Advantages of currency exchange risk management for businesses

In every area of business, there are risks and variables you simply can’t control, but you still take measures to mitigate and protect against those risks, such as a health and safety policy or insurance. While it might not be as visible, the risk of currency exchange rates varying unexpectedly or dramatically can be just as much a danger for a business.

Forward Contracts

One of the most popular ways to control currency exchange risk is a forward contract. This is an agreement made now to carry out a currency exchange on a fixed date in the future. Usually you put up a small proportion of the cash now as a deposit, such as 10%. The key is that you also agree now the exchange rate you’ll use then.

There are several variations on a currency forward contract. For example, you can set a limit order, where you don’t set the completion date, but rather you set the exchange rate you want to deal at. Once the order is set-up, the exchange goes through as and when the market rate hits your chosen limit.

Stop Loss Orders

A stop loss order works in a similar way, but you set a trigger level based on the market rate moving in the “wrong” direction. To put it simply, a limit order means waiting to get a particular deal, while a stop loss order means setting down the worst deal you’ll take if things go wrong. Some companies will combine a limit order and stop order so they can control the full range of possible outcomes.

The Advantages to Businesses

Using forward contracts offers companies that deal with overseas clients and suppliers many advantages. At its simplest, it restricts the degree to which companies are exposed to currency fluctuations that could mean revenue (in pounds) from overseas sales drops or that the costs of importing supplies rises suddenly.

Forward contracts don’t just reduce risk, but in some cases they can offer 100% certainty. A good example is where you make a deal with a foreign buyer that they will pay you for an ongoing order in foreign currency in six months’ time. The problem is that you don’t know how much that payment will turn out to be worth in pounds. You can solve this by setting up a forward contract to exchange the payment into pounds at a set rate in six months, meaning you know exactly how much you’ll be getting, making cashflow forecasting much easier.

Tags: exchange, agreement, exchange risk management, order, moving in the wrong direction, limit order, Risk management, safety policy

Payday loan repayment delays can lead to hefty charges

According to a recent report there are now many people who take out payday loans in order to bridge the gap between paydays. With the cost of living soaring, petrol prices having rocketed, bills going up, and food costing much more, many people are now struggling to make ends meet financially and their wages are simply not lasting for the whole month, leaving them short of cash part way through the month when the next payday is still a long way off.

As a result of this, more and more people have found themselves in a situation where they have had to borrow money in order to make ends meet and for some this is becoming a regular occurrence. Whilst some people are turning to family members and friends in order to secure this finance to tide them over others are turning to lenders, with many opting for payday loans because they are quick to process, require no credit checks, allow consumers to borrow modest amounts of money for short periods of time, and offer a fixed fee.

However, whilst some people have found these payday loans to be a financial lifeline in a very difficult climate, industry experts are warning that the cost of borrowing can increase even further with these payday loans if they are not repaid on time. The interest rates charges are already extortionate on these loans, although many customers do not realise this because they are borrowing the money for such a short period of time.

One financial industry professional said: “There is a real danger that customers could fall into a spiral of debt where they have to take out a loan each month just to make ends meets. The golden rule is not to borrow money unless it is absolutely necessary.”

Tags: customers, order, short periods, Payday loan repayment, personal finance, credit checks, result, tide

Reducing car insurance costs

Recent reports and figures have recently shown how the cost of vehicle insurance cover in the UK is soaring, with premiums now thought to be a massive 30.8 percent higher than they were a year ago. This is especially troubling for drivers in the current climate because of the soaring cost of fuel, which is already financially crippling many drivers. The rocketing cost of insurance is an added problem to the many drivers who are now struggling to keep their cars on the road.

For many people these costs are unavoidable, because they need to use their cars to get to and from work in order to earn money but at the same time they are struggling to earn enough money to pay for the cost of running their cars. With many having their pay frozen and having to cope with other living cost increases too the financial pressure it getting too tough to handle.

