Question: What does the CCCS do?

Jan Smith: CCCS is the UK’s leading debt management charity. We are dedicated to providing confidential, free counselling and money management assistance to financially distressed families and individuals.

This can be face to face, by telephone or via the web and is available to everyone. Our key objective is to find the most appropriate solution for an individual’s financial situation and personal circumstances.

Question: How did the CCCS originally develop?

Jan Smith: CCCS began operating in the UK in 1993. It was based on a successful model which had operated in the US for many years. We have changed the model considerably to meet the UK market I doubt our colleagues in the US would recognise it.

We wanted to encourage better communications between consumers and their creditors, and bring a repayment ethic back into society. At the time this was sadly lacking, although things have changed over the years, mainly we believe due to our influence in the sector.

Question: Why did the CCCS feel it had to start providing its own IVAs?

Jan Smith: We had always recommended IVAs to clients if it was the appropriate solution, but we then handed them over to an external partner to take them through the IVA process.

In the last 18 months the Insolvency sector has been in somewhat of a turmoil, and sadly the person suffering as a result of the breakdown in lender and IP activity is the consumer.

At CCCS the consumer is the most important party, so we felt we could assist better by utilising all the skills and knowledge we had developed in operating Debt Management Plans, and also influence better practices and standards in the sector in relation to advice, budgeting, fees and lender relationships.

Question: Debt problems for the over-60s are increasing faster than any other age group, why is that?

Jan Smith: That is certainly true for people contacting CCCS helpline. They are also more likely to choose bankruptcy as a solution than any other age group. Many can no longer manage their commitments due to the reduction in income when they retire or work reduced hours.

The majority do not have assets to fall back on; over 60 per cent live in rented accommodation. They will have used credit to support the reduction in income and maintain their lifestyle and that is a recipe for disaster for any age group.

Question: The chancellor recently urged Britain's banks to be more cautious in their approach to lending. Does the CCCS agree, or is debt a question of personal responsibility?

Jan Smith: Banks have tightened up their lending criteria, especially since the introduction of the Banking Code, and this has had some effect.

However it’s often six of one and half a dozen of the other. For every case we see where the bank should never have lent the money we have examples of clients who will say they knew they couldn’t afford the product and should never have borrowed.

Until consumers are more financially literate and banks more prudent there will always be some fallout. Having said that, many people fall into debt as a result of changes in circumstance and no-one can plan for that.

Question: Recent statistics suggest that more people are seeking help for their debt problems – is this a positive sign or just an indication that more people are in debt?

Jan Smith: More people are now aware that if they have a debt problem they can do something about it and don’t need to keep their heads buried in the sand, which is a positive sign.

We haven’t seen a massive increase in the numbers seeking help in 2007, but those we have seen are experiencing higher levels of debt.  A lot of people are tempted by the adverts on daytime TV and try to borrow their way out of debt. This is a solution which for most doesn’t work and simply make the situation worse.

Question: Why do you think a culture of personal debt has become so acceptable, especially with younger people?

Jan Smith: The UK seems to have a 'buy now, pay later' culture, with young people wanting to keep up with the Jones’s and live a celebrity lifestyle, but without the income to fund it.

So inevitably they turn to credit. When well-managed, credit is a good thing and helps people through the peaks and troughs of life changes. When it is being used to supplement income as I have already said it is a recipe for disaster.

Question: How might the possible slowing of economic growth affect your work?

Jan Smith: I think we would be very, very busy. We are already seeing the impact interest rate rises are having on clients, and that coupled with increased unemployment and reducing house values will leave many people in dire financial situations.