All posts by Mark Scott

About Mark Scott

Is the Company Director of Swift Money Limited. He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

DWP Survey Shows Approx. 50% of UC Claimants Struggling to Pay Bills

According to a DWP (Department for Work & Pensions) survey done recently, approximately 50% of Universal Credit (UC) claimants are struggling to pay household bills. This finding can be found in a detailed report that has sparked outrage. [1] Many charities are demanding reform following the shocking findings on UC which combines six benefits (Housing Benefit, Income Based Jobseeker’s Allowance, Child Tax Credit, Working TaxCredit, Income Support and Income-based Employment & Support Allowance) into a single monthly payment. Universal Credit was established in 2013 as a social security benefit replacing six benefits and tax credits.

Over 800,000 new claimants are on UC. Existing claimants will commence movement to UC in 2019. Tory ministers have been on record stating that UC is fairer and ensures work pays yet the survey shows that 44% of claimants fall behind with their bills, keep up but face constant struggles or experience serious financial difficulties 3 months into their claim.

The figure isn’t any better eight to nine months into a UC claim considering it reduces to 40%, a mere 4% reduction.

A further 28-32% of claimants stated that they face challenges with household bills occasionally leaving just 25% as the number of claimants with no difficulties.

In one group, 33% of claimants confessed to borrowing money from family and friends while 11% relied on short-term loans like overdrafts. Others admitted to using charities, payday loan companies as well as doorstep lenders to survive.

A record 44% of claimants (in the first wave survey) admitted to struggling to pay utility bills. Meanwhile, 35 to 36% have housing cost arrears, and for 44% of those people who had arrears, the arrears increased significantly by the time they were 8 or 9 months into their UC claim.

According to the C.E.O. of Child Poverty Action Group, Alison Garnham, these figures are a testament that Universal Credit has failed.

However, Work and Pensions Secretary Esther McVey is of a slightly different opinion. She insists UC will make work pay. According to Mc Vey, it is evident that many people who are months into a claim are left with little to live on but Universal Credit had a strong poverty reduction potential which has been affected by big funding reductions compromising its ability to achieve original aims. Mc Vey admits there are faults in the UC design that have been left uncorrected and goes further to state that the benefit will continue to fail if the funding isn’t restored and the original design re-visited.

IFF Research conducted the DWP (Department for Work & Pensions) survey which involved 4202 people from March-September 2017.

The survey interviewed 2194 people in the 1st wave, 42% of whom offered to be questioned in the 2nd wave alongside 1422 other claimants chosen for the 2nd wave.

The survey findings also indicated that approximately 43% of the claimants were in need of support or help with their UC claim, i.e., how to register online. The findings also indicated a need to improve the scope of knowledge of Universal Credit. Authors admitted to lacking knowledge on some matters since only 51% understood that every hour worked will leave them in a better position.

Authors admitted there is “scope to improve knowledge of UC” after only 51% knew every hour they work would leave them better off.

The survey also showed some positive employment outcome with statistics such as an increase in the percentage of paid work rose from 23 to 40% at the beginning of a UC claim to eight months in.

According to the DWP, the survey indicates that most claimants have no problem managing their money with approximately 67% saying they are confident with their UC payments.

The survey which was done between March and September last year was done before any changes were made to the autumn budget.

Some changes have been made including the abolition of waiting days which has made all advance payments available immediately from day one. There has also been an introduction of a two-week additional housing cost support meant for people joining UC from Housing Benefit. The findings in the DWP report were used as a basis for introducing these changes.

The DWP is also planning to increase funding on budgeting advice as well as digital support up to £200 million making these services available to people who need them.

However, as long as claimants continue to depend on payday loans among other types of short term loans, UC has a long way to go.

References https://bit.ly/2JyLYF5

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

Ireland Cost of Living 14% Higher Than UK According to Recent Study

A new study has revealed that Irish people pay 14% more than UK residents for rent and clothes causing consumers to suffer more. Irish consumers are paying more for groceries, rent, fashion and cars among many other household goods and services according to a Provident Personal Credit study.

