Consumer Union Federation President Deniz: Those in legal follow-up will reach 1 million

Mehmet Bülent Deniz, President of the Consumer Union Federation, stated that consumer credit card debt is ballooning, saying, "The number of people entering legal follow-up will reach 1 million by autumn." Stating that product prices are rising even though there is no demand, Deniz said, "There is an intersection point between the consumer confidence index and inflation. That is a disaster point. We will face a very serious poverty disaster."

Speaking to Şehriban Kıraç from the Cumhuriyet newspaper, Deniz said that the number of people falling into legal follow-up due to card debt has been increasing every month since the process that began with the 2021 interest rate cuts. Expressing that both the number of people in follow-up and the amount of spending are increasing, Deniz said the following:

'PEOPLE HAVE HAD TO CHANGE THEIR CONSUMPTION HABITS'

"People have had to change their consumption habits, especially since 2022. For example, they are postponing needs such as concerts, music, entertainment, art, and tourism. They are budgeting specifically for essential basic needs. Since the cash in hand can never cover the urgent mandatory needs of the consumer, grocery shopping, bill payments, education, and health expenses are now made with credit cards. This inevitably inflates the consumer's credit card debt. According to our estimates, the Turkish economy will experience a very serious problem around October."

The full version of Deniz's statements on the subject is as follows:

We are following the consumer confidence index and the CPI very closely. As a result of the economic policies followed by the government, the consumer confidence index has been falling in recent months. According to the government's claim, inflation should have fallen when the consumer did not buy. But that did not happen. Both confidence is falling and inflation continues to rise. There is an intersection point between the consumer confidence index and inflation. That is a disaster point. It is a point of complete stagnation. Product prices are rising even though there is no demand. It seems we will see the peak of this in October 2024. In other words, the disaster will begin in October. 

'ENFORCEMENT OFFICERS WILL COME TO THE CONSUMER'S DOOR'

We have been telling consumers not to get into debt since last August. But this was not a call that had much of a response. Because when the consumer goes to the market, they have to use their credit card. If they want to take bread, cheese, potatoes, and onions home in the evening, they are forced to use a credit card. This summer, people could not go to their hometowns because bus tickets were expensive. If a noticeable drop in inflation is not achieved in July, August, and September, we will face a serious stagnation with the decline in the confidence index. This means no production, no consumption, and no debt repayment. We saw this in the 2001 and 1994 crises as well. 

With October, enforcement officers will come to the consumer's door. They will try to get full on one loaf of bread instead of two. They will not be able to buy shoes for their child going to school. This is a very bad picture. If what the government wants is for us not to buy cheese, not to drink water, not to buy bread, and if inflation will fall this way, we are seeing the trial of this now. We are not buying, but inflation continues to rise. This means something is going wrong.

'THERE USED TO BE MORE DECISIONS IN FAVOR OF THE CONSUMER'

Our law was enacted in 1995. It is a very good law in Turkey where consumers can seek their rights. Since 2008, whenever a consumer thinks they are not getting their money's worth, they immediately resort to complaints. They come to us, they go to arbitration committees, they go to court, they write on social media. There is a consumer profile that is very willing to seek their rights.

In the past, there were more decisions in favor of the consumer in applications. But recently, the right to apply via e-Devlet was granted to consumers. Due to some missing documents in those applications, decisions against the consumer also began to emerge. Currently, consumers win about 55-60 percent of the cases they file. The most complaints are made regarding flight delays and high bills.

'MARKET BASKET EXCEEDED 3 THOUSAND LIRA'

The government said inflation would fall after May, but it did not. Price hikes had decreased slightly during the election period, now prices are rising again. The prices of the products we examined increased by 6.55 percent in January, 3 percent in February, 2 percent in March, 5.28 percent in April, 1.50 percent in May, and 3.42 percent in June. In the first half of 2024, market basket spending increased by 23.73 percent. The market basket, which was 2 thousand 551 TL in January, exceeded 3 thousand lira in June.

The income of a large segment of society is not enough for the expenses they must make to survive. In the January-May 2024 period, 750 thousand people fell into legal follow-up because they could not pay their individual loan and credit card debts. This points to a population of 3 million with family members. When the number of people in follow-up rises to 1 million, it will directly affect 5 million people including their families. Consumer debt has reached 72 billion TL. 3 million of our citizens have completely disconnected from the economy and have fallen to the door of enforcement. The economy of the street shows that this negativity will gradually increase. Citizens are unable to pay even the minimum amount of their credit card debt. When they cannot pay, a monthly interest of 5 percent is applied to the remaining amount. For example, if you spend 1000 TL from your card, and pay 40 percent of the minimum amount the next month, and make no further spending, it takes 55 months to close this credit card debt. We have been warning for a long time that bank debts of consumers will explode. If they explode, social peace will be disrupted, and our peace will be disturbed. Let's take precautions now.

'FOLLOW-UP PERIOD SHOULD BE INCREASED TO 180 DAYS'

The legal follow-up period, which is 90 days, should be temporarily increased to 180 days. A law should be enacted to allow for the restructuring of debts in order to melt down the stock of bank debt that can no longer be turned over.

Inflation corrupts morality. One should not imagine what a hungry person can do. The end of this is not good. In a high inflation environment, there are applications and advertisements that promise to make you rich and earn big money with just one click. These offers entice the consumer at that moment. Citizens can fall for such offers because they need even three cents in such periods.

News Source: 12punto