Check your credit profile to stamp out fraud, urges expert

With a recent report finding that account fraud is on the up, a financial expert has urged consumers to regularly check their credit profiles to help stamp out the crime.

David Kuo, head of personal finance at Fool.co.uk, said that current financial conditions are pushing people to extreme lengths to get hold of credit, but that consumers can protect themselves by checking their credit profiles to make sure that fraudulent activity is not taking place.

According to research by the UK’s fraud prevention service CIFAS, the number of instances of facility takeover, or account takeover, increased by 146 per cent in the first three months of 2008 when compared with the same period last year.

“If you are a consumer and you haven’t recently checked your credit reference, go and have a look at it just to make sure there is not anyone out there making fraudulent applications on your behalf,” Mr Kuo advised.

Tags: service, David Kuo, UK's fraud prevention, law, Instances, Cifas

Calculis: “No such thing as common law marriage”

Calculis, the independent financial advisory, has said today that the idea of a common law marriage is a myth as it is not legally recognised, as many people believe.

Director of Calculis Alex Pegley said that many people who live together think they have the same rights as a married couple but don’t realise they could be subject to things such as inheritance tax.

According to Advicenow, most people think that they become law husband and wife with the same rights as a married couple after they have been living together for a few years.

However, in reality such couples have hardly any rights compared with married or civil partners but they often only find out this is the case when they separate or when one partner dies.

To avoid being stung by inheritance tax, Mr Pegly advises couple to talk to a financial advisor, saying: “It doesn’t have to mean giving assets away; have a chat see what you can do without losing access to your capital.”

Tags: law husband, director, alex, Mr Pegly, law, Marriage, Relationships, husband and wife

Rearranging assets can “obviate inheritance tax”

Speaking to a financial advisor and rearranging assets can help minimise the amount of inheritance tax families will have to pay, the independent financial advisory Calculis has said.

There are uncomplicated ways of planning finances, such as placing funds into a trust, allowing consumers to still derive an income from the money, according to the company.

Calculis director Alex Pegley says: “There are various trusts that can be used – one can invest in qualifying investments that you hold personally but after two years are not susceptible to inheritance tax.”

People should be aware that not everyone must pay inheritance tax after the death of their partner. It only applies if the estate is above the £312,000 nil rate band and it does not affect people who receive it from their wife, husband or civil partner if they are both domiciled in the UK.

Only in the event of the estate being worth more than this is are the assets taxable if one partner dies.

Tags: law, band, Civil partnership in the United Kingdom, asset, Trust, Taxation in the United Kingdom, GBP, trusts

More savers in the north and spenders in the south

More consumers in the south were in the mood to spend than those in the north, reveals the findings from a new financial study.

Research from Legal & General showed that 31 per cent of Londoners quizzed were up for spending their money compared with only 21 per cent of those in the north.

However, 70 per cent of northerners were concerned about putting money away to save with while this appealed to just 57 of London-based respondents.

Julia Clayworth, Legal & General’s Wealth Management head of marketing, said: “Whilst the overall spending and savings patterns havent changed dramatically this month, what we have noticed is a growing regional difference in spending and savings habits.”

Meanwhile, when questioned about their ability to meet monthly bills, nearly one in five people from the north claimed to be spending more on paying bills and debts than they earned.

Recent research from Legal & General showed that in January, there was a split in spending habits between those in their 20s and those over-45.

The older generation were in less of a mood to spend than their younger counterparts.

Tags: london, consumers, quizzed, law, Julia Clayworth, respondents, research, regional difference

Growth in the use of equity release in the UK is “only a matter of time”

Increasing numbers of consumers are expected to use equity release over the next few years, one financial expert has claimed.

According to the Safe Home Income Plans (SHIP), the increased use of equity release is only a matter of time, given the extent to which consumers have preferred property over pensions as a method of saving for retirement over many years.

The SHIP added that the quality and standards of equity release schemes have improved over a similar time scale has meant more savers are comfortable using the schemes.

Andrea Rozario, director general of SHIP, said that declining levels of private pension provision and smaller state pension benefits will drive more people in this country to explore alternative ways to top up their income in later life.

She added: “Some will work longer, but a very large number are already planning to use the value in their property.”

Last week, a report from the Council of Mortgage Lenders called for the government to do more to encourage the take up of equity release schemes after it noted the relatively slow use of them compared with the Australian and US markets.

Tags: pensions, Australia, time scale, home, SHIP

Using life insurance to pay inheritance tax is too expensive

Attempting to use life insurance to cover inheritance tax (IHT) bills is risky and expensive, according to financial experts.

Calculis said that the type of IHT the company offers is all about preserving an estate while, with life insurance, a premium is paid to take advantage of benefits.

Alex Pegley, director for Calculis, said: “If you can, through the use of trusts and specific types of investments actually reduce the inheritance tax bill, why use life insurance?

He added: “I don’t like life insurance for inheritance tax planning; it’s just pouring money down the drain.”

