Consumers warned over door to door energy sales people

Consumers are being warned to watch out for door to door sales people that call around trying to get them to switch their gas and electricity suppliers. Read more

Tags: energy prices, energy supplier, cheaper deal online, research, door sales technique, Technology Internet, comparison

Campaigners do not think price comparison sites will necessarily mean the best credit card deal

According to some officials from a consumer campaign group sing a price comparison site to try and get the best deal on a credit card will not necessarily prove effective. More and more price  comparison sites have sprung up over the past couple of years, and many people use these to try and get the best deals on credit cards as well as on other products and services such as loans, mortgages, insurance, utilities, and more. However, officials have said that these sites will not necessarily mean that you are getting the best deal. Read more

Tags: couple, Credit Cards, Business Finance, comparison, research, consumer campaign, business

People ‘to spend less on insurance’

Consumers are hoping to reduce their spending on insurance products, research suggests.

Among consumers who buy insurance through price comparison sites, 26 per cent are looking to reduce their insurance spending, according to the survey commissioned by business advisory firm Deloitte.

One-fifth of those who hope to reduce their spending on insurance aim to cut their payments on payment protection insurance (PPI), which provides coverage if the borrower is unable to make repayments on products like loans, mortgages and credit cards in the event of ill-health, unemployment or death.

David Rush, insurance partner at Deloitte, said: “At a time when households have less disposable income, it is understandable that many will look at how they can reduce their spending.

“However, consumers should think carefully about which types of insurance they most need in a down-turn.”

Mr Rush suggested that people are most likely to need PPI cover if the economy enters a difficult period.

In related news, Sainsbury’s Bank has suggested that consumers should check with their car insurance provider before they drive abroad to ensure that they are fully covered.

Tags: need, comparison, period.In related news, One-fifth, insurance aim, car insurance, credit, Credit Cards

Lenders urged to tighten checks

Although consumers need to take responsibility for their borrowing, lenders must tighten their credit checking measures, an expert has urged.

Simeon Linstead, head of personal finance at price comparison website uSwitch.com, made his comments following research which showed 84 per cent of people who successfully applied for credit cards over the last 12 months did not have to provide proof of income.

This means 4.8 million people did not have to prove the details they gave in their forms, while 14 per cent of successful applicants claim they were not asked about their income and outgoings at all.

Mr Linstead remarked: “It is too early to say if the amendments to the Banking Code are resolving these problems but there is clearly an urgent need for watertight measures to be put in place to ensure that the banks are lending responsibly.”

At the end of March, various amendments were made to the Banking Code, designed to ensure new commitments to responsible lending are made by credit providers.

Tags: comparison, Banking, amendments, need, credit checking

British turning to overpriced “payday loans,” says expert

British consumers are increasingly turning to “payday loan” providers, which offer loans at annual percentage rates (APRs) of up to 1,355.

The loans, which are popular in the US, pay customers up to £750 into their bank account with an agreement to repay the loan at the end of the month when their paycheque arrives, according to a financial expert at fool.co.uk.

However, they typically charge £25 for every £100 borrowed, rising to £31.25 if the customer fails to pay it back on payday and can reach £1,400 if a borrower does not make any payments for a year, claims the website.

“These truly ugly loans are overpriced, overused and over here. Brits are falling victim to this form of borrowing when they should be fleeing from it,” Laura Starkey, a financial expert at price comparison site fool.co.uk, told the Independent.

To survive the credit crunch icWales.co.uk advises people to cut down on car journeys to save petrol, switch their utilities supplier and change credit cards to get the most competitive rates.

Tags: comparison, To survive, price, Credit Cards, utilities supplier, credit, Payday, Credit card

Personal loan costs on the up

The worsening credit crisis is pushing up the cost of taking out a ce.co.uk/loans/” target=”_self”>loan, despite cuts in the Bank of England base rate.

Moneyfacts, a financial data provider, claims that the average rate on a three year £5,000 unsecured personal loan has risen by 1.7 per cent in the past year, adding an extra £300 to the bill.