This is despite the small difference in wages between Irish people and their neighbours. The average wage in Ireland is £1,920.51 which is £107 more than in the UK. This slightly higher wage isn’t enough to cater for a higher cost of goods and services.

Key concerns: Rent, Fashion, Cars, and Fuel

Rent is a massive problem in Ireland given Irish people pay 51 to 53 percent more than their counterparts in the UK. The ever-rising cost of rent has caused many Irish residents into homeless shelters as the Irish government comes under immense pressure to provide a solution to the problem.

Although London is considered one of the most expensive places to live in the UK, Ireland is more expensive, and the costs extend to clothing as well. Fashion lovers in Ireland also have to pay more for clothes than their UK counterparts.

A pair of jeans costs £64.80 which is £8.40 more than the cost of a similar pair in the UK. Shoes aren’t cheap either with a pair of mid-range Nike running shoes costing £68.52 which is £8.56 more than the cost of the same type of shoes in the United Kingdom.

Even cars are more expensive in Ireland. A Volkswagen Golf (e.41) costs £18,000 in the UK while Irish residents have to pay £21,000 for the same car. What’s more interesting is; the cost of maintaining cars is the same whether you live in the UK or Ireland. Fuel is more expensive although the difference is small. The average cost of petrol in Ireland is £1.18 per litre which is about the same in the UK.

Consumer Association of Ireland (CAI) sentiments

According to the C.E.O of the CAI, Dermot Jewell, the price differences between essential goods is depressing. Jewell states it is difficult to comprehend why Ireland is still paying way above the odds compared to its nearest neighbour. He states that there are other players in the market yet the Irish people keep paying more for essentials. Jewell blames overseas players for their refusal to break down and offer price structure analysis and the reasons justifying charging Ireland residents so much more.

Coping with a high cost of living

When essentials become expensive, it is easy to plunge into debt. Many people in Ireland are already dependent on payday loans among other types of short- term loans for survival. Here are useful tips to help you reduce over-dependence on payday loans, overdraft loans, credit card loans, etc.

• Buy in bulk: You can enjoy huge discounts if you buy household goods in bulk. Although you need a considerable amount of money to do this in the beginning, it is possible to shield yourself from high prices when you buy things like clothes and household goods in bulk. This tip can also work for fuel.

• Compare prices: You’ll also need to do a bit more research before buying anything. Although the cost of living in Ireland is high, it is still possible to find stores which have better prices than others. It might be a bit more work on your side, however, this tip can save you thousands of pounds yearly. Furthermore, it is easier to compare prices today considering most companies have an online presence and almost everything can be bought online. You just need to go online and compare the prices of clothes in the most popular clothing stores in Ireland to get a good discount.

• Consider savings over loans: It is always cheaper and more convenient to use your savings instead of taking a payday loan or other short term loans. If you haven’t set up a savings account, do so immediately. Over-reliance on debt can make life unbearable especially when you are living in a place like Ireland with a skyrocketing cost of living.

• Consider home ownership over renting: When the cost of renting a home is too high, it is advisable to think of becoming a homeowner. There are many home- ownership programs in Ireland including rent-to-own that make the cost of rent more bearable since your payments go into owning the home.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

Fresh Calls for Tighter Lender Regulation as Credit Costs Rise

UK borrowers are paying way more than expected for personal loans as the difference between the actual and advertised rates rises. Leading lenders in the UK are currently advertising fixed rates on typical loans at 2.8 to 4.9%, but in reality, borrowers are paying an average APR of 7.3%. This translates to approximately £204 million more every year according to the Centre for Economic & Business Research (CEBR) which discovered that these representative rates have been unrepresentative for years (since 2011).

Critics of this practice have boosted their calls for tighter legislation over marketing using these misleading rates after a survey discovered over 80% of applicants trust the advertised rate. According to current rules, at least 51% of borrowers must be offered a rate for it to be advertised. Considering personal borrowing amounts to more than £209 billion (compared to £196 billion same time last year), UK borrowers are feeling increasingly dissatisfied, mislead and confused according to industry commentators.