For those that have seen their car insurance costs soar there are a number steps that they can take to try and reduce these costs. This includes:

Comparing cover: The key part of getting cheaper cover for your insurance is to compare cover from a range of providers as the cost of cover can vary from one provider to another. Get online and see what sorts of prices the different providers can offer – you can use an insurance price comparison site but do bear in mind that not all insurance providers will be included on these sites.

Drop you level cover: Of course you do need to have insurance cover in place in order to legally be able to drive your car on the road. However, there are different levels of cover available so you may want to consider dropping the level of cover that you have if there is a big difference between your current level of cover and the next one down.

Change your car: If you have a car that is eating petrol and costs more in tax then it may be worth considering changing your car to a more economical model to cut costs in a range of areas, which would include lower insurance bracket, less petrol, and lower tax. Some people have vehicles that are much larger than they actually need so now might be a good time to trade this in and opt for a cheaper, more economical model.

 

Tags: part, different levels, Driving, Vehicle insurance, uk

Interest rates stay at all time low

The base rate is to stay on hold at its record low level of 0.5 percent for another month, following the announcement from the Bank of England after the March Monetary Policy Committee meeting. The base rate was lowered to the all time of 0.5 percent in March 2008 when the Labour party was still in power, and with the recession taking its toll on the economy has remained at this level ever since.

In the run up to the latest MPC meeting some industry officials believed that the MPC would increase the base rate because of the soaring rate of inflation. The government’s target for inflation is just 2 percent by the rate of inflation has now soared to double this at 4 percent. Increasing interest rates would help to bring the rate of inflation down, hence the MPC had been under increasing pressure to increase the interest rate.

Whilst many people were calling for a base rate increase in order to try and keep a lid on inflation there will also be many people that are relieved that the base interest rate has been kept on hold, especially homeowners with variable rate mortgages. This means that they can enjoy one more month of avoiding increases in their monthly repayments.

Speculation has already arisen about when the base rate will now be increased, with some believing that it will be later on in the year. However, one official said that it can depend on a lot of things including the mood of the MPC.

He said: ‘It is possible that, despite today’s vote to leave policy unchanged, the hawks gained the support of another member. Accordingly, a rate rise within the next few months would hardly come as a shock. But raising rates now would just mean that it will take even longer for them to get back to “normal” levels. If rates do rise, I expect the move to be a small one – and if I am right about the economic outlook, even this might later be reversed.’

Tags: base interest rate, Business Finance, target, inflation, government, record low level

Interest rates need to rise in the UK

It has been claimed by an organisation that the base interest rate in the UK needs to be increased in order to keep inflation under control, with the group claiming that it is necessary to increase the rate this year and increase it further over the course of next year.

The claim was made by the Organisation for Economic Co-operation and Development, which has stated that the base rate needs to be increased this year and by the end of next year needs to be at around 3.5 percent in order to keep a lid on inflation, which has already been soaring past the government target of 2 percent.

The base interest rate has been at its lowest level in the history of the Bank of England for well over a year now, standing at just 0.5 percent. However, inflation has been soaring and some officials now believe that in order to bring inflation down the base rate will need to be increased.

If the base rate does go up the cost of borrowing could also rise, which means that consumers may have to pay more interest on loans and mortgages. The OECD has said that whilst the government made the right move by reducing the base rate to this rock bottom level during the recession it was now time to consider increasing it.

A report from the OECD stated: ‘The gradual drift up of some measures of inflation expectations implies a need to increase interest rates earlier than previously thought and no later than the last quarter of 2010. The projected increase of core inflation to the Bank of England target warrants an increase of the policy rate to 3.5% by end-2011.’

