My pick of last week’s news is the Woolard Review.
Debt news
Review into change and innovation in the unsecured credit market (the Woolard Review) FCA: A report by the FCA’s previous CEO. Demanding regulation of BNPL such as Klarna made the most headlines, but it’s a lot wider-ranging eg sections on debt advice.
- Five reasons why the Woolard review hits all the right notes Money Advice Trust.
IVAs – Woolard says the market “is broken”:
- Unscrupulous advertisers and firms after thousands of pounds in fees are pushing Britons into debt solutions they can’t afford Mail: High fees, misleading advertising, raising failure rates, IVA numbers very high in 2020 compared to DROs and bankruptcy – a good look at the problem.
- Copycat debt firms ‘tricking’ struggling Brits into paying to fix their finances Sun
BNPL – Woolard says needs to be FCA regulated:
- BNPL is in trouble but young shoppers still urgently need your help Young Money blog: how this form of insta-credit can possibly survive the new rules coming its way.
- Buy now, pay later firms such as Klarna face stricter controls BBC
- Take ‘exploitative’ buy now, pay later services off your websites and don’t let shoppers use debt financing by default, MPs ask retailers Mail
- ‘Buy now pay later’ lenders brace for new regime FT (paywall) One big bank told the regulator that, out of its customers that had made a payment to two major BNPL providers in November, a tenth exceeded their overdraft allowance in the same month.
Mounting debt problems:
- Benefit claimants face mounting debt burden, says Resolution Foundation Guardian: Almost a third (31%) of new claimant families had either acquired new debts or gone further into debt, while about 21% had fallen behind on paying essential (non-housing) bills.
- Two thirds of London housing association’s Universal Credit claimants behind on rent ITV the experience of the majority of people making a claim shows that the system is still failing to provide adequate support.
- Covid: ‘Debt time-bomb’ awaiting thousands of Welsh households BBC.
Gender inequality and finance: Are women more likely to suffer with debt? The Up Coming: Interesting article with lots of stats and a badly misleading bit at the end about IVAs and DROs…
Amigo’s Scheme – key points to think about my article.
Benefits & other news
Gambling:
- The ‘fun’ can stop with unemployment, ill-health and even death Oxford Uni: Large scale research, following 100,00 people “the top 1% of gamblers surveyed spent 58% of their income and one in ten are spending 8% on the habit”.
- ‘I gambled our house away without telling my partner’ BBC: When Michelle gathered all the data, she found she had lost just short of £550,000 in less than three years.
What continuous payments are draining your account? It’s hard to tell and even harder to stop – that’s why we demand action Mail: The payments are hard to spot on a bank statement because unlike direct debits and standing orders, they are not marked as a regular transaction.
Tom G says
It’s good to see the government acting on BNPL and also the response from the Klarna CEO welcoming regulation. We expect that something similar can and should happen with bailiffs but the process seems to be much slower moving. At least with BNPL the government appear to have learnt lessons quickly from Wonga, which was once feted as a tech unicorn.