MGt
• HBOS

For more information visit http://www.researchandmarkets.com/research/pkl3t6/maximising_recover

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The Finance and Leasing Association (FLA) say that consumer borrowing rose by 9% between April last year and this April 2012.
 
This April, £4.5 billion was borrowed by consumers on store cards, credit cards, loans, store credit, second mortgages and car finance.
 
Store card borrowing is the only area of consumer credit that became less popular – it contracted 21% over one year. Negative media attention on this high-interest form of borrowing may have contributed, as well as the fact that people are generally cutting back on non-essential spending during the downturn.

Continue reading below…

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Dublin – Research and Markets (http://www.researchandmarkets.com/research/mtg8wp/uk_consumer_debt_p)
has announced the addition of the UK
Consumer Debt Purchase: Market insight report report to their
offering.

This report reviews the UK consumer debt purchase industry. It
quantifies the market size and historical growth rates while reviewing
key factors behind these figures and exploring drivers of profitability.

It also carries out an in-depth analysis of the relevant drivers of
industry growth – in particular relevant economic indicators such as
total consumer debt, unemployment levels and debt write-off rates – and
more specific factors including levels of personal insolvencies, the
attitudes of consumer creditors to the concept of debt sale and the
discount to face value typically paid for debt.

Market Overview:

Over the last couple of decades the market for the sale of portfolios of
debts held by UK consumer creditors, such as credit card issuers,
personal lenders, utilities and telephone companies, has grown from
start-up into a large, established market

Having been impacted by the credit crunch, the market is expected to
recover and to reach revenue of ?900m in 2012.

Debt purchase can be an attractive market with good returns on capital
and high growth. However, as post-2008 experience has shown, it is not
without risk having cyclical characteristics and exposure to the health
of the economy and credit market shocks.

The market is relatively fragmented with over 60 buyers believed to have
purchased UK consumer debt portfolios.

Future growth appears likely given the:

– Success of several large purchasers in raising additional capital

– Recent recovery in the level of debt sales

However, some uncertainties remain.

Key Topics Covered:

The Debt purchase market

Market definition

Adjacent markets

Market size and growth

Market drivers

Overview

Driver trends

Performance of the leading debt purchasers

Industry attractiveness and value drivers

Industry characteristics

Value drivers for debt purchasers

Competitive landscape

Leading operators

Profiles of leading operators

Forecasts

Approach

Key drivers forecast

Market forecast

Risks to the forecast

Companies Mentioned:

– 1st Credit

– Arrow Globa

– Cabot

– CapQuest

– Link

– Lowell

– Marlin

– Max Recovery

For more information visit http://www.researchandmarkets.com/research/mtg8wp/uk_consumer_debt_p

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WASHINGTON (MarketWatch) — American households cut their overall debt again in the first quarter and saw a $2.8 trillion increase in net wealth owing to stock-market gains — gains that have since evaporated.

The Federal Reserve, in its quarterly “flow of funds” report, said Thursday that household debt fell by a seasonally adjusted 0.4% in the first quarter. That follows a 0.2% decline in the last three months of 2011.

The central bank originally had reported that consumer debt rose in the fourth quarter for the first time since the end of the last recession.

A 3% decrease in mortgage debt more than offset a 5.8% rise in consumer credit. The drop in household debt was the 15th straight decline.

United Car Loan is the greatest car loan and vehicle credit resource on the internet.

OTTAWA – Fresh data suggests Canadians are continuing to pile on consumer debt, but the modest increase suggests credit growth is slowing to crawl-speed.

TransUnions latest quarterly look at non-mortgage debt shows the average consumer added $69 in non-mortgage debt during the first three months of 2012 from the previous quarter to bring outstanding debt to $26,029.

From last year, consumers are on average $432 deeper into debt.

The recent growth is attributed to a spike in auto loans, offsetting declines in credit card debt, lines of credit and instalment loans.

Car loans rose by more than $2,000, or 12.6 per cent, from the first quarter of 2011 to $18,212.

TransUnions Thomas Higgins said even though consumer debt remains high, growth has slowed and in the last year has been skewed by the auto sector.

This could be seen as a positive, said Higgins, the credit reporting agencys vice president of analytics.

Increases in auto loan debt generally mean more consumers are purchasing vehicles and are effectively managing their debt because they have strong enough credit to qualify for loans.

