Unsecured loansVorderman under fire over debt loan ads

04 May 2006

Television presenter Carol Vorderman has come under fire for promoting companies which offer debt consolidation loans secured against people's homes.

Which? first raised the issue back in 2001 when reader Graham Newberry took out a loan with FirstPlus after seeing a television advert for the company featuring Vorderman.

He had to pay fees and interest of GBP 9,500 despite paying off the loan early.

Now debt charity the Consumer Credit Counselling Service (CCCS), has criticised Vorderman for fronting an ad which it said could lead people to think debt consolidation was suitable for them when it was not.

An investigation carried out for BBC One's Real Story found that FirstPlus was prepared to lend people more than the equity they had in their property, putting customers into negative equity.

One couple were lent GBP 47,000 against the value of their home to consolidate debts of over GBP 20,000, even though their joint income was just GBP 18,000 a year.

To add to the couple's problems, the interest rate on the loan they took out in December 2003 has increased. It was 10.9 per cent but has since gone up to 12 per cent, leaving the couple struggling to meet monthly repayments.

CCCS is supporting a petition aimed at getting Vorderman to stop promoting secured loans.

It said people should consider other options before converting unsecured debt into a loan which was secured on their home.

CCCS Chairman Malcolm Hurlston told BBC One's Real Story: 'I think the problem is because of the high profile, she is well known for having a kind of expertise and this is transferred in the mind of the consumer.'

A FirstPlus spokesman said they had never repossessed a home, and lending more equity than people had in their property was part of its service.

He said: 'We hope that Carol gives people the feeling that FirstPlus can help restructure debts quickly, simply and responsibly.'

Which? contacted Carol Vorderman's agent for a comment, but he failed to return our calls.