Tags: finance, order, inflation, interest rate, OECD, Mortgages, borrowing, cost of borrowing

Renting out your home short term could be made more difficult

For many people in the past being able to rent out their homes when they are away for a period of time has been a great way to raise a little extra cash as well as to save leaving their property empty. Read more

Tags: Mortgage broker, mortgage, order, time, consent, climate, property, problems

Nationwide pleased about BIS decision

The credit card industry in the UK has been at the centre of a major crackdown recently, with government officials and regulators looking at ways to make things fairer for the consumer when it comes to credit card repayments. Recent proposals from the government were put forward to the Department for Business Innovation and Skills, and amongst the various suggestions that were put forward was an important issue relating to the allocation of repayments. Read more

Tags: building, nationwide, order, various suggestions, BIS, credit card debt, Business Innovation, credit card repayments

Credit card charges could be increased by banks

Over the past eight months the base interest rate in the UK has remained at an all time low of just 0.5 percent, with the Bank of England announcing only last week that the base rate was to remain at this record low for yet another month. Read more

Tags: credit card charges, card borrowers, regulatory pressures, order, Credit Cards

CV fraudsters targeting financial firms

It has been claimed in a recent report that financial firms and banks could be hit with a flood of CVs and application forms from fraudsters, who have filled the application form with lies in the hope of getting hired and being able to conduct fraudulent activity at the financial institution. Read more

Tags: net, recent graduates, cv fraud, work, order, activity

Interest rate could rise again quickly

The chief economist at the Bank of England has warned that whilst the base interest rate in the UK has plummeted to its lowest level in history over recent months, following a series of six interest rate cuts in as many months, there is a good chance that it could rocket back up again in the future if policymakers decide that the rate needs to go up in order to keep inflation in check. Read more

Tags: Central bank, access, lending, order, Mortgages, interest rates

Updated summary boxes could help credit card customers

For many people finding the right credit card can be difficult enough at the best of times, but when credit card providers use technical financial jargon on their marketing materials and application forms this can make the matter even more complicated. Read more

Tags: credit card summary box, application, Credit Cards, order, addition, box, credit card providers, summary box

Homebuyers being shut out by many lenders

A large number of homebuyers are having the door shut in their faces by lenders, according to a recent report. In the current financial climate an increasing number of lenders are becoming more and more stringent about who they will lend to, and as a result of this many homebuyers have been left out in the cold because they are not able to get the finance that they need to purchase a property. Read more

Tags: bank, standard deposit, order, property, buyer groups, equity, report, bank of england

Five year fixed rate mortgage launched by Co-op

Consumers that are looking to take out or switch to a fixed rate mortgage may be interested to hear that the Co-op has launched a new mortgage product that is said to offer a highly competitive rate of interest.

The lender has launched a five year fixed rate mortgage deal that will be available to eligible and qualifying borrowers, and the rate set on the mortgage will be 4.49 percent.

The mortgage came onto the market in the middle of January, but in order to qualify borrowers must be able to put down a deposit of at least 40 percent. The five year fixed period means that consumers can safeguard themselves against rising interest rates for a number of years and can enjoy financial stability through having fixed repayments for a five year period.

However, with interest rates plummeting and set to fall further many may want to stick to a variable rate mortgage or wait to see if fixed rate deals come down further.

The benefits of the mortgage from the Co-op include flexibility, such as being able to overpay on your mortgage, underpay on the mortgage, or even take a payment holiday.

An official from Co-op said: “With base interest rates reaching an historic low and rates across the industry falling, this new mortgage offers customers the chance to fix in their mortgage payments at a low rate and have peace of mind that their payments will remain unchanged at this level for the next five years.”

Another industry official said: “If you’re lucky enough to have at least 40% equity in your home then this mortgage does offer a great opportunity to fix your interest rate at a low level. However, before deciding on a mortgage it’s essential to compare mortgages to find a good deal, and then speak to a mortgage broker for professional advice.”

Tags: five year fixed rate mortgage, payments, new mortgage product, January, Co-op include flexibility, coop, order, number

Potential perks for A&L new customers

New customers signing up for a current account with the Alliance and Leicester could be in for a number of perks, after the building society launched what has been described as a current account war amongst banks by offering a range of incentives to get new customers to sign on the dotted line and open an account. Read more

Tags: official, alliance and leicester, order, investment, current accounts, interest free overdraft, OFT court

With rents falling is this the time to rent your home?