In comparable year-over-year periods ending with the fourth quarter of the year, consumer debt growth has slowed from about 10 per cent and higher in 2008 and 2009, to just over five per cent in 2010 and to one per cent in 2011.

The latest quarters data shows a slight acceleration but only to 1.66 per cent annualized.

TransUnion also points out that consumer delinquencies remain low and that auto delinquencies are now the lowest in two years.

The Bank of Canada has warned for some time that many Canadians are at risk of getting in over their heads with debt, but the main concern is mortgage and home equity credit, which represents about 70 per cent of all household debt.

According to Statistics Canada, household debt to annual disposable income has been at record highs of over 150 per cent for most the past year.

Analysts note that the debt ratio has continued to rise even though there have been signs of cooling in the housing market, in part because income growth has also eased.

In a report issued Tuesday, the Royal Bank said the first quarter 2012 also saw home affordability decline, meaning the costs of maintaining a residence were increasing as a percentage of income.

Much like housing debt, the TransUnion data shows that residents of British Columbia have the most non-mortgage debt at $37,433, while consumer debt in Ontario is just below the national average, and in Quebec averaged a relatively low $18,475.

United Car Loan is the greatest car loan and vehicle credit resource on the internet.

Sarah currently works as a writer for TechCrunch, after having previously spent over three years at ReadWriteWeb. Prior to becoming a professional blogger, Sarah worked in IT across a number of industries, including banking, retail and software. rarr; Learn More

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First of all, this is when most people receive their annual salary bonuses and tax refunds as well as strive to pay down amounts owed from the holiday shopping season. That explains why consumers have paid down a significant amount of debt during the first quarter of each of the last three years before erasing this decrease over the next three quarters and ending the year with a greater debt burden than they started with.

When most people look at credit card debt statistics, they also forget to consider the amounts that banks have written off the books for accounting purposes. This debt may no longer appear in the governments consumer debt data, but it does not merely disappear or cease to be owed by the debtor. Actually, indebted consumers are at risk of being sued for 3-15 years after they become delinquent, depending on their state.

The True State of American Credit Card Debt

With all of that in mind, a new picture of consumer spending in the US begins to take shape, and its a decidedly more ominous one. According to the latest Credit Card Debt Study from Card Hub, US consumers actually paid down $35.8 billion during the first quarter of 2012 and are on pace to have $50 billion more in credit card debt at the end of 2012 than they had at the beginning.

Consumer credit management is also consistently worsening. In the last nine fiscal quarters — with the exception of Q1 2012 and Q3 2010 — weve seen two distinct trends, and neither are good.

• Our first quarter pay downs are increasingly smaller and the amount of debt we add in each subsequent quarter is greater than the amount incurred during the same quarter the year before.
• Every quarter, credit card debt metrics are looking worse than the same quarter the year before.

Now, does this look like the same type of economic landscape portrayed by reports hailing newfound frugality? Take, for example, a 2010 Booz amp; Co. study titled The New Consumer Frugality: Adapting to the Enduring Shift in US Consumer Spending and Behavior.

A new frugality, characterized by a strong value consciousness that dictates trade-offs in price, brand, and convenience, has become the dominant mindset among consumers in the United States — and probably in other wealthy countries as well. Two-thirds of American shoppers are cutting coupons more frequently, buying low price over convenience, and emphasizing saving over spending. Per capita consumption expenditure has declined across demographic groups. Consumer sentiment remains weak. These trends are not going to change, no matter the pace of economic change, the study reads. In short, the Great Recession has forced consumers to shift their behaviors, and many of these new behaviors will stay in place.

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FARMINGTON HILLS, Mich., June 20, 2012 /PRNewswire via COMTEX/ –
Five groups operating in Wisconsin violated state licensing; charged large upfront fees

Recently, the state of Wisconsin filed actions against five debt settlement companies operating in the state. The actions stated, in part, that the companies were not licensed in Wisconsin and each charged large upfront fees, a violation of the Wisconsin Department of Financial Institutions, Division of Banking, requirements.

“We applaud the State of Wisconsin for taking steps to protect consumers,” said Rick Bialobrzeski, GreenPath Debt Solutions director of government affairs and communications. “Unfortunately, there are predators in the marketplace that prey on people who are experiencing financial hardship. These companies make lots of telemarketing calls, buy ‘leads’ from marketing companies, and make attractive promises to entice consumers to sign up for their programs.”

