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October 20, 2004

New suicide puts debts crisis back in spotlight

From: The Scotsman, UK - Oct 20, 2004


THE UK'S debt crisis was brought under the spotlight again yesterday when it emerged that a deaf 21-year-old had committed suicide because of the extent of his borrowing.

Scott Smith owed £15,000 when he took his own life in August - just three years after he passed the legal borrowing age. He had been allowed to run up debts on three credit cards and a Halifax personal loan.

The case was raised by Norman Lamb, the Liberal Democrat MP for North Norfolk, who said he wanted to "emphasise the tragic consequences of irresponsible lending to young people".

He added: "His father feels convinced that the size of the debt was part of the reason for his death and he feels passionately about the need to lend responsibly."

Mr Smith, from Catfield, Norfolk, is said to have committed suicide following an argument with his father over the mammoth debt pile.

Mr Lamb was speaking in London at a hearing of the government's Treasury select committee, which is investigating the role of credit card pricing and marketing techniques in the UK's debt crisis.

The committee - headed by the Dumbarton MP, John McFall - was taking evidence from three bankers, including James Crosby, the chief executive of Halifax Bank of Scotland.

Mr Lamb asked Mr Crosby about the circumstances of the loan, which was awarded despite a history of troubles with the victim's existing Halifax credit card.

Mr Crosby replied that he was not aware of the specific case, but that "it was far from what we expect" and he would look into it immediately.

The MP told the committee that HBOS had continued to pursue Mr Smith's loan even after the customer's death, putting debt collectors on the case and adding more interest throughout. The victim was even sold payment protection insurance - even though as a seasonal worker he was not eligible to make a claim.

The news highlights a growing number of debt-related suicides in recent months.

A fork-lift truck driver, Dereck Rawson, was reported to have hanged himself after racking up £100,000 over 16 credit cards. And Stephen Lewis, from Nottinghamshire, killed himself after repayments were demanded for £65,000 across 19 cards.

It is estimated that the annual profits made by 50 credit card companies totals £20 billion.

The UK accounted for more than half of all credit card transactions in the European Union last year - 1.82 billion out of 2.75 billion.