Over the past year a large number of people have been pushed into renting a home rather than buying one, and this is largely because lenders have become far more stringent over giving out mortgage loans, which has made it difficult for many people to get the finance that they need to purchase a home. Read more

Tags: family, order, right time, stabilise, chelsea, rents, negative equity, Mortgage loan

Discounts hit the High Streets in a bid to increase spending

Officials have said that consumers in the UK can look forward to a season of huge discounts as Christmas approaches, with many High Street retailers slashing the cost of goods by huge amounts in a bid to increase spending levels and try and boost profits. This comes at a time when many consumers are having to tighten their belts when it comes to spending, even through the Christmas period, in order to escape overstretching themselves financially. Read more

Tags: High Street retailers, discounts, bargain basement, bank of england, order, retail supplier, action

Will you be cutting back on your heating this year?

With energy prices having rocketed twice over the course of this year, it seems that an increasing number of us will have to cut back on our energy usage in order to cope with rising bills. Many elderly people will be doing just that, and recent surveys have revealed that millions of elderly people will be heating up just one room in their homes or even staying in bed in order to try and keep warm over the winter months. For many the colder months are set to be miserable ones. Read more

Tags: order, home, heating costs, christmas, money, whilst, energy bills, Household

Drop in interest rates causes surprise for consumers

Struggling homeowners trying to cope with high mortgage repayments welcomed a surprise earlier this month after the Bank of England slashed the base rate by 1.5% just a month after applying a surprise 0.5% cut a day ahead of the scheduled Monetary Policy Committee meeting. The slash in interest rates has now taken the base rate down to just 3%. Just a year ago the base rate stood at 5.75%, so it is now nearly half of what it was a year ago. Read more

Tags: chancellor, policy, borrowers, Business Finance, bank of england, CBI, interest rates, order

Equity being used by older people in debt

According to a recent report a rising number of older homeowners are using the equity in their homes in order to pay off debts. Officials are concerned that this increasing trend is leaving more and more people without any means to support themselves in their retirement. Read more

Tags: debt consolidation, equity, offering, industry, debt

Mortgage squeeze not letting up

The mortgage squeeze in the UK doesn’t show any signs of easing according to officials in a recent report. Officials from the Council of Mortgage Lenders have recently said that the problems in the mortgage market do not seem to be letting up, and tighter credit and lending conditions are still very much in place. The problems in the mortgage sector began last summer with the arrival of the global credit crunch, and since this time the number and availability of mortgages has fallen rapidly. Read more

Tags: plan, tighter credit, financial markets, Subprime mortgage crisis, mortgage market, Mortgages, mortgage industries, order

1 in 10 clueless about their debt

Britain is a nation “in the dark” about its finances, a new report has suggested.

A report published by CreditExpert has revealed that just one in four people can accurately say how much they have left to repay on their loans.

Furthermore, one in ten people are unsure as to their actually level of debt, the study revealed.

The research also highlighted that many Britons are not confident about applying for loans, with more than one in five believing they would be refused credit of £1,000.

Furthermore, four out of ten would not expect to be authorised to borrow £10,000 and 66 per cent of people believe they could not take out a loan of £30,000.

The research follows a further recent study, conducted by Alliance & Leicester which showed that Britons are trying to cut back on their spending and save money in order to improve their financial health as the cost of living rises.

Tags: order, recent study, CreditExpert, britons, research, debt, loan

People using credit to ‘patch holes in their budgets’

With financial conditions worsening under the current credit crunch, people are increasingly turning to credit to make up any shortfalls in their budgets, Fool.co.uk has said.

David Kuo, head of personal finance at Fool.co.uk, also said that credit fraud is likely to increase as people struggle to cover their living expenses.

People are increasingly seeing their personal finances being stretched as they face bigger outgoings due to rising household expenses. At the same time, salaries have not risen fast enough to cover the increased costs, Mr Kuo said.

Capital Economics recently reported that average earnings growth is set to remain at just under four per cent a year while food inflation is expected to stay at six per cent over the coming months.

“Initially it just starts with [people] saving a little less money…the next step is [people] start raiding [their] savings in order to try and cover [their] outgoings. The third step is [people] have to use credit in order to try and patch up any holes in [their] budget,” commented Mr Kuo.

