In research carried out by moneysupermarket, those who get into arrears by not meeting a loan lender's monthly demand for a mortgage payment or having a cheque returned could well be hit with "punitive charges", which in turn may see them develop greater difficulties with managing other areas of their finances, for example secured loans and credit cards.



The firm pointed out that those who find a cheque or direct debit payment has "bounced back" will automatically be charged 20 pounds from Coventry Building Society, while consumers with GMAC-RFC are hit with a 50 pound fee, should they miss a mortgage payment. The research also revealed Halifax customers are charged 35 pounds every time they receive a letter or a phone call about going into arrears.

Meanwhile, GMAC-RFC and Halifax are reported to charge consumers 100 pounds for counselling on how to manage their debts, but with Abbey and Barclays not offering such a service at all, the price comparison website claimed that the "most vulnerable section of the borrowing community" could find problems in managing their finances increasing even more.

Louise Cuming, head of mortgages at moneysupermarket, said: "While I would not condone missing a mortgage repayment, often financial hardship is caused by circumstances outside the control of the borrower, such as a relationship split. It is fair to say those in the unfortunate situation of going into arrears can expect to face some highly punitive and unjust charges."

She added: "Interest rates are rising and it's impacting homeowners - recent data from the Council of Mortgage Lenders points towards an increase in properties taken into possession. People struggling to make their repayments who might be heading into this territory are particularly vulnerable and it is important lenders meet their 'treating customers fairly' requirement."

Ms Cuming reported that the fact some loan providers are charging for counselling on debt matters is "the biggest outrage" as such advice can be found for free, while some lenders who "appear quick to agree the mortgage are not so quick to help when their customer is most in need". As a result, she claimed that financial firms need to be more sympathetic when lending money as if they "automatically burden customers with more fees and more debt no one wins". The moneysupermarket representative also suggested that some consumers may not even be aware that they are being charged for going into arrears.

However, those Britons who have found that they have developed insurmountable arrears and as a result of damaging their financial history are struggling to access low-rate borrowing may wish to opt for a bad credit loan. Earlier this year, Maya Imberg from Datamonitor suggested that the bad credit loan industry is set for growth due to "difficult" economic conditions and the country's increasing debt burden. She added that more borrowers will fall into the "sub-prime population" as they fall behind in making repayments as property price rises have seen Britons become more willing to borrow money.