Payday loans becoming more popular what hard up borrowers

In the past many people that were hard up and needed to raise some extra cash opted for a credit card or a loan. However, for many consumers these lines have credit have dried up over recent months, with the global credit crunch resulting in far tighter credit conditions that have left many would be borrowers out in the cold. This means that many have had to seek other ways of raising money, and this is reflected in figures that show an increase in the take up of payday loans. Read more

Tags: payday loans, doorstep lenders, card, credit, doorstep, tighter credit conditions, limit, loan

Barclaycard acting irresponsibly

Credit card provider Barclaycard has been accused of acting irresponsibly after it was found that the financial giant had been contacting customers in order to try and encourage them to take money out on their credit cards. With many consumers strapped for cash in the current financial climate Barclaycard appears to have been taking advantage of the situation by trying to talk its credit card customers to use their cards in order to get their hands on instant cash. Read more

Tags: recent additions, card fraud barclaycard, bad advice, advance, student

Lloyds reductions in charges may not be all that great

Consumers and campaigners were pleased when Lloyds TSB, one of the UK’s major high street banks, recently announced that it was cutting its charges for unauthorized overdraft use, bounced cheques, and returned direct debits.

However, the victor has quickly turned to concern, with campaigners pointing out that under the new charging structure many bank customers could actually find themselves even worse off than they are now.

Lloyds TSB announced that it would be cutting the charges for bounced cheques from £25 to £20. It also announced changes to charges for unauthorized overdraft use. Previously going over the overdraft limit meant a customer would be charged £30 with a maximum of three charges per month. However, this has now been changed to a monthly fee of £15 and then between £6 and £20 per day for a maximum of ten days.

Officials state that this could mean that someone that exceeds their overdraft limit by £100 could clock up £200 in charges. An official from Which? stated: ‘These charges appear excessive. If you go over by £100 in the course of a month you could end up with total fees of up to £200.’ Other major banks have also made changed to their charges following in the footsteps of Lloyds, but is seems that these charge reductions may not be as beneficial as they initially appear.

The Office of Fair Trading has recently announced that if banks do reduce their charges to the satisfaction of the OFT then the test case scheduled for next year may be cancelled. However, this will only happen if the reductions made by the banks are in the consumers’ best interests.

Tom Smith
20th October 2007

Tags: fees, overdraft, Banking, limit, customer, charges, tsb, personal, accounts, lloyds

Tories call for limit as ‘immigrants push up house prices’

The Tories have called for a cap on yearly immigration as it is blamed as one reason for the increase in UK house prices.

Research by property finder.com revealed that one in five people feel that restricting the influx of foreigners to Britain was the best way to bring down inflated prices and demand.

The second biggest cause of higher housing costs was attributed to property investors.

However, chief executive of propertyfinder.com, Warren Bright, expressed concern of the general public’s “poor” understanding of the real causes of the high prices.

Speaking on the subject he said: “10 years of low interest rates have brought about Britain’s high house prices, but this is poorly understood by most people.

“Restrictive planning policy enthusiastically enforced by local councils has severely constrained the ability of developers to provide the number of homes needed by Britain’s rising number of households, and has exacerbated the rise in property values.”

He added that immigrants and property investors could not alone be blamed as they were “too small in number”.

The news comes as Yorkshire Bank research found 43 per cent of Brits considering buying property abroad.

Tags: low interest rates, planning, cause, limit, uk, house prices, property values, Yorkshire Bank research

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: break, limit, car, foreign, accident, alcohol, drink, law

Overdraft warnings will be displayed to HSBC customers

In a recent announcement the HSBC bank has revealed that its customers will now receive a warning if they try and withdraw money from one of its cash machines and the withdrawal could take them over their overdraft limit.

The machines will display the warning to customers that risk going overdrawn as the result of taking out the cash, which will offer additional protection and help to safeguard the customers from being hit by expensive bank charges.

The bank has warned that this facility will only be available to its own customers and not to customers of other banks that are using the cash machines, and this is because the bank has no access to the overdraft details of customers of other banks even if they are using HSBC cash machines. Over 3500 machines will have the facility to display this message, and the scheme is due to come into force at the beginning of October.

Although the precise wording that will appear to customers has not yet been confirmed HSBC officials state that this will help to make its charges more transparent and help customers to avoid having to pay the charged at all by enabling them to stay within their limits. The bank has also stated that if unauthorised borrowing amounts to under £10 per day no charge will be made. This will also be the case if money is paid back into the account by the end of the day to cover the amount of the money withdrawn or if the customer has not exceeded his or her limit in the past six months prior to going over the limit.

One HSBC official stated: “More than 95% of HSBC cash withdrawals are now made at ATMs and while you can already check your account balance before you make a withdrawal, few people do. We believe that alerting customers at this point will enable them to make an informed choice about whether to proceed.”

Tom Smith
20th September 2007

Tags: hsbc, cost, warnings, limit, savings, account, overdraft

Happy couples warned over insurance

People in the UK are being urged to check their wedding insurance, as gifts they received on their happy day may not be covered after the cover period expires.

According to research by Abbey, 13 per cent of home contents insurance policies will not cover the value of wedding gifts temporarily.

And even if they do, this cover tends to only last a month – so the 28,000 happy couples married last month may need to move fast to ensure they are covered.