Tags: Simple Dollar, economics, budget, Household, food, fool

Parents make sacrifices for children

Parents are making considerable financial cut-backs in order to afford what their children want, according to new research.

Findings from Engage Mutual reveal that up to 49 per cent of parents with children under 18 say that they have given in to their children’s pleading in the last 12 months.

A further 68 per cent said they would make financial sacrifices to be able to afford gifts that their children ask for.

Karl Elliott, spokesperson for Engage Mutual said: “With kids being spoilt for choice for toys, technology and games, many feel pressure from their peers to keep up with the latest gadgets and labels.”

He added that the research gives a new perspective into family finance with some children ‘wearing the trousers’ when it comes to family spending.

The survey found that up to 44 per cent of parents with children under 18 say that they cannot always afford what their children want or need, with 81 per cent of these parents being more likely to make sacrifices.

Meanwhile, the child poverty action group has welcomed the proposals in the budget stipulating that £1 billion will be put aside to help child poverty.

Tags: family, order, survey found that, research, poverty, pressure, Childhood, Parent

Link between base rate and mortgage rates “severed”

An expert has suggested that mortgage rates are no longer influenced by the Bank of England’s base rate of interest.

Melanie Bien, director of Savills Private Finance, said that despite the Bank’s monetary policy committee choosing to maintain the base rate at 5.25 per cent, Abbey has announced its mortgage rates will be rising from next week.

“It proves that the connection between base rate and mortgage rates has been all but severed as lenders look to improve margins rather than market share,” she claimed.

Consequently, even if the base rate comes down further this year, this may not feed through to mortgage products, the expert suggested.

In order to make the most of the best deals currently available, need to “act quickly” before lenders remove them from the market.

Paul Holmes, chief executive officer of Firstrung, said that people are unlikely to be able to take out 100 per cent-plus mortgages any more.

However, despite some people criticising such products, Mr Holmes said that they were “very good” in some circumstances.

Tags: abbey, Firstrung, order, week, market

Consumers switch mortgages to save money

Nearly 1.4 million consumers have switched their mortgage provider in order to secure a better deal, one financial expert has claimed.

Research from MoneyExpert.com has revealed that an estimated three per cent of the adult population has changed mortgage supplier since June last year, a figure which is thought to represent 11 per cent of all UK mortgage holders.

Sean Gardner, chief executive of MoneyExpert.com, said: “The uncertain financial climate of the past six months has forced many people to reassess their household budget with the mortgage top of the list of priorities.”

He added that swapping mortgage supplier will cost more with rising application fees and most are now uncapped, meaning you’re likely to pay a proportion of the total amount you borrow

People aged 35 to 44 are the most likely to have switched mortgage provider, while people living in the South of England are least likely to have done so.

Meanwhile, further research from MoneyExpert.com revealed that four out of five consumers are overpaying for financial products.

Tags: order, cent, consumers, mortgage supplier, budget, household budget

Fall in house price tempts buyers

One in ten people who intend to buy a house have brought their plans forward due to the recent price falls in the market, according to new research.

A survey by personal finance information providers Fool.co.uk has shown that 11 per cent of potential home buyers have accelerated their plans.

Out of those respondents, 38 per cent expect to move this year and one in three believe they will change their property in 2009.

David Kuo, Head of Personal Finance at Fool.co.uk, said: “The long-overdue correction in the property market will allow many people who have been waiting to move house to finally realize their dream.”

However he added that many buyers often approach the financial thinking behind purchasing a home in the wrong order.

“Quite often people will ask how much they can borrow when they want to buy a property. But that is altogether the wrong question. Instead, they should ask themselves how much they can afford to repay,” he said.

Fool.co.uk revealed that over a third of Brits spent New Year in their homes to save money.

Tags: order, personal finance information, correction, New Year's Day, property, fool

Insurance policies ‘will increase value of items over Xmas’

Many insurance policies covering home contents will automatically raise the sum of the items insured both during and after the Christmas holidays, the Association of British Insurers (ABI) has warned.

This automatic increase will take place in order to account for the number of valuable gifts that people receive over the holidays.

