My pick of last week’s news is the Woolard Review.
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
- 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.