Christmas borrowers: have a plan for payback

With Christmas nearly upon us, keeping the costs down to a reasonable level is an important part of enjoying the festive season in a way that won’t lead to worry and anxiety in the New Year. If anyone’s plan involves borrowing to meet the costs of Christmas, it’s important they first figure out a realistic repayment plan.

So says Think Money, which has issued a warning for people who are thinking of borrowing to help them meet the costs of Christmas.

It advises them to plan their finances out carefully before they actually borrow any more. Without a good repayment plan in place, they’re running the risk that they won’t be able to repay it as quickly as planned (or, potentially, at all).

As you might expect, this could lead to all kinds of problems, from higher-than-expected interest costs to late payment charges. Depending on the individual’s situation, it could even lead to more serious consequences, such as a CCJ (County Court Judgment).

“[…] some people might be making a New Year’s resolution to get their finances in order,” a spokesperson for the financial services company commented.

“For some, that might involve taking out a debt consolidation loan to simplify their finances and set out a clear plan for repaying their debts. This can be a good way of managing debt, but borrowers still need to make sure their repayments fit in with the rest of their budget.”

Tags: level, year, repayment, County Court Judgment, anxiety, New Year, court, Christmas borrowers

What can a landlord do when a tenant stops paying their rent?

that rental demand has increased by 15%. Despite this increase demand is still outstripping supply and according to their research an average of 5 people are competing for every one property.

With unemployment at around 8% (National Statistics Office, June 2011), banks enforcing strict lending criteria and general economic uncertainty, it is not surprising that demand for rental property is high. First time buyers can no longer benefit from 100% mortgages to purchase their properties, which leaves very little to inspire confidence. Ever-increasing living costs and spiralling inflation are added factors that cannot be ignored either. With new government initiatives only helping a small percentage of first-time buyers it is obvious why so many will have to rent for longer than planned.

This has left landlords with a positive outlook towards their investment properties with many of the cash-rich continuing to grow their portfolios. The demand for landlord insurance has therefore increased in recent years.

However, the life of a landlord is not always as easy as one may think. There are many reasons why problems might occur during a tenancy. One of the most common issues is tenants not paying their rent. Perhaps a perfectly good tenant might have lost their job and is finding it hard to pay the rent or a couple have split up half way through their tenancy agreement. In other circumstances, it’s fair to say that there are some tenants that were always going to be a problem no matter what.

When a tenant stops paying their rent they are not only in breach of their contract but they start to cause the landlord un-needed stress, mainly because chasing rent soon becomes a time-consuming process and the landlord may start to face financial difficulties. If this happens then the landlord should first write to the tenant and ask them to discuss the situation. The landlord should always try and resolve any issue with the tenant amicably, although clearly this isn’t always possible.

In many cases, the landlord may decide to terminate the tenancy agreement altogether. In such a scenario, a notice is served and then the court takes possession and finally ends the contract. This should be a last resort especially in cases where the financial difficulty may be a temporary one, such as the tenant losing a job etc. The landlord should try to offer and accept other modes of payment such as negotiating part payment terms for a temporary period until the tenant is able to find a new job etc. However, there may be cases where the financial situation of a tenant has changed drastically and receiving the arrears for the rent might not seem possible. In such cases, it is best for the landlord to ask a court of law to intervene and re-gain possession of their property so that they can let it out to a new tenant to avoid further losses. Because of the potential issues that may arise it is always advised that a landlord should speak with an insurance brokers about special cover that includes legal expenses and rent guarantee.

Tags: supply, positive outlook, property, court, confidence, small percentage, investment

No luck over challenge for UK retirement age

It has recently been announced that a law that enables employers in the UK to make employees retire at the age of sixty five is to be upheld, at least for the near future. The decision was made by the High Court, and means that workers in the UK may be forced to retire at that age whether they want to or not, and without any sort of payout from the company. Read more

Tags: uk, retirement, finance, Law Crime, court, year, Superannuation in Australia, future

Schools minister angry over uniform issue

The Schools Minister in the UK has expressed concern over parents that are being forced to pay out extortionate prices for school uniforms supplied by certain outfitters, and has said that schools should be taken to court over the issue. Read more

Tags: cartel, Mr Wright, court, arrangements parents, prices parents, common sense, blazer, school uniforms

What does the latest ruling in the High Court test case into bank charges mean?