Mr Pegley also stated that the “nature of life insurance contracts” is that as one gets older and closer to needing to claim on them, the premiums go up.

Inheritance tax is paid on death at 40 per cent on all individual estates worth more than £300,000.

On 9 October 2007 the Chancellor of the Exchequer Alistair Darling raised the tax-free threshold to £600,000 for spouses and civil partners.

Tags: law, IHT, company, Insurance, finance

Divorcing couples need a ‘clean, simple solution’

Couples going through a divorce should list their combined assets and agree on how to split them to ease problems and conflict, say leading financial advisers.

Lowland Financial said couples should look for the most straightforward way of splitting assets in order to “find a clean, simple solution”.

Graeme Mitchell, managing director of Lowland Financial, said: “An awful lot depends on how they [people] react – often what you find is when people first part, they say: ‘We’re going to try to deal with this amicably’. Then as time goes on they get more and more bitter and twisted.”

He said that couples should start by listing all their assets which were already in place, then those which were accumulated while they were together.

According to the most recent government statistics, the UK’s divorce rate was 12.2 divorces per 1,000 marriages in 2006 following two consecutive years of falls.

The divorce rate is now at its lowest level since 1984.

Tags: Social Issues, place, United Kingdom, law, lot, couples, Lowland

Stay within drink drive limit when on holiday

Every year many Brits head off on their holidays, with a large number of singles, couples, and groups heading to lively destination where they plan to drink themselves into oblivion.

However, anyone that is planning a drink fuelled holiday should bear in mind that even if they have travel insurance cover they may have their claim invalidated in the event that they suffer an injury as a result of being intoxicated.

Most insurance companies that offer travel insurance already have this stipulation in place, where if the accident is found to be the result of intoxication the claim could well be invalidated. American Express insurance is taking it one step further, and has stated that they will conduct an ‘acid test’ in cases where claimants have been injured on a drink fuelled holiday.

These regulations do not mean that holidaymakers cannot drink at all, but in order for the claim to be valid injured parties must prove that they are within the drink drive limits that apply in that particular destination, even if they are not actually driving. Officials from American Express Insurance services have warned that holidaymakers need to ensure that they look after themselves and do not drink to excess when they go away, otherwise it could end up costing them dearly.

Having travel insurance in place when you travel abroad is vital, as the cost of treatment and emergencies can prove extremely costly. However, if you take out insurance and then drink to excess you could risk having to shell out thousands of pounds anyway as the result of being injured whilst under the influence.

Tom Smith
21st September 2007

Tags: foreign, law, drink, travel, holiday, Insurance, limit, break, car, alcohol

Graduate mortgage lenders run risk, IFA says

Those lenders who allow recent graduates to take out mortgages with them do so at their own risk, Balmoral Associates said today.

The independent financial advisor said that the mortgages, which typically lend at five to six times salary under the assumption that wages will increase over the years, were not “very common”.

Director at Balmoral Associates Paul Monk also took care to distinguish them from 100 and 110 per cent mortgages, saying that the graduate loans were aimed at those who had read a “professional course like medicine or law” and whose “salary is going to increase dramatically over a short space of time”.

Given that a proportion of graduates will remain on similar wages after some years, however, Mr Monk added that “the lender’s taking a big risk” in offering the service.

“The lender’s banking on the fact that because of the sort of job you’re in that that is automatically going to happen but it’s not always the case,” he added.

Mr Monk also commented on the recent US sub-prime mortgage crisis, saying that the UK market might “tighten up” on lending, with recent graduates among the first to feel the squeeze.

Tags: law, market, United Kingdom, salary, medicine, service."The lender banking, recent graduates

Govt still committed to Hips

The government remains committed to the introduction of Home Information Packs (Hips) in August.

Secretary of state for communities and local government Ruth Kelly has reassured homeowners that the government has no plans to back out at this late stage.

Hips will be mandatory in the sale of any house with four or more bedrooms from August 1st, with a view to a wider roll-out in the future.

Some concern had been raised that Hips would be completely scrapped following a humiliating government u-turn over whether they should be introduced to all home sales.

It was eventually announced that Hips would only apply to homes with four or more bedrooms but Ms Kelly has now offered some more details on how the packs will be phased into the entire property market.

She outlined how many energy assessors will be needed for the phased introduction and homeowners are being offered financial incentives to get a Hip before the August 1st deadline.

The reassurances from Ms Kelly have been welcomed by the Association of Home Information Pack Providers (Ahipp).

“Ruth Kelly has today provided much needed clarity for consumers, the Hip industry and energy assessors and she has reaffirmed the government’s commitment to the future of Hips,” said Ahipp director general Mike Ockenden.

“We now call upon all industries that touch the home buying and selling process to get behind the implementation of Hips, in order to deliver the benefits to home sellers and buyers.”

