Sleepwalking into Debt

Nov. 20, 2006 – Fool.co.uk fully supports National Consumer Week’s emphasis on the major pitfalls and problems for all “Big Spenders”.

National Consumer Week, which is coordinated by the Trading Standards Institute (TSI) and run in partnership with Consumer Direct, has chosen to highlight the risks for consumers when making major purchases. These include splashing out on cars, holidays, furniture and home repairs.

According to the TSI, there are too many examples of unscrupulous traders who take advantage of their customers, who fail to deliver adequate services, or who exploit legal loopholes. The TSI added that National Consumer Week will remind people that the advice they need before buying is freely available to help them avoid some of the worst pitfalls and to help them identify fair traders.

David Kuo, Head of Personal Finance at www.fool.co.uk says: “Consumers need to focus carefully on the true cost of any purchase, especially if they plan to borrow money to finance their dreams.

“If you borrow money, make sure you are aware of the total repayment, not just the monthly repayments. The latter is a clever psychological ploy designed to make us consider the affordability of the monthly repayment and not the total cost of the purchase or loan.

“Unfortunately, the monthly repayment ruse is not illegal, and it is widely used to deceive consumers given that most of us budget on a monthly basis. But when you realise that the total cost of the car you have your eye on is really £20,000 rather than £9,000, you may quickly change your mind.

“Today, you don’t have to be a big earner to be a big spender. But the buy now, pay later culture coupled with greater access to credit at an earlier age makes it all the more important for consumers to be aware of what they are paying if they want to avoid sleepwalking into debt.”

-ENDS-

For further information and/or to arrange an interview with David Kuo, please contact:

Sonia Rehill
PR Manager
DD: 020 7297 8159
soniar@fool.co.uk

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