Shawbrook Bank, which co-authored the report, warns that this lack of transparency makes it impossible for borrowers to make informed decisions on affordability from the onset of the loan application process. Lack of transparency has in fact contributed to many people taking larger loans than they would otherwise take if they knew the actual rate initially.

In fact, this tendency can be linked to increased cases of defaults according to the CEBR research. Since the first quarter of 2016, lenders have recorded a rise in default rates for unsecured consumer loans in a record 8 out of the last 9 quarters. This clearly shows the importance of giving borrowers accurate information before they apply for loans. The research has come out immediately after the regulator reviewed the UK’s high-cost credit market last week.

There are millions of Britons depending on doorstep lenders, overdrafts, payday loans, catalogues, hire-purchase as well as rent-to-own agreements among many other forms of short-term loans in the UK. The FCA is expected to take tough action on lenders found culpable of misleading borrowers and charging high interest rates on a variety of financial products including overdrafts used by approximately 19 million Britons.

The proposals which include capping the total cost of hire purchase products and banning overdraft fees will be subject to consultation for some time. If implemented, the proposals could save UK consumers approximately £200 million every year.

According to Rachel Springall, a finance specialist at moneyfacts.co.uk, the FCA’s proposals to deal with lenders overcharging customers for loan products like overdrafts is welcome since the move would see borrowers enjoy savings amounting to £140 million per year.

Springall acknowledges that many banks have adjusted overdraft structures over the years by abolishing interest charges and introducing flat fees. Although the move has made it easier for customers to calculate charges, flat fees have turned out to be more expensive than interest on an overdrawn balance. The average usage fee for arranged overdrafts has increased to £6.75 (from £4.69) five years ago.

For instance, customers who had overdrawn £300 for two weeks on a Santander Everyday current account would have to pay £14 as charges (£1 every day). However, the same customer with a first direct 1st account would pay £0.33 only in fees based on a 15.9% EAR.

According to Springall, the complex process of comparing deals tends to put some customers off making it hard to make overdraft fees fairer. So, customers who feel they are getting bad deals should shop around for the best short-term loan deals without forgetting about their long-term borrowing needs.

However, some critics argue that the FCA needs to do much more considering StepChange Debt Charity statistics show a record 1.4 million British households used high-cost credit to pay for essential goods last year.

According to the head of Which? Money, Gareth Shaw, unarranged overdraft charges tend to spiral up to seven times more in charges compared to payday loans making it wrong for the regulator to continue delaying action.

Shaw continues to stress on the fact that the FCA expressed concerns on the way overdrafts work last summer but is yet to take action one year later. Shaw states that the government must intervene to make sure unarranged overdraft fees are matched with fees charged on arranged overdrafts. This should take place since many people are suffering because of these rip-off fees yet the FCA continues to delay action.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

When Your Creditors Takes You to Court, What Do You Do?

Your creditors can take you to court (make a claim) if you don’t repay your loan or honour any other terms of your repayment agreement. You shouldn’t ignore such a situation. In fact, you should know how to respond in advance.

Taking action swiftly will stop the situation from escalating. Failing to take the necessary action can result in more debt. You could also lose your home among other possessions like a vehicle.

First and foremost, it’s worth noting that such cases (i.e., defaulting on bank debt, credit card debt, payday loans, building society loans, etc.) usually end up in a county court. When your creditor goes to court, an order known as a CCJ (County Court Judgment) is granted. If you don’t agree with the order, i.e., there is a mistake, and you don’t owe your creditor, you need to fill out some forms from the court. The same applies if you are not in a position to pay back.

Creditor action

Before you are taken to court by a creditor, they are required to send a warning letter informing you that they will take legal action if you don’t pay back within a specified period. If you don’t get a warning letter, there is a basis to stop legal action.

Your creditor is required to try and sort out the issue with you before going to court so it is important to do whatever you can to reach an amicable solution before it’s too late.

Claim form

When court action commences, you will receive a claim form as well as a response pack from the court. Claim forms have information about the debt such as how much you owe. The response pack has several forms such as forms to accept or deny you owe money. If you deny, there is a form you must send back confirming you received the documents.

