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10 The Portugal News • 15 Feb 2020                                 News


      Workers falling into further debt                                                                                 N N N N N  SAMPSON
                                                                                                                               DAISY



      More than 29,000 people dealing with debt problems turned to Deco, Portugal’s leading consumer association, for help in
      2019 with the main cause of indebtedness being attributed to deteriorating working conditions rather than unemployment.
                                                                                difficulties, but being  housing loans had a 73  percent) of their net
                                                                                replaced by the         percent weight in total  income on the monthly
                                                                                deterioration of working  credit, personal credit 20  instalments of all loans
                                                                                conditions, such as late  percent and credit cards 7  held (housing and
                                                                                payment of wages, loss of  percent.             consumption), although
                                                                                income (namely due to sick  The data revealed another  there are exceptions.
                                                                                leave) and reduction of  major cause for concern for  “These measures had
                                                                                overtime or commissions.  the consumer protection  some effect on the granting
                                                                                Deco recalled that the  association, the effort rate  of credit for housing, with the
                                                                                unemployed who returned  borne by over-indebted  banks acting according to
                                                                                to the labour market last  consumers, or the    the recommendations of the
                                                                                year have been confronted  percentage of total  BdP. But there is a lot to do,”
                                                                                with temporary and/or   household income        she said, adding that among
                                                                                partial contracts and that,  earmarked for the payment  the requests for help that
                                                                                from a financial point of  of credit instalments, which  come to Deco there is a lot of
                                                                                view, this situation leads to  last year was 76 percent.  credit recently contracted by
                                                                                insecurity and instability  Natália Nunes pointed out  families whose rate of effort
                                                                                and is associated with low  that the effort rate should  no longer allowed them to
                                                                                wages.                  not exceed 35 percent of  have more credit.
                                                                                “Regarding credits, we see  income, which means that  Deco advocated creating
                                                                                that families still have five  monthly credit spending  very strict rules for the
                                                                                credits (one for housing,  should absorb no more  granting of credit cards and
                                                                                two personal and two credit  than 35 percent of the  applying the
       Reasons for this over-indebtedness include the deterioration of working conditions,
       Reasons for this over-indebtedness include the deterioration of working conditions,
       Reasons for this over-indebtedness include the deterioration of working conditions,
       Reasons for this over-indebtedness include the deterioration of working conditions,  cards), as in 2018, but we  family’s monthly income.  recommendations to the
       Reasons for this over-indebtedness include the deterioration of working conditions,
       such as late payment of wages, loss of income (namely due to sick leave) and reduction of  see an increase in the  On 1 July 2018, new rules  granting of consumer
       such as late payment of wages, loss of income (namely due to sick leave) and reduction of
       such as late payment of wages, loss of income (namely due to sick leave) and reduction of
       such as late payment of wages, loss of income (namely due to sick leave) and reduction of
       such as late payment of wages, loss of income (namely due to sick leave) and reduction of
       overtime or commissions. (Photo: Lusa)
       overtime or commissions. (Photo: Lusa)
       overtime or commissions. (Photo: Lusa)
       overtime or commissions. (Photo: Lusa)                                   amounts of personal credit  of the Banco de Portugal  credit.
       overtime or commissions. (Photo: Lusa)
                                                                                and credit cards,” said  (BdP) came into force  The association’s data
              ccording to      Deco consumer protection  What changed, analysing  Natália Nunes.        restricting the granting of  showed that the majority
              Natália Nunes,   association] did not    data from that office from  The average amount of  new loans for housing and  (44 percent) of consumers
              coordinator of   decrease in 2019,       2019 to 2018, were the   credit, which in 2018 was  consumption, establishing  asking Deco for help were
       ADeco’s Financial       remaining the same since  reasons for this over-  €16.111 for personal credit  three types of limits,  workers in the private sector
       Protection Office, the  2017,” and totalling 29,154  indebtedness, with  and €7.580 for credit cards,  recommending the entity to  (against 14 percent in the
       balance of the year is not  last year, when in 2018 it  unemployment no longer  rose last year to €22,000  grant new loans only to  public sector), 19 percent
       positive: “The number of  was 29,350 and in 2017 it  being the main cause of  and €8.300 respectively.  customers who spend a  were unemployed and
       requests for help [to the  had been 29,000.     families’ financial      In percentage terms,    maximum of half (50     another 19 percent retired.
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