The Financial Conduct Authority (FCA) announced on 1st December 2014 that it was banning credit brokers from charging fees to customers from January 2nd 2015 unless they comply with a strict set of conditions. Credit brokers are middlemen - they don't lend money themselves. They can offer to find any length of loan but much the most common target is payday lending. This action is an unusual … [Read more...]
Pension changes – the challenge for debt advice
This is a guest post by Nick Lord. It argues that the new pension rules are a game-changer for debt advisers and that debt advice agencies need to put measures in place to ensure that their advisers can provide best advice post April 2015. Nick is a consultant on money advice and personal finance issues working with Government departments, regulators and firms. Debt Advice and the Proposed … [Read more...]
How IVA, DRO or bankruptcy affect affordability complaints & PPI claims
If you have been insolvent - bankrupt, had an IVA or a Debt Relief Order (DRO) - then you need to know how this affects a claim for a refund for a financial product. You can't make a new claim for a PPI refund - the deadline for this passed at the end of August 2019. There are a lot of claims in progress - and you can still make affordability complaints such as those about payday loans and … [Read more...]
Payday loans cap – the implications for borrowers
The FCA announced on the 11th November that it will cap the costs of payday loans from 2nd January 2015: Initial cost cap of 0.8% per day. For new loans, or loans rolled over, interest and fees must not exceed 0.8% of the amount borrowed. So for a one month loan of £100, the interest and fees if the loan is repaid on time cannot exceed £24 If borrowers cannot repay their loans on time, … [Read more...]
Are you being tricked into debt by your own mind?
Have you heard of "present bias"? It's not wanting a jumper for your birthday rather than a bottle of wine, it's a behavioural economics term for a self-delusion that everyone suffers from to some extent. It affects many areas of life and one of the most important is making poor decisions about money - present bias makes it easy to get into debt and much harder to climb out. All too often we … [Read more...]
A friend owes me money – what can I do?
What should you do if a friend owes you money? Perhaps you took out a loan or bought something with your credit card for them because you had a better credit rating. Or perhaps you just lent them the money. And now they aren't repaying you. It would have been better to have thought all this through BEFORE lending the money... research has shown that nearly a third of people have fallen out … [Read more...]
Are you getting too many calls about debts?
Creditors and debt collectors can phone you about your debts and ask you to pay the money you owe. But too many calls are unreasonable and can cross the line into harassment, which is illegal. If you are being phoned too often by debt collectors, there are practical steps you can take to stop it. How many is "too many"? In this news story, a man kept a record of over 700 calls from MBNA … [Read more...]
How to tell if you have CCJs
If you don't know if you have a County Court Judgment(CCJ) you can check your credit record and/or check Registry Trust's database of CCJs. You may want to find out about CCJs for three reasons: if you have been ignoring your debts for a while and you have moved or thrown away a lot of letters, but now you want to see what has happened; you may have been refused credit or even a … [Read more...]
Do a million need payday loan compensation?
On 2nd October 2014 the Financial Conduct Authority (FCA) announced that Wonga had agreed to compensate an estimated 375,000 customers where Wonga's "affordability" checks are likely to have been inadequate. The common reactions were first that Wonga was being made an example of to warn other payday lenders and second that this was a huge number of refunds... But should many more people get … [Read more...]
Wonga write-offs for 375,000 people in 2014
Wonga is offering write-offs to 375,000 of its current customers because its affordability assessments have been inadequate. This was agreed with its regulator, the Financial Conduct Authority (FCA) and announced on 2nd October 2014. Wonga has agreed to make significant changes to its business immediately to try to prevent these problems happening in future. Who is being compensated? The … [Read more...]
IVA completion certificate delays are too long
In 2018, delays on completing IVAs aren't as bad as they were a few years ago. but some still take over 6 months to finish, often with no good reason. This article looks at why these delays matter and what you can do if you are waiting for your IVA completion certificate after 6 months. How bad have delays been? In 2014 an Insolvency Service report said: "a high proportion of complaints are … [Read more...]
FCA warns debt management firms
In September 2014, the Financial Conduct Authority (FCA) issued a press release warning debt management firms, payday lenders and credit brokers that: "Many firms are falling well short of our expectations and they will need to raise their game if they want to continue operating." The FCA had only become the regulator for debt management firms in April. As a result, many of these firms … [Read more...]
Debt Camel is One – and it’s been a busy year!
On 12th September 2013, Debt Camel went live. This seems like a good time to reflect on how the first year has gone and look forward to the next year. Most read pages Apart from the Home page, the most read page was the main one explaining Bankruptcy – the big questions. I think I would have guessed that correctly if I had been asked on launch day! What I wouldn't have predicted were the next … [Read more...]
The secured loan clause in IVAs – a potential timebomb?
Background - secured loans and IVAs The following is a brief summary. Before 2014, most IVAs had terms which say a debtor with equity in their house must try to release some of it in the fifth year of the IVA through a remortgage; and that if this isn't possible a sixth year of IVA payments will be required. At the start of this year the IVA Standard Protocol was updated to include an … [Read more...]
DRO consultation – what changes are needed?
In August 2014, the Insolvency Service issued a Consultation on Debt Relief Orders (DROs) and Bankruptcy petition limits. I think there are a lot of problems with the personal insolvency regime in England and Wales (see my article last week about the recent insolvency statistics) and so this consultation provides a welcome opportunity for the Insolvency Service to get industry responses on many … [Read more...]