You should read these documents carefully and act accordingly observing the stated deadline otherwise a court order will be issued. When this happens, you must pay back the amount your creditor claims. This applies even if you deny you owe the creditor anything. In most cases, you will also have to incur additional costs like interest.

A typical claim form highlights how much the creditor is claiming plus interest if they are interested in claiming.

An authentic claim form should have; a claim number and official court stamp. If you are presented with a fake claim form, you have grounds to launch a harassment case against your creditor. Consult a debt advisor for guidance on how to go about harassment by creditors.

You can find more details about the claim in a document known as particulars of claim which is usually sent with the claim form or separately within 14 days after the claim form is sent.

Response pack

Creditors hardly chase you for loans you haven’t taken so if you accept your creditors’ claims, you will need to fill and admission form. If not, fill a defence form. You also need to fill a form known as acknowledgement of service confirming you received the documents. Responses must be forwarded within 14 days or 28 days if you need more time to fill the defence form. You can request for more time in the acknowledgement of service.

If you accept your creditor’s claim, it is advisable to contact them and try to get an out-of-court agreement. This option is cheaper for you. However, you are still required to fill and return the court documents. If you need help responding, the UK has some reputable free debt advice services you can use like https://www.citizensadvice.org.uk.

Remember to fill the admission form, detail your financial situation and send it to your creditor (not the court) if you accept you owe the amount stated. Also, make a copy of your admission form for record keeping.

Making an offer

When making an offer, state how much money you can afford per instalment as well as when you will pay each instalment. If your creditor agrees, you can ask the court to prepare an order involving a judge or without a hearing.

If your creditor declines your offer, a judge or court official will make a fair decision without a court hearing in most cases. You can ask for the case to be re- determined if you are not happy with the final verdict. This must be done within 14 days.

In cases where there is no repayment offer, the creditor decides the amount as well as the time you should pay. They can even demand the entire amount immediately. Most orders are public knowledge so it can be difficult securing loans in the future.

If you owe less than stated

If you own a fraction of the money in the claim, you can accept you owe (some money) but disagree on the amount. In such a case you must fill the admission and defence form detailing your issues with the amount and send the documents to court. The court will decide on the way forward through a hearing.

If you don’t owe any money

If you don’t owe anything, complete the defence form highlighting your reasons. You should take this option if you have evidence. It is advisable to seek debt and legal advice to come up with compelling reasons.

There are free debt advice services in the UK. Although you should take out credit card loans, payday loans, overdraft loans etc., that you can pay back comfortably, defaulting isn’t the end of the world. You just need to understand your options when your creditors take legal action.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

What Happens to Credit Card Debt and Other Debt When You Die?

Are your credit card debts cancelled when you die or do they become the responsibility of your loved ones? This is a very important question, yet many credit card holders don’t know the answer. Here’s what you need to know.

According to Andrew Shaw, StepChange Debt Charity’s debt advice policy coordinator, the rules vary depending on a number of factors.

If you live in England and Wales, for instance, your debts can “die” with you in some cases. Sometimes creditors can write off debt belonging to deceased individuals or simply stop pursuing such debt; however, aren’t obligated by law to do so.

Also, some alternatives may be addressed in insurance policies. For instance, if the deceased has a policy that covers outstanding debt if they die, such policies can take care of credit card debt among any other debt the policyholder may have.

It’s also a matter of the type of debt. If the credit card debt has joint names, the responsibility of paying the debt is automatically passed on to the other person i.e., surviving account holder. However, most credit cards are issued for individual names.

Outstanding debt owned by a person when they die can also be repaid using proceeds of their estate. This is usually done in a probate process. If the money isn’t enough to repay the debt/s or the deceased estate is insolvent, a trustee is usually appointed to share the proceeds fairly among all creditors.

A creditor or representative of the deceased can get an insolvency administration order. In case the deceased has jointly owned property, proceeds of the property are shared depending on the nature of the joint ownership. If all parties had equal ownership, the property is transferred to the surviving owner and creditors can’t force a sale. However, the surviving person can be obligated to pay an amount equal to the deceased person’s shares if there is an insolvency administration order.

