RBS customers face new charge

The backlash from the Office of Fair Trading’s (OFT’s) crackdown on bank charges is beginning to be felt.

After the organisation announced that banks should reduce the amount they charge customers when it comes to penalty fees, it became apparent that banks would look for other ways to make their money.

Now Royal Bank of Scotland (RBS) has announced that it is making some changes to the way that it operates.

The bank has revealed that customers who change address must inform RBS before two statements are sent to the previous property or they will be hit with a £12 fine.

In addition, RBS has plans to change the way it treats card purchases of items such as gift vouchers and betting slips.

The bank wants these “cash equivalent products” to be charged in the same way as cash advances, meaning customers will incur a higher rate of interest.

RBS is not the first bank to announce changes to its operations since the OFT crackdown.

A number of firms have increased interest rates, while some are charging customers for failing to use their card on a regular basis.

Tags: banks, card purchases, cash, bank, backlash, amount, way, Fair Trading

Hips will put off sellers

The introduction of home information packs (Hips) to the UK housing market is likely to reduce the number of properties sold.

That is according to the National Association of Estate Agents (NAEA) which says the ’see what happens’ seller is likely to become a thing of the past.

Research shows that around 20 per cent of homeowners, who were not even considering selling their home, have been tempted to put their house on the market after seeing their neighbour get a good price for theirs.

However, the NAEA believes that with Hips set to become a mandatory part of any sale from 1st June this year, this type of seller will be put off – adversely affecting those trying to get a mortgage on a property.

It is going to cost up to £500 to obtain a Hip and this may prove to be too costly for a homeowner who is merely interested in finding out how much their home is worth.

“A significant percentage of sales that go through start with a seller testing the water,” explained Peter King, the NAEA’s chief executive.

“The lack of ability to do this without paying for a Hip first is likely to put many sellers off.

“This will reduce the supply of houses available, cause the market to slow down and lead to additional house price inflation. Both these factors could adversely affect the economy,” he added.

The NAEA is calling upon the government to back down over the introduction of Hips.

Tags: house, introduction, cent, government, NAEA, price, National Association of Estate Agents

Savers have changed attitude

The way we approach banking has changed in recent years, with new research showing that more of us are opening instant access savings accounts.

A study by Birmingham Midshires shows that 51 per cent of people who opened a savings account in the last three months opted for the instant access option.

This is in stark contrast to the number who chose to make their money slightly harder to get to, with only 16 per cent keeping it out of reach.

Birmingham Midshires says that this trend is all part of the ‘have-it-now’ culture of Britons in the early 21st century and the firm says that consumption of goods figures back this claim.

The Office of National Statistics recently published these statistics, showing that we consumed 73 per cent more goods in 2005 than we did in 1991.

Experts at Birmingham Midshires say that it appears to be the case that many Brits are saving in order to spend.

“Instant access accounts are an excellent way of saving for short term needs, however, we would encourage savers to also remember the long term and make adequate provisions,” said Jason Robinson, director of savings operations at the company.

“It is worth considering a number of savings pots for different purposes which can nowadays be very easily managed online.”

There is nothing wrong with saving money for a big purchase, however, it is also advisable to make sure that you have money put aside to help you through an unforeseen change in circumstances.

Tags: option, jason robinson, savers, online, director, number, savings operations, three months

Customers could be losing out on savings accounts

Many consumers in the UK like to save some money towards a rainy day, to build a nest egg, or simply for emergencies, but recent data has revealed that an alarming number of savers in the UK are getting really raw deal on their savings and could net much more in interest each year on their savings simply be taking the time to find a savings account that pays a decent rate of interest.

Experts claim that the apathetic attitude of some savers, and even misplaced loyalty to their banks, could mean that many savers are losing out on a small fortune in interest each year.

Recent research was carried out by Sainsbury’s Bank, and according to the information from the research, around forty percent of savers in the UK are earning less on their savings than the rise in inflation.

With inflation working its way up to over three percent according to the Office for National Statistics, it seems that around two in every five savers are earning under the three percent mark on their savings, with around sixteen percent of banks and building societies paying even less than this, at two percent or under.

