Billions accrued in debt during downturn

It has been claimed in a recent report that Brits have managed to accrue billions of pounds in debt during the economic downturn as a result of their shopping addictions. Despite the money worries and concerns over job security that have been experienced by many consumers many have continued indulging in their shopping addiction, and accruing huge debts into the bargain.

The comparison website uSwitch claims that British shoppers have managed to accrue £24 billion worth of debt as a result of their recession shopaholism, which is a term that the website uses to describe those that have built up more than half of their debt through purchases of fashion items.

The breakdown provided by the website showed that there were more women than men that were classed as shopping addicts, with three million men and four million women. However, the average debt accrued was higher amongst men, coming to £3425 compared with £3353 for women. Unsecured debt for women in Britain came to £13 billion and this compared to £10 billion for men.

An official from uSwitch said that although finances have been strained for many people many women had continued to follow their idols and buy a range of expensive fashion items including clothes, handbags, and shoes rather than curbing their spending on fashion shopping in order to save money and ease the financial strain. In some cases those that have accrued debt by shopping for non-essentials during the downturn have said that the recession and economic downturn has been the cause of their spending, as they have shopped to cheer themselves up.

uSwitch officials said: “Despite the financial constraints, women have carried on copying the lifestyles and shopping habits of their idols and ignoring the debt they are racking up in the process.”

Tags: Financial services, report, uswitch, debt, credit

Inaccurate bills common amongst energy suppliers

Many households are used to getting bills that are inaccurate for one reason or another, and these bills can come from a variety of sources and companies. This can be very frustrating for the bill payer, as it can mean that it takes longer to sort out their budget, which is something that most people want to get done as quickly as possible in the current financial climate.

It has been revealed that some companies are worse than others when it comes to sending out bills that are no accurate, and the group of companies that have emerged as being the worst for this type of activity is energy suppliers, according to a recent report.

Research was carried out by uswitch.com and indicated that consumers found energy suppliers to be the worst when it came to sending out inaccurate bills. Moreover, this is the fourth year in a row that energy suppliers have been voted worst in this survey, showing that much improvement is still needed when it comes to billing.

The data showed that in the last two years around 30 percent of households had received incorrect bills from their energy suppliers for their gas and electricity usage. Data also showed that of 17 percent of these households had been incorrectly billed by their energy supplier more than once.

Whilst some of the inaccuracies on the bills were sorted out within a week or two, the average time taken to resolve the problem was just over two months. This has led to a greater number of consumers providing their own readings o energy suppliers.

Uswitch stated: ‘Clearly there’s a long way to go before the energy industry lays the ghost of bad billing to rest, but there is some hope here. The fact that more households are providing suppliers with meter readings will play no small part in improving the accuracy of our energy bills.’

Tags: billing, energy bills, energy supplier, inaccurate, uswitch

Can comparison sites be trusted?

In the past anyone that wanted to look at finding cheaper prices on various products or services had to go to the hassle of ringing around or trawling the shops to try and get a better deal, which was quite frankly an inconvenience that put many people off trying to get a better deal. Read more

Tags: compare products, money expert, mobile phones, uswitch, which, broadband

Norwich Union pulls out from comparison sites

Insurance giant Norwich Union has recently announced that it is pulling out of placing deals on price comparison sites. Many insurance providers allow their deals and packages to be viewed on one of a range of price comparison sites that have come into play over the past couple of years. A large number of consumers use these sites to see at a glance whether they can cut the cost of cover or to find the most competitive insurance deals. Read more

Tags: Website, move, uswitch, insurance giant, use, price comparison sites

Drivers urged to tell the truth when applying for insurance

Despite car insurance being at highest recorded levels, drivers need to avoid the temptation to lie to acquire cheaper premiums, one financial expert has urged.

According to Gocompare.com, some drivers will look to cut insurance costs by withholding information to insurers which, if they get caught out, could increase costs later on.

Providing incorrect information is a “false economy” as it can invalidate a policy and mean it is more difficult to get insurance in the future.

Hayley Parsons, Gocompare’s managing director, said that insurance represents a large proportion of the money drivers spend on their vehicles so they are always on the lookout for savings.

“One of the best ways to save money on your insurance is not to just accept your renewal quote, the best company for you 12 months ago, may not be the best today,” she added.

Meanwhile, research from uSwitch revealed that UK motorists pay £333 million per year in fees to car insurers to make changes to amendments to their policy.

Tags: business, Vehicle insurance, GBP, uswitch, research, renewal, finance, Insurance

SSE raises energy tariffs for consumers

Scottish & Southern Energy (SSE), the UK’s second biggest supplier, has announced it is to join the likes of British Gas and Npower in increasing its energy and gas tariffs.