The presiding judge in the ongoing High Court test case in to banking overdraft charges has recently made an announcement that has pleased the banking industry at a time when many are relieved to finally have some good news. The battle over bank charges began several years ago, when the Office of Fair Trading branded the charges that banks charge when someone goes over their overdraft limit as being unfair and unlawful. Read more

Tags: bank charges, oft, british bankers association, court, ongoing high court, andrew smith, past charges

Many banks get all clear over bank charges

Following recent hearings in the next stage of the overdraft bank charge High Court case, many of the UK’s banks have received a clean bill of health from the presiding judge, who has said that most customers will not be able to use the law to challenge the terms that the banks in question have used. However, he has not given the all clear to Intelligent Finance or NatWest. And is still looking at the terms laid out by these banks. Read more

Tags: overdraft, presiding judge, recent decision, bank charges, question, court, bank, right

Bank charge test case may be dropped

According to a recent report the Office of Fair Trading is considering dropping the test case over bank charges, which was planned for next year.

The test case was designed to make a final determination over bank charges following months of controversy and rows between banks and consumers. The battle started after campaigners and regulators branded the charges, applied for exceeding overdraft limits, bounding cheques, and returned direct debits, unlawful and unfair.

Officials from the Office of Fair Trading have confirmed that there is a chance that the test case will be dropped, but this will only happen if it is in the best interests of the consumer.

Officials stated that they may consider dropping the test case if banks decide to cut their charges to a level that makes them fair to consumers. Lloyds TSB has already cut its charges, but many experts state that it has not cut them enough.

One OFT official stated: “If we do our own financial analysis, and they come in with a number that is lower than our analysis would suggest is an unfair charge, there is no need for the court case to go forward. We will be looking out for what is the best outcome for the consumer.”

However, the banks are arguing that their bank charges have nothing to do with the OFT, and that officials have no power over their bank charges. The OFT is due to review charges to come up with a figure that it believes is fair.

If the test case does go ahead, many experts think that free banking could come to an end in the UK and that banks will start charging monthly fees for having a current account to recoup losses from bank charges.

Tom Smith
16th October 2007

Tags: fair, trading, bank, court, drop, test

Lloyds TSB’s shameful behaviour over bank charge refunds

Lloyds TSB is the only bank so far that has managed to win two cases with regards to the refunding of bank charges – a row that has been going on for many months between consumers and banks.

In most cases banks have paid up, albeit reluctantly, after consumers made a claim for the return of unlawful and unfair banks charges for exceeding their overdraft limits and also for returned cheques and direct debits. However, in two cases the judge ruled in favour of Lloyds TSB in these cases.

However, Lloyds TSB has also been using its own tactics to try and get out of making payment according to a recent report, which has highlighted some of the tricks that the bank has been using in order to avoid having to return customers’ bank charges. The banking giant has issued staff with guidelines on how to deal with claims, after being accused of netting £300 million a year from overcharging customers. The training pack consists of sixteen pages of guidelines, which have been described as dirty tricks by some experts.

Amongst the guidelines issues to staff at Lloyds TSB are to reject first time claims even in cases where the consumer is in the right, not to offer a payout of more than £750 in any claim, and only to offer an immediate settlement to critically ill or dying customers. A special team has had to be set up by the banking giant in order to deal with the flood of claims it has received since the row over bank charges erupted last year.

One staff member dealing with complaints brought the training pack to the attention of a national newspaper, stating: ‘Cynical does not even begin to describe it. I was placed by a recruitment agency, working from 5pm until 1am for about £200 a day to work in this nondescript building on the outskirts of Andover. I was one of about 50 people just dealing with complaints about service charges – we were told the bank was receiving more than 500 a day. This training pack was given to me on my first morning and I was told I had to adhere to it as this was the company policy – no deviating. The booklet was telling us to reject customers asking for refunds, then to palm the more persistent ones off with nuisance money.’