A spokes person for the ABI, Malcolm Tarling, also issued a warning to students to make sure and check their policies’ stance on items which are in unoccupied property.

He said: “The value of items in homes tends to go up over the Christmas period, [but also] in the months after Christmas as well.

“I would imagine there is an above average number of iPods and digital TVs and camcorders and technical gadgets and all the rest of it.”

A recent survey from Liverpool Victoria found that the average home in the UK has over £25,000 worth of content.

Tags: Insurance, content, Xmas, unoccupied property, order, technical gadgets, property, Christmas period

International cheque scam foiled

An international scam involving fake cheques and postal orders that were destined for London has been foiled by the government’s Serious Organised Crime Agency.

Investigations have been on-going for a month in Nigeria, and as a result £8 million worth of fake cheques and postal orders have been seized. The scam has been described as sophisticated by officials, and a number of people in Britain have been arrested for their involvement in the fraud.

According to reports around sixty arrests have been made in countries around the world in connection with the scam, including arrests in Spain, Canada, Nigeria, the United States, and the Netherlands. During the operation fake passports were also discovered in addition to the fake cheques and postal orders. Around three thousand forged cheques that were due to go to an address in London were seized, along with an additional fifteen hundred forged cheques going to other London addresses.

UK residents have to pay out billions of pounds each year because of fake cheques that are used to purchase goods or get cash, and then bounce. Some of the cheques that were seized as part of the operation were already filled in for amounts ranging between three and seven thousand pounds. One of the scams in which such fake cheques are used in where consumes are told that they have won money or inherited money, and are asked to send in a fee to make their claim. They then receive a fake cheque, which then bounces once the bank discovers that it is fake.

Another scam involves consumers being told that the cheques are work processing cheques, and they send in the amount of money to cover the cheque and then bank the cheque, which later bounces.

Tom Smith
11th November 2007

Tags: cheques, fraud, money, postal, international

Families reign in their borrowing

Families with mortgages are taking measures to limit their debt, according to one industry expert.

Alliance and Leicester said that this demographic group is reducing the amount they spend on credit cards and cutting back on savings in order to take control of their debts.

The company puts this to consistent rises in the interest rate which now stands at 5.75 per cent and does not look like increasing further.

Sean Murphy, director of strategic planning at Alliance & Leicester, said: “Even though average interest rates on unsecured borrowings have actually fallen over the last 12 months, that has not been enough to tempt mortgage borrowers to take on more unsecured debt.

“Their family budgets have been under pressure and they have cut their cloth accordingly.”

Alliance and Leicester’s Borrowing Monitor showed that it is mortgage borrowers in particular that made cuts to borrowing with their rates falling while other groups’ borrowing rates saw “modest growth”.

Mr Murphy concluded that the base rate likely to see downward movements in the future, “some welcome comfort” would come to families with mortgages.

Tags: order, industry expert.Alliance, Monitor, family, credit

Britons improving to add value

Homeowners in the UK are taking the time and effort to improve their properties in the hope that it will boost value.

Research carried out by Halifax found that 25 per cent of people who carried out work on their home in the last year did so in order to increase its worth – up from seven per cent last year.

Some 16 per cent were inspired to improve their houses in order to make it easier to sell, a higher figure than the two per cent who did the same a year before.

“Our research shows that Britain has become a nation of movers and improvers,” said Patrick Swindon from Halifax. “It’s great to see that so many people are investing time and effort in improving their home.”

The study revealed that the most popular ways to improve property were redecorating for 66 per cent, overhauling the garden for 41 per cent and laying new flooring for 25 per cent.

Interior designer George Bond recommends that homeowners focus less on the wallpaper and more on the main rooms in the house.

“In my own experience, the major parts of the house to change to increase the property’s value are the bathroom and kitchen,” he said. “These are the key areas of the home; if these rooms are modernised, the property’s value will go up.”

Tags: higher figure, home, research, order, George Bond, designer, experience

Interest-only mortgages ‘can help lower costs’

Interest-only mortgages can be beneficial to people looking to lower the overall cost of borrowing to buy property.

