Fw: [A-List] UK economy: youth debt crisis

["Gary Santos" <evs@xxxxxxxxxxxx>]

And, to add to that, the younger generation was the generation bombarded
with space age marketing technology with doting parents. As of us, our
parents were the war generation and we all know and went through their
scrimping and hoarding habits.

----- Original Message -----
From: "Michael Keaney" <michael.keaney@xxxxxx>


Young people falling into spiral of debt

EDWARD BLACK
The Scotsman, 25 June 2003

AN INCREASING number of young people are borrowing money from an early age
and those that do feel insufficiently informed about the potential pitfalls
of getting into the red, according to a new poll.

The survey, organised by Edinburgh trading standards officers, also found
more than half (54 per cent) of 12 to 17-year-olds already borrowed money
despite not being legally able to apply for credit until the age of 18.

Not surprisingly, 70 per cent of loans for people aged between 12 and 17
came from parents, though over half said they were paid back. It was also
found that while many understood the meaning of the word credit, less than a
quarter knew what the phrase "APR" (annual percentage rate) stood for.

The survey found that a third of teenagers were worried about getting into
debt.

Researchers discovered that 40 per cent of high-street credit adverts aimed
at young people did not comply with advertising regulations. A further 74
per cent of 17 to 29-year-olds said they wanted more information about
credit and debt.

Councillor Robert Cairns, the executive member for the environment, called
for education on issues of finance and debt to be made available in the
classroom before young people were bombarded with opportunities to build up
debt.

He said: "These days, young people are bombarded with offers from credit
card companies whether it's designer clothes stores or mobile telephone
companies who are encouraging them to get into debt. There can be a certain
degree of ignorance among younger consumers who sometimes assume that some
companies will charge a maximum interest rate of 3 or 4 per cent when the
reality can be as high as 30 per cent.

"We hope these findings will generate a national debate on the subject with
more information being made available to kids at school. That way, young
people would be better prepared for what is made available to them when they
reach 18. The results will be fed towards the Scottish Executive."

Trading standards officers arranged the survey as part of their Street
Credit project, which aims to bring consumer affairs issues to the attention
of young people.

They enlisted students from the city's Queen Margaret University College and
the council youth group, Edinburgh Young Scot, in a bid to secure full and
frank responses to their questions. Rachel Crook, 15, from the Edinburgh
Young Scot group, said many people her age had serious concerns about
falling into debt well before they were old enough to borrow.

She said: "We spoke to over 300 teenagers between 12 and 17 and it is quite
concerning that over a third were worried about debt and so many did not
know what 'APR' stood for.

"As you might expect, nearly three quarters borrowed money from their
parents with over half saying they paid it back. Those that don't pay it
back are perhaps vulnerable later on."

The consumer affairs minister, Gerry Sutcliffe, said:

"The results of the survey highlight some of the areas that need to be
developed with regard to money and credit education for young people."