Creditors can force a sale to recover their money if the joint owners owned separate shares i.e. tenants in common. The shares of the deceased are treated as their estate in such a case.

If you think your home is at risk because of debt accumulated by a deceased joint owner, seek legal advice immediately. After the estate is dealt with, relatives of the deceased are not responsible for any outstanding debt.

Emma Gunn’s take

According to Emma Gunn of ThisisMoney.co.uk, family members should take some steps when a loved one passes on to avoid confusion with lenders as well as help settle any liable outstanding debt smoothly.

You’ve probably heard of companies or creditors who keep sending bills to deceased persons or fail to terminate accounts and then charge deceased persons late fees/penalties. Some creditors go as far as harassing loved ones.

To avoid such problems, it’s important for outstanding debt or credit contracts of loved ones to be listed. Contacts of banks/lenders should also be known in advance. Doing this is important when it comes to managing mortgage debt, credit card debt and student loans among other debt after the death of a loved one. The information should extend to insurance, savings and pension information to ensure there are no late fees among other charges added to existing debt or bills.

In most cases, you need documentation such as a death certificate to stop charges/fees, so it’s important to take extra copies when you register the death. You should also record when you contact creditors/banks, who you spoke with and file any correspondence in case there is a dispute in the future.

Remember to include utility companies in the list from mobile phone contracts to energy bills. Some utility companies don’t cancel contracts, but it’s worth asking. There may be an outstanding balance or due payments that can be deducted from the estate.

As mentioned above, the rules change for joint bank accounts among other joint credit accounts like mortgages or loans. Your partner may/may not be held jointly liable when you die.

The debt may be split, or he/she may be wholly liable. The key is; contacting creditors immediately. If you are struggling with payments, let the creditors know. Most will be willing to create a new repayment plan or offer repayment holidays.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

What is an IVA? What You Need to Know

What is an IVA?

An IVA (Individual Voluntary Arrangement) can be defined as a formal legally binding agreement made between an individual and creditors. The agreement highlights how a person is required to pay back their creditors. Since they are formal and legal, they must be approved by a court. IVAs can be flexible enough to suit the needs of the person who is in debt. However, they are generally expensive. An IVA can also attract some risks.

How an IVA works

IVAs are a form of insolvency like bankruptcy although they are different in many ways. For instance, an IVA must be prepared by an insolvency practitioner (a qualified person) who may be an accountant or lawyer.

Insolvency practitioners render their services at a fee which may vary from one practitioner to another. They deal with creditors on behalf of their clients for the entire IVA period.

Individuals who decide to get IVAs work out repayment plans with their insolvency practitioners. The repayment plan is then presented to creditors. If they agree to all the details in the plan, the agreement becomes valid, and all parties must adhere to it.

You must make monthly repayments as agreed. The money should be sent to the insolvency practitioner who then distributes the money to creditors as agreed. A portion of the monthly repayments is usually deducted by the insolvency practitioner as fees. It’s advisable to find out what your insolvency practitioner will

charge you before getting into an IVA. As mentioned above, some practitioners charge more than others.

When can you take an IVA?

IVAs can be taken to repay a variety of common debts ranging from; overdrafts and catalogue debts to personal loans, rent arrears or mortgage shortfalls. You can also consider taking an IVA to help you with your tax debt i.e., council tax arrears, income tax, national insurance contributions, court fines, student loans, etc. You can get a conclusive list of all the debt covered by IVAs in the Citizens Advice official website. [1]

Who can take an individual voluntary agreement?

You need to be in debt to consider taking an IVA given IVAs are necessary for lessening a person’s debt burden. What’s more; you need some spare income every month (at least £100). Most creditors don’t accept IVAs with payments less than £100. If you have more than one debt, you’ll need more money. However, there are exceptions to this if you have something valuable you can sell. Many creditors will overlook the amount of spare income or regular income you have if you own a valuable asset which you can sell and repay your debt periodically or with a lump sum. In a nutshell, anyone with debt burden and some regular income or valuable asset can qualify for an IVA.

Is an IVA a good option for you?