Tom Smith
14th September 2007

Tags: holders, charge, lloyds, customers, bank, court, tsb

Banks have paid out £200 million this year

According to the latest statistics banks in the UK have already paid out over £200 million this year in the form of repaid bank charges to customers that have made claims for any charged imposed over the past six years.

The study shows that over £200 million has been paid out in just the past seven months alone reflecting the financial problems that have resulted for banks as a result of these bank charges.

The report was put together by Credit Suisse, and suggests that around 1% of the profits of the major groups will be lost as a result of repaying these bank charges, which have been dominating the financial headlines in the UK over recent months. In addition to having to repay these charges, which have amounted to thousands of pounds for some customers, banks have also had to take on extra staff to deal with the flood of claims, which has cost even more.

Although banks have been doing their best to get out of having to pay these charges back to customers, they have also been unable to justify the charges to courts and regulatory authorities. Banks have traditionally charged up to around £35 for exceeding an overdraft limit and for returned cheques and direct debits. However, the cost actually incurred by the bank is though to be around £2-£5, which means that the banks have been making hefty profits from the charges.

A decision with regards to bank charges, and what can be classed as a fair fee, is expected at the end of the year. It was expected earlier but was postponed so that further reviews could be carried out following concerns that free banking in the UK could come to an end as a result of these bank charge claims.

Tom Smith
13th September 2007

Tags: charges, reclaim, lost, high, claims, court, bank, fee

Beware the bullying banks

The row over bank charges has been dominating the financial news in the UK over recent months, with thousands of customers attempting to reclaims charges for exceeding the overdraft limit on their bank accounts after UK regulators deemed the fees as unfair and unlawful.

However, although many people have managed to reclaim their money back, going back up to six years, it has not been a smooth or easy process for many, and banks have been using a range of underhand tactics to try and discourage consumers from reclaiming these fees.

A recent study that was conducted by This is Money has shown the extent of the bullying tactics that banks have used to try and stop people from reclaiming their bank charges. According to the study banks have breaching industry guidelines on a frequent basis by threatening thousands of customers with account closure in the event that they make a claim for their charges. Many vulnerable customers are being targeted by some of the leading banks, and these tactics are pushing many into avoiding claiming their charges for fear of losing banking facilities.

The report showed that over one in eight customers that have tried to reclaim their bank charged have been threatened with closure of their accounts, which is in direct breach of industry guidelines in accordance with the Banking Code. A spokesman from the Banking Code Standards Board stated: ‘Banks are allowed to close down accounts for commercial reasons. But they must also treat fairly any customers who are experiencing financial difficulties.’

Experts state that consumers should not let themselves be bullied in this way, and that any threats such as this should be directed to the Financial Ombudsman Service.

Tom Smith
13th September 2007

Tags: fees, bank, interest, claim, charges, bully, stron, court

Yorkshire Bank faces tough decision

The Yorkshire Bank is facing a tough decision over its overdraft charges following an order made by a judge in Hull.

Over 40 cases were due to be heard last month by the judge, and these related to unfair charges that were applied to customers’ accounts as a result of exceeding their overdraft limit and for bounced cheques or returned direct debits. According to campaigners the cost of administration for this type of oversight is between £2 and £5 for the bank, but often customers were being charged up to £40 per fee.

Of the 44 cases that were due to be heard the majority were settled by the bank before being heard in court. However, seven of the cases were heard at Hull County Court with judge Iain Besford residing.

When hearing the cases the judge made a decision that means the bank will either have to settle all of the pending claims in full or will have to attend an open court and explain its charging structure in detail, explaining why customers are charged so much if it is not for profit.

The disclosure order that the judge agreed to means that the bank now has until the end of September to make its decision with regards to whether to settle the claims or whether to justify its charges in court.

Banks do not generally turn up to these court hearings, as most tend to settle the claims just prior to the case being heard in court. Lloyds TSB, however, has won two cases filed against it for repayment of bank charges.

