It has recently been reported that a number of banks are planning to carry out secret credit checks on mortgage customers and then contact those that they believe are on the verge of falling into mortgage debt to tell them to cut back on their spending in other areas. Whilst the banking industry may view this as a proactive move there are many that will view it as downright intrusive and the plans have now resulted in heated debate over whether this is something that banks should be allowed to do.

According to reports banks are looking to identify which customers are at risk of falling into arrears, particularly if interest rates were to increase, and then contact them by phone to advise them to reduce their spending on things such as mobile phones, television services, internet, going out, and other things that some may consider to be luxuries or non-essentials.

Banks are set to be very blunt about the options that some of those who will be contacted will have available to them – basically, they will be told that they either need to reduce their spending or they could risk losing their home. Homeowners are being warned to focus on their homes and mortgages rather than splashing out on things that they do not need, as those that are already on the verge of problems will most certainly struggle if rates increase from their all time low of 0.5 percent.

One banking official said: “Some people won’t cope when interest rates rise, but for others there are remedies. They need to think about what is their most important debt. It is not their credit card or renewing their Sky subscription, or going out for the latest mobile technology. It is their mortgage. We want customers to look at their finances and change their behaviour.”