IVAs can be flexible allowing you some much needed time to repay multiple debts. You can reduce your monthly debt repayment by as much as 70% using an IVA. The agreement can also offer you some much-needed protection against creditor actions such as auctioning your property, petitioning for bankruptcy, etc.

However, they are usually expensive in the long-term and tend to come with other cons. For instance, you may not be able to save money or make important contributions like pension payments during the duration of the agreement. You may also be forced to re-mortgage your home/use any equity. An IVA can also affect your ability to get another job since IVAs are public. Anyone including potential employers can get access to your IVA. An IVA also appears on a

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person’s credit report for years (usually six years) which can make it hard to get loans in the future. Last but not least, your IVA may fail if your circumstances keep changing and you struggle making repayments. You must consider all the above before deciding whether or not an IVA is a good option for you.

What next after an IVA?

Most IVAs last for 5 to 6 years although the period can vary and usually ends after all the debt is settled. Once an IVA ends, the insolvency practitioner is supposed to issue a completion certificate. You should ask for one. The practitioner should also ensure your IVA record is removed from the insolvency register.

Important considerations

You should come up with a detailed budget before taking an IVA to ensure you can repay your preferred amount comfortably. It’s also advisable to take time and choose a reputable IVA provider to avoid high fees. A reputable provider will also ensure you get the best possible terms with your creditors.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

A Quick Guide to UK Pensions

Building your pension fund is vital for retirement especially if you want to avoid relying on short-term loans like payday loans later in life. Here is a quick guide to UK pensions.

1. State pension

Most people in the UK get some state pension. This type of pension is paid by the state or government. You gain entitlement to a state pension if you have been making national insurance contributions partly or throughout your working life. State pension offers the pensioner a secure source of income for life. The pension usually increases on a yearly basis based on the inflation rate. Although state pension meant is for individuals who have been working and contributing, you can qualify for the pension if you claim certain benefits or when you are bringing up children.

Rate

Since April 2016, the UK state pension was set to a flat rate. For the 2018/2019 tax year, the flat rate is £164.35 a week. However, a person can qualify for more if they are entitled to additional state pension. The entitlement is subject to the previous system (before April 2016). A person can also receive less when they are “contracted out” of additional state pension.

Qualification

To qualify for full state pension, you require 35-years national insurance (NI) record. To be eligible for any state pension, you require at least 10 years on your NI record.

Claiming

You can claim state pension when you are just about to reach state pension age (4 months before). You can check your state pension age here: https://www.gov.uk/state-pension-age.

You can also defer your pension by doing nothing. If you don’t claim state pension, it stays intact until you claim. The pension increases by 1% every 9 weeks you defer or approximately 5.8% per year. The increase is paid together with regular pension payments when you claim.

2. Defined benefit pension

If you have been working for a large organization or for the government/public sector, you most likely have a DB pension. Defined benefit pension is salary- related. The pension pays a secure income for a lifetime which increases every year. The amount of money you get in a DB pension is dictated by factors such as years you have contributed to the scheme as well as your salary during that period. In regards to salary, the pension calculation can consider the average career pay or your pay at retirement.

Claiming

You can claim your DB pension when you attain the normal retirement age (65 years) or earlier depending on the type of scheme although this may reduce the amount you get significantly.

When you claim your pension, you can take a portion tax-free. The pension scheme rules dictate the amount you take although you can take approximately 25% of the total pension benefits as a tax-free sum. As mentioned above, claiming can reduce the amount you receive significantly so if you must claim, it is recommendable to claim a lower amount.

You can also transfer your DB pension to a scheme that allows you more flexible access. Although this option is ideal when you want to access the pension sum at will to avoid taking out short-term loans like payday loans during emergencies, you give up some benefits by choosing this option.

You should speak to an FCA regulated financial adviser before making such a decision since some pension schemes may be scams.

3. Defined contribution pension

This type of pension scheme is built up after which a retirement income is drawn. The pension amount is dictated by how your investments perform, the charges you pay as well as the amount you/your employer contributes. Personal, workplace and stakeholder pension schemes are part of defined contribution pensions.

You can what you like with your defined contribution pension after reaching 55 years old. However, it is better to let your pension amount build up for you to have more money to spend during retirement. You should contribute optimally and allow your pension to build up until you retire.

