Gas bills could rise by £400 a year

According to a recent report the cost of energy could soar by a massive amount, which could add around £400 on the average annual gas bill, which will add further strain to household finances. It is thought that bills could rise by as much as 40%, with a further round of price hikes due to take place in the autumn. Energy suppliers have already increased prices once this year, with pretty hefty increases that were brought in at the beginning of the year. Read more

Tags: massive amount, commission, energy companies, advisors, slump gas bills, bank insurance firms, total income

Competition Commission still investigating PPI

The controversy over payment protection insurance has been going on for some time now, and regulators have been investigating the problems surrounding the sale of PPI after it was found that many consumers were being mis-sold this insurance, and that in some cases the cost of PPI was higher than the interest costs on a loan.

The Competition Commission has stated that its investigation into PPI is still ongoing as no conclusions have yet been reached.

The Competition Commission has stated that the issues that are being considered are complex and therefore more time and consideration is required. The Competition Commission plans to publish its provisional findings in May of next year. The chairman of the inquiry stated that the Competition Commission had already reviewed a substantial amount of evidence, but added that there were areas that needed to be looked into further.

The chairman stated: “We are far from making up our minds. But we are focussing on the amount of competition for PPI that distributors face at the retail level.”

He added that the Competition Commission was aiming to complete the inquiry as soon as possible but had to take into consideration areas that needed to be looked at further. He said: “…we are also conscious that the issues we are deciding upon are by no means simple and it is vital that we carry out our work thoroughly, ensuring that all parties receive a fair hearing.”

A number of issues relating to PPI are being looked into by the Competition Commission. This form of cover is designed to protect against falling behind on repayments on loans, credit cards, and other forms of finance.

Alan Wright
13th November 2007

Tags: Mortgages, cards, Loans, commission, Insurance, protection, payment, ppi

Capital One agrees to PPI fine

credit card company Capital One has agreed to pay a fine to the Financial Services Authority (FSA) over its sale of payment protection insurance (PPI).

The firm has reached a settlement with the authority following its investigation into the whole PPI market.

Capital One says that it has been working proactively with the FSA to ensure that its sales and administration in relation to PPI is brought up to standard.

The card company admits that there were problems in the past but says that it has now rectified these and was able to reach a settlement with the FSA because of the work it had put into addressing the authority’s concerns.

“Capital One values its relationship with its four million customers,” said Sanjiv Yajnik, chief executive officer at Capital One.

“We consistently review our policies and practices and had made a number of significant improvements prior to the FSA’s investigation.

“The FSA has recognised that Capital One co-operated fully throughout the investigation,” he added.

The firm agreed to a fine of £175,000 and it follows the announcement by the Office of Fair Trading earlier this month that the PPI market will be referred to the Competition Commission for further investigation.

If you are considering taking out PPI on any money you are borrowing it is worth while shopping around for the best deal that suits your needs.

Tags: authority, fair, ppi market, commission, executive, relation, proactively

PPI market faces scrutiny

The Office of Fair Trading (OFT) has decided to refer the UK payment protection insurance (PPI) market to the Competition Commission (CC).

A public consultation was held following an original proposition by the OFT for the referral back in October.

Businesses, consumer organisations and trade associations were asked to give their views on the market and the responses confirmed the OFT’s prior concerns.

“Our examination of the evidence presented to date gives us reasonable grounds to suspect that there are features of this market which restrict competition to the detriment of consumers,” said John Fingleton, chief executive of the OFT.

“Despite some evidence of a degree of consumer satisfaction with aspects of the product, the evidence as a whole suggests consumers get a poor deal.”

The organisation says that the CC can now carry out a thorough investigation of the market, offering the chance for a solution to be reached.

The Financial Services Authority is currently working to remedy some of the problems present in the market in terms of selling practices. However, the OFT feels that this alone will not fix the current problems.

Those of you considering a loan may find that you are better off getting PPI, but should shop around for the best deal.

Tags: evidence, detriment, consumers, commission, consumer, public consultation, trading, United Kingdom

Home credit lenders must make it easier to compare deals

Home credit lenders have recently been targeted by the Competition Commission in the UK, and the industry has been told that it needs to make things easier for consumers in the UK when it comes to comparing deals and repayments on finance offered by home credit companies. The commission also added that the industry needed to ensure that consumers that repaid the loan earlier than arranged received some form of rebate. However, the commission has decided not to enforce a price cap, as officials state that this could hit some consumers hard.

Research showed that the average sum borrowed by UK consumers in the form of home credit was £300, with loans starting from around £100. The home credit industry has nearly two and a half million customers in the UK, and the majority of these borrow under five hundred pounds in the form of home credit. The Competition Commission, however, has decided not to place any price cap as more vulnerable consumers that may need more could otherwise find themselves in difficulties.

After it came to light that a small number of home credit companies were controlling the market when it came to this type of finance, the commission was said to be ‘opening the market’ when it came to home credit. The commission is in the stages of doing this, and has stated that lenders in this industry will need to publish their data on a website, so that consumers can then easily compare terms and costs in order to get the best deals.

With regards to its decision not to enforce price caps, the chairman of the commission said that he thought that capping might have “…reduced the availability of home credit to the most vulnerable customers, specifically those with no access to alternative sources of credit. We also felt that price caps could prove to be extremely difficult to apply and enforce in this industry.”

Tags: competition, deals, commission, comparison, credit, uk, loan, cards, offers

Treasury Announces Investigation Of Travel Insurance Mis-Selling

By and large, Brits are a conservative consumer group.  As such, millions of us will gladly pay a relatively small premium to take-out a travel insurance policy before we go away on our holidays.  If you happen to have been one of the millions of Britons who have also experienced the reality of trying to claim on a travel insurance policy, only to find the insurance company worm its way out of the deal under one of the many exemptions, then you may well be delighted to hear that the Treasury has announced that it going to commence an investigation into the manner in which travel insurance is sold in the UK. 

Annually, we Brits spend over £1 billion a year on travel insurance premiums.  We do it because we believe we will be covered for almost all eventualities should something go wrong – either prior to the holiday itself or while on holiday.  In many cases, however, the harsh reality is that the numerous “get out” clauses that travel insurance policies customarily contain means the reality of being refunded, or even being compensated, for an event we thought was covered in our travel insurance is a far cry from what we may have been lead to understand when being sold the policy in the first place.

As such, of particular interest to the Treasury’s investigation will be the old gripe of whether or not travel insurances that are sold as part of a “holiday package” are being mis-sold.  While standalone insurance policies are regulated by the Financial Services Authority (FSA), travel insurance that is sold as part of a holiday package is not. 

Commenting on the current practice of possibly mis-selling travel insurance as part of a travel package, Economic Secretary Ed Balls said, “We need to find out whether travel insurance sold with a holiday is being mis-sold and if we need to educate consumers to consider the cover they want and ensure they are properly informed.”  This comes after Balls discovered that almost half of the UK’s 20 million annual travel insurance policies don’t cover terrorist attacks.

Although travel insurance policies sold by travel firms are not currently regulated, meaning that aggrieved policyholders have little or no right of redress against the travel firm, the announced forthcoming investigation by the Treasury may be just the wake-up call the industry needs to get its house in order or follow the fate of other financial service providers whose practices and activities have recently been curtailed following high profile investigations.

Tags: travel, misselling, cost, fsa, uk, Insurance, premium, commission