Originally the judge had considered striking out the bank charge cases altogether following a decision by a Birmingham judge to rule in favour of Lloyds TSB earlier this year. However, having heard the cases he has now informed the bank that it must pay up or explain and justify its charges.

Tom Smith
13th July 2007

Tags: county, charges, win, lloyds, bank, hull, yorkshire

Bank charge court claims need to be watertight

Experts have warned that consumers that are trying to reclaim bank charges from their banks through the courts need to make sure that the case they are putting forward is solid and watertight in order to increase their chances of successfully reclaiming back the cash from the bank.

Apparently a number of claimants are failing to provide the right documentation or are failing to put forward their case properly, and this can increase the chances of the judge ruling in the bank’s favour.

Judges are becoming impatient with these cases, as there are many pending and blocking up the court system, and banks fail to turn up to defend themselves, which means that the claimant wins the case by default.

Experts claim that judges are now looking to get rid of what they describe as frivolous claims, and this could affect those that do not put forward a strong enough case or provide the necessary paperwork and documentation to support their claim.

Lloyds TSB has already won two cases, where the judges ruled in the bank’s favour rather than that of the claimant. A judge in Hull has also stated that he may strike out twenty claims against banks. Experts think that all of these lost of struck out cases could be the result of sloppily put together cases and inappropriate or inadequate documentation from the claimant.

Thousands of consumers have been claiming back charges from their banks going back up to six years, and these charges were applied for exceeding the overdraft limit on the account, as well as for returned direct debits and cheques. However, where banks have reduced to repay the full amount many have decided to file a small claim against the bank through the courts.

Tom Smith
30th June 2007

Tags: judge, defend, court, penalties, bank, paperwork, cost, charges, fees

Consider financial ombudsman over bank charges

In the ongoing disputes relating to bank charges Lloyds TSB recently became the first bank to win a court case against a customer that was trying to reclaim bank charges that had been imposed for exceeding the overdraft limit on the account, and for returned cheques and direct debits.

And is seems that this unprecedented case has started to put some consumers off from trying to reclaim charges from their banks. However, experts advise that there is another route available.

This is Money has advised consumers that if they don’t feel confident about taking their bank to court of reclaiming bank charged they can simply go through the Financial Ombudsman Service. This is a free service, so consumers will have nothing to lose by taking their complaints to the ombudsman. And if, at the end of the day, the consumer does not agree with the financial ombudsman’s decision he or she can still take the case to court.

This is Money also warns that this cannot be done the other way around. So if a consumer takes the bank to court, and the judge rules in favour of the bank, the consumer cannot then take the complaint to the financial ombudsman because the judge’s ruling has to be the final one. So, anyone having trouble getting bank charges back from their bank should consider complaining to the FOS before taking the case to court.

Even banks are now using the Lloyds RSB case to try and make consumers feel as though this is a definitive decision, but this is not the case.

One FOS spokesman stated: ‘We are seeing letters from banks suggesting the Birmingham case is definitive. This is usually happening at local branch level. Often when we raise it at a senior level, head office agrees that the letters are wrong and stop any more going out.’

Tom Smith
10th June 2007

Tags: bank, ruling, court, ombudsman, fees, charges

Banks warned by judge over unreasonable behaviour

A judge in the UK has issued a warning to banks in relation to unreasonable behaviour in cases where consumers try to claim back charges that have been deemed unlawful and unfair.

Many consumers in the UK have made claims for bank charges going back up to six years, and although in all cases but one the claims have been successful a number of banks have been acting in a manner deemed unreasonable, using retaliatory measured such as account closures to get back at the consumer.

And another tactic being used by some banks is the pretence that they will be defending claims in court, when in actual fact they have no intention of doing this at all.

It is this tactic that is being objected to by the High Court judge, David Mackie, who claims that the banks are wasting court time and resources with this pretence. He further stated that he was looking into awarding damages against the banks if they continued to do this in instances where a consumer has filed a claim in court.

The London Mercantile Court has had hundreds of these bank charge cases referred through lower courts this year, and the hope is that at some point one of the cases will be heard, producing a test decision.

