In November 2016. the FCA issued a very broad Call for Input on High Cost Credit. In November 2014 when the price cap and other payday lending rules were announced, it was stated that they would be reviewed after two years and this new Call for Input is part of that review. Andrew Bailey, Chief Executive of the FCA, said: We have come up to the point of reviewing the cap on payday lending, … [Read more...]
Debt news and policy
Debt Camel articles on what's happening in the world of personal debt in Britain.
For my collections of other news items, please see Weekly News Summaries.
Debt news – February 12
My pick of last week's news is the Financial Ombudsman's newsletter, with some very interesting case studies. Graphic of the week Debt news Sub-prime cars: are car loans driving us towards the next financial crash? Analysts fear the boom in personal contract plans are mirroring the sub-prime mortgage scandal and are fuelling a colossal build-up of debt in UK and US. More … [Read more...]
Has British Gas added a new default for an old debt?
A couple of questions about British Gas defaults from Debt Camel readers in the last few weeks: I check my credit file monthly. I have just noticed an account that was never on there before from British Gas saying that I owe £179 from 2008. The only thing that is showing is a default issued Jan 2017. I have no recollection of this money. We didn't move from that address until 2010. What can I … [Read more...]
Which debts can you go to prison for not paying?
I don't think people should be sent to prison for not being able to pay a debt. So I was pleased at two recent pieces of news about imprisonment for debts. First, the sentencing guidelines for not having a TV license have been changed from April 2017. There is now a conditional discharge option, instead of a fine. You can't get sent to prison for not having a TV license, but the fines are often … [Read more...]
Insolvency numbers up – but rising debt isn’t the main cause
On 27 January the Insolvency Service published the data on insolvency in 2016. The number of people who became insolvent in England and Wales last year was 90,930. As the graph above shows, this has reversed the trend of personal insolvency numbers falling every year: the total for 2016 is over 13% higher than in 2015, the first time there has been a rise since 2009. Bank of England statistics … [Read more...]
How long do people stay debt free after a DMP or DRO?
Every debt adviser wants their clients to get out of debt and then stay out of debt. But there is very little evidence about how long people stay debt-free after clearing their debts, through debt management or insolvency. So CAP's Freedom Report, published this week, is very interesting reading. DMPs and DROs were the most frequently used debt solutions for CAP clients in 2015, who had an … [Read more...]
Scarcity – why people in debt need a breathing space
I recently read Scarcity: Why having too little means so much by Sendhil Mullainathan and Eldar Shafir. Since then I have been recommending it to friends in the debt advice world. I think Scarcity is a very interesting read for anyone interested in personal debt advice and policy in Britain. Many of its arguments are directly applicable to the idea of introducing a breathing space for debt that … [Read more...]
Credit Ladder – can renting boost your credit rating?
Paying your mortgage on time helps your credit score. Shouldn't paying your rent do the same? That is the idea behind Credit Ladder, where tenants renting from a private landlord can sign up to have their rent payments reported to Experian. There aren't any figures published yet on take up, but Credit Ladder's director, Asa Bentley said: The reaction to our service has been beyond our … [Read more...]
I’ve been sent PPI and my DRO is being revoked
Most people would be delighted to get a letter saying a bank has looked again at their PPI reclaim from a couple of years ago, decided they got it wrong and that a refund should have been paid so a cheque for £2,000 is on the way. But for Mrs P this wasn't good news. Her first thought was not what to do with the money, but would it make a difference to her Debt Relief Order. She talked to the … [Read more...]
MMF customers – will your debt be refunded / written off?
On 2nd November, the FCA announced that MotorMile Finance UK Ltd (MMF) had agreed to provide redress to more than 500,000 customers for "historic failings": The firm had inadequate systems and controls over due diligence. In particular, it failed to conduct sufficient due diligence upon the purchase of a debt portfolio to be satisfied that the sums due under customer loan agreements were correct. … [Read more...]
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