Personal Finance: Debt through your door

Consumer groups are calling for tighter safeguards to protect vulnerable people from junk mail selling them credit cards or personal loans. This follows a survey showing that card and loan companies spent pounds 222m on selling their products through direct mail in 1998. That translates to nearly 15 per cent of all the money spent on UK junk mail of any form.

National Consumer Council legal officer Harriet Hall says her own organisation's research shows that poorer people resent getting unsolicited offers of credit. Often, she says, these offers come from the same banks which are already chasing the recipient to clear other debt.

Sue Edwards is money advice development officer at the National Association of Citizens' Advice Bureaux. She believes credit card and loan mailings get people into trouble when borrowers fail to think about what might happen in the future. "Sometimes, if you read the small print, you find the low interest rate they're advertising is only for a short period. Problems also arise when the borrower's own circumstances change through, say, divorce or unemployment. "What happens is that people take out a card or a loan, their circumstances change, and then they can't afford them. That's even more of a problem than people taking out loans they already can't afford."

Hall agrees. "People don't get into debt because they're feckless," she says. "They get into debt because something has made them get into debt." NCC wants to see changes to the opt-out box which is often included as part of material requiring your address. The box lets consumers make it clear they do not want their address sold on for use on another company's mailing list. At the moment, inclusion of the box is voluntary, but ticking it does at least give you an opportunity to cut off junk mail before it arrives.

NCC is calling for the opt-out box to be made compulsory and much more prominent, and for it to be used in a standard format. It hopes these measures can be made part of new data protection legislation due for implementation next year.

Edwards believes few people take advantage of opt-out boxes at the moment, and would rather see a system which meant consumers had to give express permission before their name could go on a mailing list. NCC agrees this would be the ideal solution, but says legislators will not accept it.

Financial services companies churn out more junk mail than any other industry in the UK, as this month's survey from MMS Market Movements shows. Thirty-three per cent of all the pounds 1.5bn spent on direct mail to UK consumers in 1998 went on selling financial services. Mail order, in second place, accounted for just 18 per cent of the total spend.

Three of the direct mail industry's four biggest spenders - MBNA, Cornhill and Lloyds TSB - are financial services companies. Credit-card provider MBNA, which tops the list, spent pounds 38.5m in 1998, pounds 10m more than even consumer products giant Proctor & Gamble. For every pounds 100 spent on direct mail of any kind, no less than pounds 14.80 is devoted to selling credit cards and personal loans.

MMS spokesman Sebastian Kindersley says other financial services providers are moving to imitate the card companies' techniques. This, he warns, means more and more companies are already using organisations such as charities for joint-venture mailings. "The first segment of financial services to do that in a big way was credit cards. Now it's happening in a lot more product areas, such as life insurance and general insurance."

If you want to reduce your own junk mail, the first step is to contact the Mailing Preference Service, using the address or phone number shown below. The MPS claims a 95 per cent success rate in preventing unsolicited mailings. It takes up to three months for the MPS to circulate your details to its members, however.

Nearly half-a-million people have registered with the service to say they do not want to receive unsolicited mail. You can also register with MPS to stop junk mail addressed to your home's previous occupant or to stop mail addressed to a member of your family who has recently died.

But MPS cannot help you with mail from companies you originally contacted yourself. Colin Fricker, director of legal affairs at the Direct Marketing Association says: "If you've bought something from a company already, then they're perfectly entitled to send you information about their other services. If you want to stop that, you have to ask the company itself."

Tessa Kelly, director of compliance operations at the MPS, suggests asking for either the customer services department or the direct mail marketing manager when you call. "If companies are sending out mailings, then there is someone responsible for that function."

Mailing Preference Service: 0345 034599. Freepost 22, London W1E 7EZ