The Bank of England has increased interest rates three times since August of last year, taking the base rate from 4.5% to 5.25%, and many predict that there will be a further rise of at least 0.25% in may this year, which would take the base rate to 5.5%. However, despite these increases only a fifth of banks and building societies offer savings accounts that have an interest rate of fiver percent or higher.

As an illustration, officials from Sainsbury’s Bank stated that someone with £3000 in a savings account paying 5.5% could earn around £100 more in interest each year than someone with the same amount of money in an account that paid 1.5%. 

Tom Smith
28th April 2007

Tags: increase, england, Banking, bank, accounts, rate, earn, interest, savings

Annual fee imposed by Morgan Stanley

Customers using the Black cash back credit card with Morgan Stanley have been hit with a £20 annual fee. The Black credit card is offered to customers that have been turned down for the platinum card with Morgan Stanley, although it is not actively marketed by the company.

The cash back levels on the Black card are 1% for the first £2000 worth of purchases in the year, and 0.5% thereafter. However, the cost of the annual fee means that those spending less that £2000 on their cards will effectively have their benefits offset, which means that the card is not really providing any reward at all, despite being a cash back card.

According to officials from Morgan Stanley not all customers using the Black cash back credit card will be charged the annual fee.

One Morgan Stanley spokesperson stated: ‘We have received the spending patterns and repayment history of customers and as a result we have imposed the fee for a number of customers.’

However, some cardholders are annoyed by the charge, and feel that it is unjustified and unwarranted.

One Black cardholder stated: ‘I spend around £300 a month on the card and clear the balance by direct debit at the end of each month. I’ve never missed a payment and I suppose I’m one of those customers that doesn’t actually make the credit card company any money. I liked the cashback aspect of the card, but this fee doesn’t make it worthwhile now.’

The annual charges are due to come into force in June of this year, and consumers that want to avoid having to pay an annual fee should start looking for an alternative credit card before this time. As with many other card companies, it is thought that this annual fee could be a way for the card company to recoup some of the revenue losses that resulted from financial regulators placing a ceiling limit on penalty charged last year.

Tags: annual, cards, charges, cash, back, credit, stanley, earn

Consumer group wants investigation into calculation of credit card interest

The UK consumer group, Which?, has demanded an investigation into how credit card companies calculate the interest to be paid on cards, claiming that many companies are using a wide range of methods to calculate interest, which is not only netting them more money but is also causing mass confusion for credit card users.

According to the watchdog, these credit card companies are using around a dozen different methods in order to calculate interest on credit card repayments, and the confusion that this is causing is resulting in the companies making even more money from their customers.

Which? officials have gone on to say that the way that these credit card companies are calculating the interest to be charged means that comparing APRs on credit cards to find the best deal is ineffective. Which? states that credit card companies that make up for ninety percent of the credit card market are using around a dozen different ways to work out the interest. This includes the top twenty providers of credit cards. According to Which? there are now a number of factors that are used by these companies in order to determine how the interest will be calculated on a particular account.

One official from Which? stated: “People believe that APRs are a dependable way of comparing credit cards, but our research shows that APR cannot to be relied upon for true credit card comparisons.”

However, APACS officials state that using just one way to work out interest would also affect consumers, as the process used may not suit every consumer.

One APACS official stated: “There are a huge variety of cards on the market and some people prefer to have a lower APR but pay earlier, others might like a slightly higher APR but only want to pay interest on the amount left outstanding.”

Tom Smith
28th April 2007

Tags: interest, credit, compound, cards, rates, charges

Burglaries, vandalism on the rise

The latest figures show that overall crime in Britain has fallen by two per cent but homeowners will be concerned that burglary and vandalism rates are up.

Home Office statistics reveal that burglaries rose by eight per cent, while vandalism increased by 11 per cent in the final quarter of 2006.

These figures have led to a leading insurance firm carrying out its own research in which it found that one in ten Brits have had their property vandalised.

According to research by Lloyds TSB, half of the population believe that vandalism is one of the biggest problems currently facing modern British society, while 22 per cent are concerned that they will become a victim.

The most common form of vandalism is the ransacking of homes, while smashing windows, damaging fences, putting graffiti on walls and smashing garden ornaments are also popular.