Tags: law, phased introduction, packs, energy, hips, future, Home Information Pack

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: item charge, Fair Trading, finance, overdraft, Banking

How Are Car Insurance Premiums Calculated?

At times trying to determine how car insurance companies calculate your car insurance premiums can seem nonsensical – after all, phone 3 different car insurance companies and they’ll give you 3 different quotes for agreeing to insure your car! So, if you have ever wondered how the premiums on your car are calculated, wonder no more! Read more

Tags: car insurance, law, phone, Gender, car insurance premiums, how to calculate insurance

Law firms hired to retrieve bank charges

Many consumers are turning to ‘no win, no fee’ legal firms to help them claim back unfair penalty charges from their banks.

As more and more people put pressure on their bank to refund the charges, some people are turning to lawyers because they apparently lack the confidence or time to deal with the situation themselves.

The downside of this is that the typical legal firm is taking around 25 per cent of the money which is refunded, reports the BBC.

The firms claim that they are providing a service to consumers, despite the fact that information on how to make a successful claim is freely available.

“If you are confident and have that kind of personality, then you can win it back yourself,” said Philip MacDonald from Phoenix Financial Recovery.

“However we think there’s a reasonable niche market of people who don’t want to have to issue a court summons or deal with it, and would rather have someone to hold their hand through the process.”

Despite Mr MacDonald’s claims, many industry figures say that there is simply no need for people to give away a quarter of their winnings to a law firm.

“There’s no reason to use a claim handling firm for bank charges,” said a spokeswoman for Which?

“They have no extra powers or persuasive abilities and we’ve heard of some firms taking between 20 per cent and 40 per cent as fees.”

Tags: industry figures, penalty charges, services, hand, Business Finance

Car Insurance FAQ

• Is it legal to drive without car insurance?
• What is an excess?
• What is a compulsory excess?
• What is a voluntary excess?
• What is a fault claim?
• What is no claims discount?
• What is protected no claims discount?
• What is a high risk group?

Is it legal to drive without car insurance?

No. Accidents do happen, and the law states that you must be able to compensate any person you injure or any damage you may cause. The cheapest form of car insurance is third party , which only covers any damage that you may cause. the most popular policy sold in the UK would be comprehensive cover , which will cover you for any damage to your own vehicle as well as anyone else.

What is an excess?

An excess is the cost you will have to pay if you make a claim to your insurance company. A common amount for an excess charge would be around £100. However, if the claim was due to an accident which was not your fault then you may be able to claim this excess back. You will however have to pay the excess then try to claim the money back afterwards.

What is a compulsory excess?

Some insurers may only insure you if you agree to drivers if they agree to a compulsory excess charge. This will usually be around £100 and is aimed at giving you a cheaper quote.

What is a voluntary excess?

A voluntary excess is aimed at what insurance companies deem as higher risk drivers. drivers between the ages of 17 – 21 are generally seen to be the highest risk group and some insurers will only consider insuring people from this group if they agree to pay a larger excess fee which could be anything from £250 to £1000.

What is a fault claim?

A fault claim is an insurance company’s way of saying that they can’t recover their costs of any claim that you make. This may be because you are at fault for an accident claim or maybe the person at fault is untraceable.

What is no claims discount?

No Claims discount ( NCD) is a discount added to your policy for each year you do not make a claim. This can increase to a maximum discount of 60% for 5 years without claims. If you change insurance suppliers then you can take this no claims discount with you.

What is protected no claims discount?

If you do make a fault claim then you will be penalized when you attempt to renew your policy by a loss in your no claims discount. Protected no claims discount will allow you to make claims to your policy without losing any discount. Usually you will be able to make on average 2 claims in any 5 year period.

What is a high risk group?

A high risk group is a section of the population that insurance companies will feel are most likely to make a claim due to statistics. If the insurance company puts you in this section then you will have to pay higher than average premiums and excesses. examples of high risk groups would be males aged 17 – 21, drivers with 6 or more penalty points or drivers who have made many claims.

Tags: higher risk drivers, no claims discount, Pound sterling, car insurance faq, insurance policy, larger excess fee

Internet card fraud is down

Internet card fraud fell during the Christmas period, despite a huge increase in the number of online transactions.

Figures from internet fraud-prevention specialists Early Warning show that although shopping on the net increased by 40 per cent, fraud fell.

The data has caused widespread surprise in the industry as many figures expected to see online credit card fraud increase with the number of internet shoppers.

“This is really an unexpected and encouraging first in internet fraud statistics,” said Andrew Goodwill, managing director at Early Warning.

“As e-commerce goes on rising, we are used to corresponding increases in fraudsters’ activities to capitalise on it.”

Mr Goodwill went on to say that he believes increased awareness among consumers about the dangers and safety measures associated with the internet had been a big contributing factor.

“I am encouraged by these figures and hope this is not just a blip but the start of a downward trend for internet card fraud,” he added.

Tags: online transactions.Figures, cent, Deception, law, Early Warning."As, Technology Internet