Lenders using 'draconian' tactics

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A charity has accused creditors of using "draconian" tactics to collect debts from those struggling to pay.

Citizens Advice Scotland (CAS) said lenders are using collection agencies earlier and making an increasing number of phone calls to those owing money.

There were also reports of lenders starting repossession proceedings against home owners who have only missed two mortgage payments.

The findings were based on hundreds of cases collected since September.

Kaliani Lyle, chief executive of CAS, said creditors appeared to be showing little sympathy to debtors.

She said: "Just at a time when people need a little more flexibility in managing their finances, creditors are, in fact, becoming more harsh and resorting much earlier than usual to draconian actions like repossessing homes or passing the debts to collection agencies."

The research also found some private tenants were being evicted from their homes because the landlord had defaulted on mortgage repayments for the property, but the tenants had paid their rent.

Unemployment

Official figures have shown the number of people out of work in Scotland has increased to 137,000 in the last three months to December.

CAS reported an increasing number of Scots were being made redundant, with some not receiving payments owed relating to wages or holiday entitlement.

Some bureaux also reported a 70% increase in cases of people seeking help for debt problems.

Ms Lyle said: "The key is to make sure that people who are facing debt can get access to kind of advice and assistance that they need to nip the problem in the bud."

It comes as figures from the Council of Mortgage Lenders found a sharp fall in mortgage lending in Scotland in 2008.

House purchase lending dropped by 40% last year, compared to 50% in the UK.