“Prevention is always better than cure when it comes to crime and it is great to see evidence that crime appears to be falling in some areas,” commented Phil Loney from Lloyds.

“However our own research backs up today’s crime survey figures which show that vandalism is a problem on the rise. Insurance is vital in this equation and home owners can’t afford to cut back on their cover.”

The perceived causes of vandalism are varied with many Brits blaming a lack of discipline at home (79 per cent), boredom (74 per cent), alcohol and drug abuse (70 per cent) and the lack of a deterrent (44 per cent).

A further nine per cent even blame modern music for the rising crime.

Tags: research, deterrent, burglaries, modern british society, Law Crime

Thieves get on your bike

Britain’s shift towards being a nation of green-minded individuals is being exploited by thieves.

That is according to new research which shows that bicycle thefts have grown by ten per cent in the last 12 months.

As more and more of us try to do our bit for the environment by ditching the car and peddling to and from work, thieves are capitalising.

Halifax Home Insurance has revealed that a bike is stolen every 71 seconds in the UK, with their being a total of 439,000 bike thefts every year.

Bike owners are now being advised to check their home insurance policy to ensure that their wheels are covered should they be stolen from a public place.

Figures from Halifax show that in 2006, 89 per cent of bike thefts occurred in a public place when the bike had been locked up.

“One bicycle theft occurring every 71 seconds is an astounding figure and should certainly make cyclists think more carefully about the level of security they use to keep their bike safe,” said Vicky Emmott from Halifax Home Insurance.

“With the majority of thefts coming from bikes that have been placed under lock and key, it may be worth considering spending a little more money for a high security lock that might stand a better chance of deterring a thief.”

London has been named as the UK’s bike theft hotspot and the average claim in the capital is for around £340.

Tags: bike theft, bicycle theft, green-minded individuals, lock and key, United Kingdom, policy, uk, bicycle

Card fraud unit celebrates 5th year

Apacs, the UK payment association, is celebrating the fifth anniversary of one of the UK’s leading anti-fraud squads.

The Dedicated Cheque and Plastic Crime Unit (DCPCU) was established in 2002 with the task of cracking down on cheque, debit and credit card fraud.

Since it was first introduced, initially as a two-year pilot, the DCPCU has been responsible preventing £130 million worth of fraudulent activity and secured 156 convictions.

Apacs and its member banks sponsor the specialist police unit and the organisation says that the DCPCU plays a massive role in reducing fraud.

“The Dedicated Cheque and Plastic Crime Unit has been an important initiative to cut fraud over the last five years and I am delighted at the successes they have had,” said Home Office minister Vernon Coaker.

“The banking industry must also take credit for these successes. Their financial support for this unit provides an excellent example of how a public/private partnership can work together to create a valuable addition to law enforcement when tackling organised financial crime.”

The DCPCU’s fifth birthday falls on April 29th 2007.

Tags: law enforcement, initiative, home, massive role, Vernon Coaker, enforcement, United Kingdom, specialist police unit

OFT launches huge study into banking

The Office of Fair Trading (OFT) has announced that it is launching a wide-ranging study into personal bank current account pricing.

This will run alongside an investigation into charges for unauthorised overdrafts and returned items, making it the largest study into personal banking ever undertaken.

OFT officials will look at whether free banking offers customers enough transparency and value, while it will also focus on the fairness and impact of charges.

In addition, and perhaps crucially for the future of free banking, the study will look at the effect on consumers and competition if these type of current accounts became a thing of the past.

“This market study will enable the OFT to consider wider questions about transparency and value in the provision of personal current accounts,” said John Fingleton, chief executive of the OFT.

“This will provide the necessary context for assessing the fairness of unauthorised overdraft and returned item charge before we apply the law in this area.

“Our ultimate objective is a competitive retail banking market in which informed and active consumers drive strong competition and high levels of customer service among banks long-term, with minimum regulatory intervention,” he added.

It is unclear when the study will be completed but its findings could have a profound effect on the banking industry.

Tags: charges.In addition, finance, Banking, law, item charge, overdraft, banking offers customers

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