The above guide summarises UK pension basics. Understanding the types of pensions and your choices among other information is important when you want to make better decisions for your retirement. Planning for the future early can help you avoid short-term loan problems which are common in the UK today. To learn more about pensions, you can seek financial advice from FCA-registered financial advisers like https://www.moneyadviceservice.org.uk who offer free retirement planning advice.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.

Sham UK Payday Loan Companies Con Vulnerable Borrowers £3.5 m Yearly

UK watchdogs have launched an investigation involving over 200 lenders in an effort to nab a large network of fraudsters that has been targeting vulnerable borrowers in the UK.

One such borrower, Peter Elliot aged 75 was conned £200 as he tried to hunt for a £1000 loan to go for a Christmas trip.

According to a Sunday People investigation, bogus payday loan companies in the UK are targeting the elderly and vulnerable conning them approximately £3.5 Million a Year.

According to the probe, the conmen offer short-term loans to old and desperate people but demand upfront payment (to act as insurance) before issuing the loan. The cons simply pocket the upfront payment without issuing any loan leaving their victims hundreds of pounds poorer. They have concealed addresses hosted abroad and bearing details cloned from respectable institutions operating in the UK.

One popular scam involves asking unsuspecting victims to purchase iTunes vouchers and send the redemption code as insurance.

Peter Elliot was a victim of the iTunes Voucher scam. The scammers promised him a £1000 loan if he bought a £200 iTunes voucher as insurance for the loan. The crooks use the voucher codes to purchase goods or sell the codes online. Peter Elliot, a dad of six, was targeted as he was looking for a short-term loan to go and visit friends during Christmas.

He handed over iTunes vouchers worth over £200 but got nothing in return. The retiree from Mexborough, Doncaster couldn’t believe he had been scammed. The scammers were so friendly and charming he couldn’t believe they conned people. Elliot admitted to feeling stupid after he was conned and blames it on being vulnerable.

In April 2018, the FCA issued an alert on loan fraud stating unsuspecting borrowers were falling for fee scams amounting to £3.5million per year. The regulator claimed incidences of fraud had increased by 44% since 2016. In 2017 alone, there were more than 4,700 loan fee swindles reported to Action Fraud.

227 enquires have been launched to investigate fraudulent lenders since 2015. According to an Action Fraud spokesman, any person required to pay upfront fees to access loans or credit services is at risk of falling prey to loan fee fraudsters. Research shows that loan fee scammers target financially vulnerable individuals who are desperate to get loans.

Research also shows that most loan fee fraud victims are 38 and above with low incomes, low credit ratings and limited access to typical credit.

Action Fraud assesses all loan fee fraud reports received and in most cases, takes action against entities breaching the watchdog’s rules.

Precautions to take

According to Resolver.co.uk expert, Martyn James, scammers emerge everywhere when money is tight. According to Martyn James, it is easier to con a person who is desperate for money because they are willing to do more.

James advices borrowers to sick to FCA regulated firms since it is easy to launch a complaint via the financial ombudsman if the regulated firm you are dealing with fails to keep their end of the deal. It is crucial to note that there are some FCA-regulated financial services firms which ask for upfront fees (approximately £50) before offering credit broking facilities. So, not all firms which ask for upfront fees are fraudulent. It is up to a borrower to choose the firm they want to deal with although; it is advisable to avoid paying upfront fees.

In case you find yourself a victim of loan fee scams, you should act immediately. If you have transferred money via your bank, call your bank immediately and request for a recall of the funds. If you have already bought vouchers, contact the firm which supplies the voucher immediately and request that the code is suspended or cancelled and claim a refund. If the firm refuses to cancel the code, launch a complaint against the firm immediately.

Loan related fraud must be acted upon immediately if you wish to get a favourable outcome. Even if you have already been conned, the least you can do is launch a complaint. Notifying the relevant authority can save someone else from a similar fraudulent scheme. It can also help apprehend the fraudsters. It is not advisable to accept and move on although most victims of fraud don’t report to avoid embarrassment.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.