Nearly a third of personal loans taken out in the past year were for debt consolidation. A quarter of those borrowers ran into further debt, and 85 per cent of all those taking out loans were not asked to pay off existing debts by their lenders.

Worryingly, 70 per cent of loan applicants were not asked for proof of income, according to price comparison service uSwitch.com.

Mike Naylor of uSwitch.com commented: “With more than 7,716 loan repayments being missed every day and record write-offs, you might think that lenders had learnt their lesson.”

Figures released by the Bank of England last week showed that new consumer credit rose by £2.4 billion in February, compared to an increase £900 million in January.

Tags: cent, February, crisis, credit, finance

Credit card companies ‘exploit customers’

Many credit card providers are using the order of repayment to make extra money out of the customer, new research has found.

When users are paying off debt in small repayments, card companies are directing the money to paying off the cheapest debt first meaning that they can continue to collect money on debts with high interest rates, according to MoneyExpert.com.

The website claims over three quarters of credit card companies employ this tactic which can significantly “sting” a customer who is generally unaware of the order of payments rules.

It found that 76 per cent of credit cards clear cash withdrawals debts last, and with average interest rates at 23.96 per cent on them, it can prove unnecessarily expensive for customers.

Chief executive of the company, Sean Gardner, advised: “As with all credit card deals you need to check that the card you’re using is suited to your requirements.

“If you do want to use your card for cash withdrawals or purchases there are some cards that’ll help you pay those off first to help you avoid prolonging the interest incurred. But those are few and far between.”

Further information about finding the right credit card provider can be found on market comparison sites such as nationsfinance.co.uk.

Tags: comparison, Moneyexpert, Credit Cards, credit card providers, company, debts, business, credit

Abbey first time buyers turn to family

First-time buyers (FTBs) are increasingly turning to brokers rather than friends and family for mortgage advice, Abbey said today.

According to research from the lender released today, 23 per cent of homeowners consulted those close to them while buying their first home – compared with 13 per cent who asked a broker for advice.

However, 28 per cent of the first-time buyers of today – those in the 25-34 age group – said that they used a broker: the largest proportion across the demographics. This could signify an increasing dependence on professional rather than personal mortgage advice.

By way of comparison, just two per cent of OAPs consulted a broker over their first property purchase.

Managing director at Abbey Ricky Okey said that the research was “promising”, because it showed “a shifting attitude of young first-time buyers who are waking up to the benefits of seeking advice from intermediaries.

“Brokers can build on this changing attitude to become a positive driving force in the first-time buyer market.”

Tags: comparison, demographics, Driving, today, driving force, young first-time buyers, advice

Direct Line launches campaign against price comparison services

One of the UK’s best known car insurance companies, Direct Line Insurance, has launched a campaign against price comparison websites that help consumers to find that they claim is the cheapest insurance for their needs.

Price comparison websites require consumers to input a number of details, and then use these details to find the cheapest deal on car insurance cover. However, this is only from their database of insurers and not from every major insurance company in the UK.

According to research carried out by Direct Line over 40 percent of consumers that had used price comparison services to find cheaper vehicle insurance had thought that all major insurance companies would be included in the search.

The research also goes on to indicate that over 90 percent of those that have bought their vehicle insurance cover through a price comparison site feel that there should be some sort of warning so that consumers know right away that not all insurance companies are part of the database.

The Royal Bank of Scotland owns Direct Line, as well as Churchill and Privilege, and will not provide any quotes for customers through price comparison websites. An advertising campaign has now been launched by Direct Line to make consumers aware that price comparison sites do not represent all leading insurance companies in the UK.

One Direct Line spokesperson stated: ‘Consumers are confused about price comparison websites and our research shows many believe they provide an independent, public service designed to ensure consumers get the best deal on their insurance. Unfortunately this is not the case, as these websites are really just on-line middlemen who make money out of commissions on insurance sales, just like a traditional high street broker.’

Tom Smith
1st July 2007

Tags: quotes, all, Insurance, car, home, compare, comparison, consumers, prices

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: offers, lenders, compare, cards, competition, comparison, uk, loan, credit