The firm has raised its tariffs by 14.2 per cent (£50) for electricity and 15.8 per cent for gas (£85) while its Dual Fuel tariff has risen by 15 per cent to £131.

According to uSwitch.com, this takes the annual fuel bill for an SSE customer to £1,006 from April 1st.

A spokesman for uSwitch.com said that the SSE should be applauded for ensuring its customers were not impacted by price increases over the winter months.

“Unfortunately, it should come as no surprise to their customers that bills are increasing as where others lead, it was sure to follow,” he said.

In January, Npower became the first of the ‘big six’ to hike costs and was soon followed by the likes of EDF and British Gas which both announced rises for utility bills in the same month.

Tags: winter months, electricity, big six, dual fuel, british gas, Scottish

“Incredibly important” for debtors to be aware of solutions

It’s “incredibly important” that those seeking debt help are made aware of all solutions available to them, says a debt advice service.

Debt Help UK said that being aware of all the solutions that are available can make the difference between finding an appropriate solution and having a solution forced upon her.

Iain Wrenshall, director of Debt Help UK, said: “As your situation degrades, then your options generally become narrower and, ultimately, your creditors have the sanction to make that choice for you.”

“It is important that people don’t bury their heads in the sand, but look for free advice which is going to help them understand the solutions and the options open to them,” he concluded.

According to research from uSwitch.com, almost one in four UK adults are finding debts unmanageable – 9.5 million have maxed out on one form of credit in the last six months and 38 per cent have had a credit card application rejected.

Tags: uswitch, United Kingdom, debt, Insolvency law, free advice, Debt Help UK, director

Card companies spark debt fears with repayment reductions

Minimum repayment levels of some leading credit cards are set to be reduced.

Cards providers have heavily advertised the reductions recently.

However, many in the industry are criticising the new offers, saying that the card providers might be exacerbating the UK’s debt problem.

To take an example from today’s Minimum Repayment Index from price comparison website uSwitch, M&S is reducing its repayment level from three per cent to 2.5 per cent, which might well appeal most to the ’spend today and worry tomorrow’ consumers who are currently racking up debts.

Barclaycard has also recently announced that its rate will be cut from 2.5 per cent to 2.25 per cent.

Lowest of all are lenders such as Bank of Scotland and Egg, who offer a tiny two per cent repayment rate.

Research released by Alliance & Leicester last week showed that the overall level of debt in the UK stands at an enormous £1.3 trillion, with those on lower incomes being particularly badly hit.

Tags: lower incomes, Financial services, Index, debt, debts, uswitch

Over two billion still to be claimed in bank charges

According to figures released by the price comparison website Uswitch, over two billion pounds worth of bank charges are yet to be claimed by consumers that have been hit with hefty and unlawful penalty fees over the past six years.

The topic of bank charges has exploded over recent months, with regulators claiming that the charges imposed for exceeding an overdraft limit and for returned cheques and direct debits are unlawful and unfair. As a result many people have claimed back these charges going back up to six years, but Uswitch officials claim that around £2.12 billion has still yet to be claimed.

The figures from Uswitch suggest that around four billion pounds in charges have been netted by banks that have applied these charges to the accounts of around nineteen million consumers in the UK. So far, over half of that amount has not been reclaimed by consumers.

So many people are now being encouraged to reclaim their fees from banks that there are a number of financial services available that can help consumers to try and reclaim their fees if they are unsure as to what they need to do. However, the clock is ticking, as an impending decision from UK regulators with regards to what is construed as a fair fee may reduce the amount that claimants can file for.

Many consumers have already threatened to take their banks to court for not repaying the fees, and in most cases the banks have paid up on a last minute basis, with no banks actually having gone to court to justify the amount that they charge.

However, it seems that many consumers are frightened of the consequences of making a claim, with a number of banks having threatened to close consumers’ accounts if they try and reclaim their fees.

Tom Smith
10th May 2007

Tags: uswitch, time, claim, close, fees

Banks extend credit card cash advance charges

Customers are being urged to be as savvy as possible when using their credit card, with many providers believed to have extended the remit of cash advances.

Such an action could be tough on consumers, with the interest rate on purchases such as gift vouchers and online betting often being double that of usual cash transactions.

Nick White, director of financial services at price comparison site uSwitch, has described the way in which cardholders are being “bamboozled” by the banks’ tactics.

“They don’t know whether they will be charged at the much higher cash withdrawal rates on a whole raft of credit card transactions unless they scour the small print in their terms and conditions,” he told This is Money.

The measures are believed to have been implemented by many financial providers to recoup finances as a result of an Office of Fair Trading decision last year, which compelled banks to cap penalty fees at £12.

According to the Association for Payment Clearing Services, cash withdrawals on credit cards in the UK totalled £8.22 billion last year.

Tags: Association, action, advance, penalty, Clearing, Financial services, Credit card, uswitch