In part, the Wisconsin Department of Justice said, “The company stated it would…negotiate with the creditors to forgive up to 60 percent of the consumer’s debt, and use the accumulated funds in the trust account to pay the creditors. Unfortunately, in many instances the upfront fees absorbed most of the trust money such that there were insufficient funds to pay the creditors.”

The department highlighted a couple who paid more than $6,900 without receiving any adjustment services. After the company took fees out of the account, only $2,300 remained for the creditors.

TIPS ON HOW TO GET HELP

The United States Federal Trade Commission (FTC) publishes a guide (
www.ftc.gov/bcp/edu/pubs/consumer/credit/cre26.shtm ) to help people recognize the difference between a legitimate credit counseling organization and a predatory debt settlement company. The FTC says that “debt settlement differs greatly from credit counseling. It can be very risky, and have a long term negative impact on your credit report and, in turn, your ability to get credit.”

When looking at an advertisement or website, it can be difficult to distinguish between a debt settlement company and a legitimate credit counseling organization.

GreenPath Debt Solutions, headquartered in Michigan, with more than 60 other branch offices across the United States, (including Wisconsin offices in Madison and Milwaukee), has provided some guidelines in helping individuals choose a legitimate credit counseling organization.

Be wary of companies that claim they can arrange for your debt to be paid off for a much lower amount — 30 to 70 percent of the balance you owe.

Beware of any company that contacts you through telemarketing.

Legitimate companies should help you develop a budget and action plan free of charge.

You should not be required to pay more than $25 to $75 in upfront fees to set up a debt repayment program.

Work with a company that has been in business for a long time, with an established track record of service.

Do some research on companies you are considering. What is their rating with the Better Business Bureau? Do they have a physical address? How long have they been in business?

If you are experiencing financial difficulties, contact a non-profit credit counseling organization. A good place to start is with the National Foundation for Credit Counseling (NFCC) at 800-388-2227 or
www.nfcc.org .

Learn more about debt, credit, and finances by logging on to GreenPath Debt Solutions’ website at
www.greenpath.org and bookmark social media at
www.facebook.com/greenpathdebt and
www.twitter.com/greenpathdebt .

About GreenPath Debt Solutions

GreenPath Debt Solutions is a nationwide, non-profit financial organization that assists consumers with credit card debt, housing debt and bankruptcy concerns. Their customized services and attainable solutions have been helping people achieve their financial goals since 1961. Headquartered in Farmington Hills, Michigan, GreenPath operates more than 60 branch offices in Michigan, New York, New Hampshire, Colorado, Florida, Texas, Vermont, Illinois, Indiana, Wisconsin, Arizona and Wyoming. GreenPath also delivers licensed services throughout the United States over the Internet and telephone. GreenPath is a member of the National Foundation for Credit Counseling (NFCC) and is accredited by the Council on Accreditation (COA). For more information, visit
www.greenpath.org .

SOURCE GreenPath Debt Solutions

Copyright (C) 2012 PR Newswire. All rights reserved

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S Korea consumer debt growth slows in Q1: cbank

SEOUL: Annual growth of South Korean consumer debt slowed in the first quarter in the wake of a government crackdown and in line with the cooling economy.

Debt owed by households and related non-profit organisations rose 7.7 percent by the end of March from a year earlier, the slowest pace seen since the end of 2009, the Bank of Korea said on Thursday. It follows annual growth of 8.5 percent by the end of September last year and 8.8 percent three months earlier. It also compares with double-digit growth rates seen for about three years until late 2008.

South Korea has introduced a series of administrative measures aimed at containing debt growth at households since last year on concerns the heavy household debt could sow the seeds of a fresh financial crisis. Despite the slowing growth, debt owed by households and related non-profit organisations stood at 88.6 percent of the rolling 1-year gross domestic product of South Korea at the end of March, Thomson Reuters calculations show.

It was little changed from 89.2 percent set at the end of 2011 and compares with less than 85 percent seen before the 2008 global financial crisis, Bank of Korea data shows.

It was also unclear how effective the government measures were because the slowing debt growth came as the country’s annual economic growth dipped to the lowest since the second quarter of 2009 in the first quarter in nominal terms. reuters

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