Judge Mackie stated: “If the banks had won, many fewer customers would have sued. If the banks had lost, the claims would have been much easier to sort out than they are now.”

With banks deciding to settle the claim at the last minute before a case is heard, the likelihood of a test decision is a slim one.

Judge Mackie added: “On the face of things each case raises serious issues which the court would permit to proceed to trial. But this is fantasy because, at least for the moment, we all know that there will be no trial.”

Tom Smith
30th May 2007

Tags: court, reclaim, challenge, account, claim

Keep claiming those bank charges

Customers should continue to trying to claim back unauthorised overdraft charges from their banks despite a recent court ruling.

Birmingham County Court found in favour of Lloyds TSB in a case against Kevin Berwick in which he was trying to claim back £2,545 in charges.

The case does not affect other rulings as County Courts cannot set precedents, however, the fear is that banks will become more confident in turning down people who seek compensation.

Despite this, Which? says that people should not be put off from claiming and should remain confident that they will get some money back.

“This news must not deter people from reclaiming their bank charges,” said Emma Bandey, personal finance campaigner at Which?

“People shouldn’t be scared or worried about continuing with their claim or indeed starting one. We have now had over 387,000 downloads of template letters from the Which? website.

“It’s such a simple process. Keep reclaiming those charges and if you experience any problems, go to the Financial Ombudsman Service,” she added.

Some industry figures have warned that we could be about to see the end of free banking as banks look to recover the money lost through charges.

Tags: business, Bank charge, court, Financial services, Lloyds Banking Group, Economy of the United Kingdom, fear, Business Finance

Bank accused of wasting court’s time

One of the leading UK banks has been accused of wasting time by a judge, and has been ordered to pay the court costs of a woman that sued the bank after trying to reclaim unfair and unlawful charges that the bank had applied to her account for going overdrawn, returned cheques, and unpaid direct debits.

Lloyds TSB will have to pay court costs of £85.41 after the Bristol County Court judge, Andrew Kearney, accused the bank of ‘acting unreasonably’.

The plaintiff, Vivien Lloyd, had tried to reclaim fees that amounted to £655, but wrote to the judge after the bank spent a year wasting time before offering to refund the fees. The judge stated that the bank had no intention of defending its charges in court, and therefore accused the bank of wasting time and ordered it to pay the court costs incurred by the plaintiff.

The plaintiff had initially written to Lloyds TSB in March 2006 to reclaim her charges, many of which had been accrued by her son, Gary.

She stated: “The terrible stress it put me through – it was driving me mad. I’m absolutely ecstatic – it was our living money, our food money.”

She added that the bank had continued to refuse the refund until earlier this year, with just one week to go before the court hearing, at which point Lloyds offered her a full refund of charges. 

A spokesperson for the bank stated:  “We are surprised by this judgement as we firmly believe we have the right to lodge a defense in any legal action brought against us. We have been unable to trace any notification from the court about this application for a further payment of £85 and so did not have an opportunity to challenge it before it was made.”

Tom Smith
4th May 2007

Tags: bank, refund, unfair, claim, legal, court, lloyds, year

Consumers accustomed to taking on debt

Consumers have grown increasingly used to taking on debt in recent years, according to the head of a website which offers advice about individual voluntary arrangements (IVAs).

As the agreements become increasingly popular with borrowers who are struggling to make debt repayments, Phillip Beck of Freeivaadvice.co.uk said: “I think it is a problem that has built up over many years and that is that people have got used to taking on debt.

“The amount of consumer debt in the UK has steadily increased over the years and it is finally getting to the point where people have so much debt which they simply cannot repay.”

However Mr Beck, commenting ahead of new research which will examine the increasing number of county court judgements granted in the UK, also acknowledged that “lax lending policies” by some loan providers and lenders was also part of the problem.

According to the Department of Trade and Industry (DTI) some 12,228 people entered into IVAs with lenders in the third quarter of 2006, an increase of 117.9 per cent on the same period in the previous year.

Tags: individual voluntary arrangements, consumer debt, court, uk, loan, previous year, Freeivaadvice, Department of Trade and Industry