The report also revealed that many insurers limit their wedding cover. So, with the average amount spent on a present at £43, inviting more people could mean the limit is quickly exceeded.

“Sadly the amount of cover is often not enough to cover the number of gifts received by couples, and it only lasts for a month on average, potentially leaving newlyweds underinsured,” said Prasad Shastri from Abbey.

According to the study, newlyweds with temporary insurance of up to £1,000 would hit their limit after receiving gifts from on average 23 guests.

Tags: number, cent, limit, home contents insurance, amount, period, insurance policy, value

Drivers swapping points to avoid ban

British motorists are prepared to go to extreme lengths in order to avoid the possibility of losing their licence and paying higher car insurance premiums.

With more and more speed cameras cropping up across the UK, drivers are willingly swapping penalty points with their loved ones to avoid having ‘too many’ on one licence.

Insurance firm Churchill has found that 495,000 people have swapped points in the past and a further 9.5 million (29 per cent) would be prepared to do so.

Aside from having to pay increased car insurance premiums, most drivers admitted that they simply could not bear for their loved one to lose his or her licence.

The reasons for this vary, with 21 per cent claiming it would prevent their partner from working, nine per cent saying it would make getting the children to school too difficult and ten per cent not wanting to be the only driver in the house.

Most of the drivers questioned said that they were aware that swapping points is illegal but nine per cent think that it is acceptable.

“This research shows the lengths that some drivers will go to in order to stay on the roads despite committing driving offences such as speeding,” said Frances Browning from Churchill.

“Trying to escape convictions by swapping points with another person is highly illegal and can lead to prosecution. The way to avoid a speeding ban in the first place is simple – drive responsibly.”

Churchill has given its support to government proposals which would see driving convictions graduated, meaning someone who drives only a little over the speed limit receives fewer points than someone who drives well over the limit.

Tags: uk, 5 million, government, drivers, churchill, limit, car insurance premiums, uk drivers

Consumer pressure mounts for bank fee refunds

The consumer campaign to reclaim the fees banks charge when a cheque bounces or customers exceed their overdraft limit was given fresh impetus this week when barrister Tom Brennan took his bank, NatWest, to court.

Mr Brennan, who is 30 and newly qualified, has said he would be putting his personal finances on the line by suing NatWest for alleged injustice, abuse of power and unlawful conduct.

His case is in its early stages as he seeks permission from the City of London County Court to sue the bank.

But it could become an important test-case for other consumers as well as improving awareness of the issue.

Mr Brennan’s case rests on his claim that the charges are “unfair because they do not reflect the actual loss to the defendant”.

To charge a customer £38 when a payment bounces is, he argues, “egregiously invidious” because it is disproportionate to the administrative cost to the bank.

Millions of people have now written to their banks to demand that penalty charges be refunded immediately.

Tags: fees banks, alleged injustice, Business Finance, cheque, case, Law Crime

New phone-driving laws

New laws concerning the use of handheld mobile phones while driving have come into force today (February 27th).

Stricter punishments will be dished out to those who are caught breaking the law as research shows that using a phone while behind the wheel greatly affects reaction times.

Previously an offender would have been hit with a £30 fine but now police will issue a £60 fine and three points on the lawbreaker’s licence.

The tougher penalties have received widespread support from most motoring bodies, with a wealth of research showing that using a handheld phone while driving is dangerous.

“Mobile phones are probably the biggest distraction, with research evidence suggesting that holding a conversation on the phone leads to drivers having similar reaction times to someone twice over the UK drink-drive limit,” said Andy Price from Zurich Risk Services.

“At 40mph, a concentrating driver will travel 13.3 metres before activating the brakes in the event of an emergency.

“A driver at the UK drink-drive limit will travel 20 metres and the sober, hands-free phone user will travel 22.3 metres before activating the brakes,” he added.

The introduction of the stiffer penalties is likely to lead to an increase in car insurance premiums for some drivers.

With an offender being hit with three points on his or her licence, it is extremely likely that insurers will bump up premiums for those caught using a phone behind the wheel.

Tags: Stricter, New phone-driving laws, Andy Price, February, concentrating driver

Surprise interest rate rise

The Bank of England has stunned economists by raising the interest rate to its highest level for six years.

In the build up to the decision being announced, it was considered by almost everyone in the industry that the rate would be held.

However, on Thursday January 11th, it was announced that the interest rate would rise by 0.25 per cent, taking it to 5.25 per cent.

It is the third time since August that the Bank of England has increased the rate by 0.25 per cent and is bad news for people with mortgages.

“This is another rise in a short period of time that could hit some homeowners hard,” said Peter Tutton from Citizens Advice.

“We are already seeing a rapidly growing number of people falling behind with mortgage payments and in some cases threatened with repossession, and we know some people are taking on mortgages that stretch them to the absolute limit.

“Any increase in mortgage interest rates could spell disaster for people whose finances are balanced on the very edge of affordability,” he added.

The rate rise is good news for savers however, although the uncertainty created by today’s announcement is unstabling for most people.

“Markets are going to be wondering if this marks a more intensive process of monetary tightening,” Peter Dixon, economist at Commerzbank, told Reuters.

“Is the bank going to raise again? That’s the question that is going to be ringing round the dealing rooms this afternoon.”

Tags: highest level, advice, economists, Federal Reserve System, absolute limit, homeowners, limit, today's announcement