That’s according to Bernard Clarke, spokesperson for the Council of Mortgage Lenders, who said that certain buyers can find this type of loan a good option.

“It’s a clearly an option for buy-to-let investors who usually want to minimise their borrowing costs and are not interested in acquiring ownership of the property outright,” he said.

But for homeowners who would like to start repaying the bulk of their loan, an interest-only mortgage should be reviewed somewhere down the line.

“If they take an interest-only option to reduce their initial costs but do want to eventually own the property outright then they do need to think about transferring to an interest and capital repayment mortgage,” said Mr Clarke.

Alternatively, buyers can utilise separate savings or investment plans in order to save up the money to repay the capital.

“People are free – if they are taking out an interest-only mortgage – to choose alternative repayments vehicles,” Mr Clarke explained.

Tags: interest-only option, option, interest, money, order, Council, capital repayment mortgage, investors

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: defend, penalties, order, judge, cases, cost

The cash machine turns 40

On June 27th 1967 personal banking changed for ever with the opening of the world’s first cash machine in Enfield, North London.

The Barclays branch opened the first ever ATM so that customers could access cash outside of the bank’s normal opening hours.

Actor Reg Varney, star of popular sitcom On the Buses, christened the cash point and will always be remembered as the first person ever to withdraw money from a hole in the wall.

In those days, customers needed to feed a special voucher into the machine and enter a unique four digit code in order to gain access to a £10 note.

Principally, ATMs have not changed too much over the last 40 years but their popularity has soared.

By the end of the 1960s the UK had 595 cash points, while the world contained 781. By the end of 2006 there were 60,642 in the UK and 1.64 million across the globe.

“The cash machine, more than any other banking innovation, has had a major impact on the way we all conduct our lives, not just our banking,” said John Warren, head of cash machines for Barclays.

“Forty years ago cash was only available from 9-3 pm Monday to Friday and Saturdays from 9 -12.30 pm and, as cash was king, queues outside branches on a Saturday morning to get weekend money were common. Now you can get money any time, anywhere.”

The cash machine was invented by John Shepherd-Barron who had the idea while taking a bath after he had been prevented from getting his weekend money because he was late to the bank.

Tags: order, business, time, voucher, code, barron, barclays, bank

Customers should enjoy ‘positive payments’ order

Nationwide is calling for credit card customers to enjoy a positive order of payments.

Research carried out by the group indicates that over two-thirds of consumers do not know which order their payments are allocated to their account.

Almost a fifth believe that the longest outstanding debt is paid off first, while over one in ten believe that that the highest interest items are paid off first.

Nationwide claims that less than a third of Britons know how their repayments are allocated; that is, with the lowest interest items being paid off first.

Although the group has welcomed government action which mean that from October next year all credit card providers will have to draw attention to the order of payments they use, it worries that the practice is not well understood by consumers.

Nationwide is calling upon the industry to make changes now and to treat their credit card customers fairly by adopting a positive approach to their order of payments.

Tags: interest, Financial services, positive order, government action, attention, britons

Tired driving warning

Motorists are being warned of the dangers of driving while tired, following new research from insurance firm esure.com.

The company has published a report, entitled ‘Yawning Nation’ and found that driving a long distance is the most likely everyday activity to make you yawn.

A total of 44.2 per cent said that sitting behind the wheel for a long time leads to them feeling quite sleepy and an astonishing eight per cent admit to having fallen asleep while driving.

The dangers associated with this are massive and well publicised and many drivers say that they try to take action to counteract the effects of tiredness.

The majority of people, 81 per cent, open the window in order to remain awake, while a further 64 per cent turn on the air conditioning.

Music is often used, with 50 per cent singing along to the radio or a CD and 43 per cent playing loud music.

Despite this, experts point out that most people are simply wasting their time with these ’stimulating’ methods.

“The methods that drivers say they are using to keep themselves awake in the car are all ineffective. They will not stop people from falling asleep unintentionally or fend off a distracting yawn,” warned Dr Chris Idzikowski from the Edinburgh Sleep Centre.

