MILLIONS of pounds of debt is currently outstanding in York - and numerous incentives to borrow more threaten to worsen the problem, a local anti-debt campaigner said today.

The Credit Services Association has warned that mixed messages from the Government and aggressive marketing from lenders are threatening a new wave of UK debtors.

The Government urges consumers to "spend their way out of recession", while also recommending consumers are better educated in terms of understanding their rights and acting responsibly, the CSA says.

John Cossham, who has been working to set up a credit union in York for more than four years, said this is an "accurate reflection" of the debt situation in York and elsewhere.

A credit union is generally set up to offer a financial lifeline to people who are outside the mainstream banking system.

People pay in a small amount regularly, and eventually qualify to take out loans at very low interest rates. Mr Cossham, who describes himself as "a radical green who is strongly opposed to debt of all kinds," said consumers were encouraged to borrow as it is an easy way for companies and individuals to make money.

He told the Evening Press: "The debt problem in York is huge. It is like any other city in the country, in that there are thousands of people who have debts and a big percentage of that debt is giving people difficulties."

"Debts cause ill health and extra worry, they are causing people to scrimp and save in areas they shouldn't be scrimping in, such as healthy food.

"There is a link between poverty and debt, and poverty is the number one impediment to good health and sustainable development."

Mr Cossham, of Hull Road, said the credit union was still at the study group stage.

Organisers are looking to set up a £12,500 feasibility study as to how the union would work in York, with a view to establishing a service that would offer customers a "full range of banking services."

But he said: "If someone is worried about debt, then it is essential they talk to someone about it as soon as they can, rather than let the situation get worse.

"The Citizen's Advice Bureau offers free, confidential and very helpful advice on debt issues."

For more information about York Credit Union Study Group, or to volunteer to help with it, contact Mr Cossham on 01904 422344.

To discuss debt or debt-related issues, telephone York CAB on 01904 636066.

Updated: 10:10 Thursday, January 03, 2002