Debt news and policy Archives

Debt news and policy

Debt Camel articles on what's changing - and what ought to change - in the world of personal debt in Britain.

If you are interested in a specific area, look at: High cost credit news & policy and Insolvency news & policy.

Introducing a cap on the cost of Rent To Own lenders such as Brighthouse

The FCA's Consultation on High Cost Credit 18/12 is clear about the harm caused by Brighthouse and other rent-to-own (RTO) lenders: Our findings make clear that the costs of RTO are high, sometimes exceptionally so. RTO users are paying an average premium of 3 or 4 times the typical retail price of goods. At the extreme, this can be nearly 5 or 6 times ... We think it is highly likely that harm … [Read more...]

Vanquis ROP – over limit charges not included in the refunds

I have asked Vanquis how they are calculating the FCA-ordered refund of the interest that people have paid because of their ROP purchases. One thing that Vanquis have explained is that they are not including a refund of any additional over the limit charges. This won't affect everyone getting a refund but it will be important for some people. Why aren't Vanquis refunding these? Vanquis … [Read more...]

Vanquis ROP refunds – they look too low – what is happening?

People are starting to get refunds from Vanquis for the extra interest they paid if they had the Repayment Option Plan (ROP). That's the good news. But the refunds are being paid very slowly. In June, Vanquis gave up its three-month target and said it hoped to refund people with open accounts by the end of the summer. UPDATE That didn't go well. In October people were then being told … [Read more...]

FCA high cost credit review – great headlines, not so much action

The FCA published two High Cost Credit Review consultation papers published yesterday: rent-to-own, home-collected credit, catalogue credit and store cards, and alternatives to high-cost credit; overdrafts. Although these got some great headlines - the word crackdown appeared frequently - I think it is fair to say that most debt policy campaigners have been disappointed by the proposals … [Read more...]

Max FOBT stake to be £2 and other good news about gambling

Today's announcement that the Government is restricting the maximum stake on FOBTs to £2 is brilliant news. At the same time, the government has announced a range of other measures, some to come in now and some that may be introduced in the future. And yesterday Monzo talked about what is going to be doing to help its customers self-exclude from gambling. Restricting FOBT stakes to … [Read more...]

FCA needs to take action on logbook loans urgently

Yesterday the government announced that it was dropping the proposed new logbook loan legislation. This is a very disappointing move, the bill would have had all-party support. I agree with these comments on Twitter: Strange one - never spoken to anyone who didn't think it was a good idea and the current legislation causes huge problems for some people. Joe Lane. Pretty odd decision. These … [Read more...]

SMI watch – 24 April – slow progress & statistics problems

On 24 April the DWP published the latest statistics on the switch from paying Support for Mortgage Interest (SMI) as a benefit to giving it as a secured loan giving numbers as at 18 April: how many people getting SMI have been sent letters and successfully contacted by phone; what the people who have been successfully contacted are choosing to do - take the loan, decline the loan or are … [Read more...]

Should paying your rent help you get a mortgage?

It sounds like common sense to say that if you have paid £880 rent a month for a couple of years then you can obviously afford a mortgage costing £880 a month. And if you live in London or the south-east, you will probably add that rents are so high you can't afford to save much for a deposit, so you need your good rental payment record to be taken into account in a mortgage application. This … [Read more...]

SMI – what happens if you haven’t agreed to take the loan?

Support for Mortgage Interest (SMI) used to be paid as a benefit to people who weren't working - this ended on 5 April 2018. From 6 April someone newly applying can only get help with their mortgage costs through a secured loan instead. This is sometimes referred to as Loan for Mortgage Interest (LMI), but the old name SMI is also used. If you have been getting SMI before April, there are now … [Read more...]

SMI watch – 25 March – no real progress in last week

On 23 March the DWP published the statistics as at 21 March on the switch from paying Support for Mortgage Interest (SMI) as a benefit to giving it as a secured loan showing: how many people getting SMI have been contacted by letter and phone ; what the people who have been successfully contacted are choosing to do - take the loan, decline the loan or are currently undecided. UPDATE: … [Read more...]