“The only thing to counteract tiredness behind the wheel of the car and fully recharge the human battery is having caffeine followed by two closely spaced 20 to 30 minute naps before setting out.”

Tags: Insurance, new research, loud music, cent admit, research, order, recharge, Tired driving warning

Holidays put Brits in debt

Millions of Brits are happy to put themselves in debt in order to go on holiday.

New research shows that as many as 12 million people borrow money in order to take a break abroad and they end up paying for it well after returning.

CreditExpert.co.uk, an online credit monitoring service, carried out research which found that credit cards, loans and overdrafts are the most popular ways of getting together the money for a trip.

Shockingly, six per cent of respondents admitted to going into debt most or every time they go on holiday, with 18 per cent believing that an annual holiday is so important that they do not think about the money until they return.

Once on holiday things do not get any better, with 22 per cent revealing that they lose track of how much they are spending.

“It’s worrying that, as a nation, many of us have a ‘me now, debt later’ attitude to our finances. Most of us work hard and need a well-earned break, but it’s important that we plan ahead and ensure our bank balance can handle the large outgoings that holidays and other expenses entail,” said Jim Hodgkins, managing director at CreditExpert.co.uk.

“Keeping a budget for the cost of the vacation as well as day-to-day holiday expenses will help you avoid going into debt.

“Missed credit repayments are likely to have a negative impact on your credit report, which means lenders may not want to offer you credit in future,” he added.

People aged between 25 and 34 are most likely to lose track of their holiday spending and 37 per cent say that this is the cause of their debt.

Tags: CreditExpert.co.uk, online, money, CreditExpert, bank, budget, vacation

New buyers need parents’ help

It is becoming so difficult for first-time buyers to get onto the property ladder that 31 per cent anticipate getting help from their parents to do so.

A further 35 per cent are so daunted by the housing market that they feel they need financial help in order to get their first mortgage,

Research from the Council of Mortgage Lenders (CML) shows that younger people are genuinely struggling to get onto the property market without some kind of financial help.

Figures show that 23 per cent of all homeowners had help from their parents to get where they are today, while that number soars for younger owners.

Of those aged under 29 or younger, 39 per cent had help from their parents and it seems as though this trend is set to continue.

“We were intrigued last year to find that, while around eight out of ten people believed it had never been harder for first-time buyers to enter the market and that action was needed, only eight per cent of them felt that parents should do more to help,” said Bob Pannell, head of research at CML. “Our new research helps to explain why.

“Over the past few years, parents have already been providing significant help to younger home-buyers and there is uncertainty about whether they can do even more.”

Of those who said they think they will need financial help to get onto the property ladder, only 62 per cent expect to get it.

Tags: younger owners.Of, kind, Banking, mortgage, year, order, housing market, Council

January worst month for burglary

A robbery takes place in Britain every 35 seconds during January, with figures showing it to be easily the worst month for crime.

According to Halifax Home Insurance, we are 26 per cent more likely to have our homes broken into during the first month of the year when compared with the annual average.

It is estimated that around 76,000 homes will be broken into during January, costing a collective £170 million.

Halifax is trying to get the message across that it is vital to take out insurance, while the firm is also attempting to help homeowners prevent crime in the first place.

“We tend to see a rise in burglaries during January as burglars know that it is the time when our homes are packed with lots of new and expensive items, ranging from electrical goods to jewellery,” said Vicky Emmott from Halifax Home Insurance.

“We must remember that thieves are opportunists, and will strike during the day or night if they feel a property has inadequate security and the timing is right.”

Official crime statistics show that a huge 40 per cent of burglaries take place during daylight hours (06:00 – 18:00), highlighting the fact that thieves are willing to strike at any time of day.

Homeowners are being urged to remain vigilant throughout the day and night in order to avoid becoming a victim of burglary.

“The fact so many burglaries take place during daylight hours shows the importance of always remaining vigilant,” added Ms Emmott.

According to Halifax, Nottingham, London and Leeds are the worst areas for theft, while Colchester, Bath and Shrewsbury are the safest.

Tags: london, firm, halifax, worst areas, theft, day, GBP