Category Archives: Money

Controversial Loans Tycoon Set to Pocket £350m After LSE Listing

Controversial short-term loan tycoon James Benamor is set to be the biggest individual beneficiary of exorbitant short-term loans fees in the UK when his firm, Amigo Loans lists on the London Stock Exchange.

Benamor has been accused of being a loan shark operating on the “right side” of the law. His firm, Amigo loans is guilty of charging hard-up customers interest rates up to 50%. The businessman is set to pocket over 350 million pounds when his firm lists on the LSE.

Amigo Loans are marketed as a better alternative to payday loans in the UK. The loans are advertised on radio and TV among other media. They target low- income individuals with poor credit and high debt levels.

Amigo recorded a £72 million pre-tax profit last year. The lender’s loan book grew from £266 million to £647 million last year (2016 to 2017). This figure translates to a 90% market share in the UK guarantor loans market. Amigo servers 182,000 borrowers. A record £48 million in loans were taken by existing customers who had existing loans according to the latest financial results.

Amigo’s profits recently and over the years have helped Benamor, 41, amass approximately £380 million.
Benamor who is a British businessman of Tunisian origin started Richmond Group, a money lending company at 21 in his kitchen in Bournemouth. Benamor began issuing loans to individuals who had been denied credit by mainstream lenders.

Back in 2009, an investigation carried out by BBC accused Benamor of profiting by misleading desperate borrowers. A Richmond Group subsidiary offered to give loans to individuals with poor credit in exchange for £50 in fees, but in most cases, customers received a list of lenders without receiving any loans. The firm, Post Net, was found guilty of misleading desperate borrowers by falsely guaranteeing loans. This was according to a Fair Trading statement issued on the matter.

Nevertheless, Benamor has continued presenting himself as an honest businessman. His social media profiles (Facebook) contain very little evidence of his fortune apart from a few pictures of him and his family on exotic holidays.

Benamor has shared about his charitable ventures which include climbing Mt. Kilimanjaro and funding Education in Africa. There are also pictures of him attending a royal function (hosted by Prince Charles) in March 2018. His employees are also “lucky enough” to enjoy perks like hair styling and massage therapy services as well as use his cars and properties in London, France and Amsterdam.

Benamor has been on record stating that he got into a lot of trouble when he was young having been a drug user. He has also stated he was “a petty criminal” in the past.

The Amigo Difference

Amigo Loans are different from payday loans in that; a borrower needs a guarantor (who could be a friend or family member) before they can qualify for a loan.

This requirement has made it possible for Amigo to offer loans successfully to people who wouldn’t otherwise qualify for loans. Amigo has been able to loan individuals with terrible credit as well as those with “mountains” of debt.

According to consumer champion, Martin Lewis, Amigo adverts stating that their loans are affordable make him feel “slightly sick”.
Stella Creasy is of a similar opinion. The Labour MP has been on record calling for regulators to crack down on legal loan sharks trapping needy borrowers.

The Financial Ombudsman has also linked Amigo loans to unethical lending practices by giving specific examples of how Amigo has been hounding guarantors who include individuals with terminal illness and mental health issues.

According to Amigo’s official website (https://www.amigoloans.co.uk/), the lender charges a 49.9% interest and promises to lend up to £10,000 within a day. The lender also stresses that being unemployed isn’t an obstacle to accessing Amigo Loans.

Although the lender also goes ahead and stresses the fact that Amigo loans are affordable, a customer who borrows £10,000 over 5 years ends up paying £23,715.

Amigo Loans can easily qualify as high-risk loans; however, Amigo is of a contrary opinion.
After announcing intentions to list his firm on the LSE, Benamor stated that his company was a better alternative to payday loan lenders charging ultra-high interest. He stated that the guarantor requirement allows Amigo to offer financing to borrowers who would otherwise be left to borrow less flexible and more expensive forms of loans.

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.

Identifying a Cryptocurrency Scam: Smart ICO Investing

Bitcoin is no longer a dominant cryptocurrency. The cryptocurrency’s dominance is at its lowest level currently at less than 37% against 80% a year ago. [1]New and better cryptocurrencies are coming up every day via Initial Coin Offers (ICOs) which resemble Initial Public Offers for stocks. There are over 1,500 cryptocurrencies currently.

Although Bitcoin was the first cryptocurrency, newer cryptocurrencies have proved to be better in many aspects. In fact, most cryptocurrencies which have eroded Bitcoin’s market share have done so because of solving fundamental problems affecting Bitcoin. The coins have also explored widespread applications of Blockchain technology, the underlying technology behind cryptocurrencies.

The growth of cryptocurrencies can also be linked to the massive profits earned by early adopters. There is a huge appetite for new cryptocurrency offers currently as people look to find the next Bitcoin. This demand has attracted many scammers into the space.

After all, people have proven to be willing to throw money towards highly speculative cryptocurrencies indicating that they may be willing to invest in fraudulent ICOs. If you don’t want to miss out on an opportunity of a lifetime, but you aren’t willing to be scammed, here are some notable tips to consider when you want to identify an ICO scam.

Investigate the team behind the offer

page1image3747184Never buy into any ICO before you investigate the team behind the offer. Focus on the developers as well as the administrative team and keep off ICOs which don’t involve renowned individuals whose background and expertise is verifiable. Many ICO scams feature non-existent founders and project biographies. If you can’t find adequate and verifiable information about the individuals in question on official websites, LinkedIn among other social media sites, don’t invest. The developer and administrative team must be composed of real reputable people. Their capabilities should also measure up to the project otherwise the ICO may be unsuccessful even if it is legitimate.

Read the whitepaper thoroughly

The white paper is the most important document in any ICO. A whitepaper resembles a prospectus. It lets you know the background, strategy, goals, timelines as well as the concerns for implementing a blockchain-related project. A whitepaper will help you gauge if a sound concept backs the offer. You should look out for whitepaper “red flags” such as spelling mistakes, poor concepts and implementation plans, poor sources, etc. Avoid such ICOs as well as those that present legal concerns and lack financial models. You shouldn’t think twice about ICOs without whitepapers.

What’s more: A convincing whitepaper can still be presented by a fraudulent company. PlexCoin is a great example. PlexCoin ICO raised $15+ million but ended up being fraudulent. [2]

Check the token sale

All ICOs depend on token or currency systems to facilitate a crowdfunding process. Legitimate ICOs are characterised by open token sales that are easily accessible to potential investors. You should check the ongoing token sale figures continuously. If the company behind the ICO is making it hard to monitor the progress of the token sale, this is a red flag. Many ICO scams purpose on creating fake urgency. So, avoid ICOs where you can’t verify token sale progress with ease.

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Assess the feasibility of the ICO

Considering there are more than 1500 cryptocurrencies currently, you should focus on offers which have the potential to “beat” their competition. This may appear obvious, but many new cryptocurrency investors fall for coins which are mere duplications of existing coins. Such coins are identical in every way to existing coins with their key focus being raising the initial investment money. The person’s behind such coins have no intention of creating anything of value after the launch.

Although cryptocurrencies have shown massive potential, i.e., you can get rich overnight after making a minimal investment, they tend to be affected by speculation. The most successful offers have been slammed in the past. You should, therefore, focus on investing in ICOs which offer solid opportunities instead of investing for speculative reasons. Spend a lot of time assessing every detail and treat any omissions in the offer as attempts to hide poor models or concepts. If you do the groundwork, cryptocurrencies can offer you passive income enough to avoid overdependence on short term loans like payday loans. You can also get rich in the process.

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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.

Smart Summer Holiday Tips for Parents

Summer is here with us! It’s that time when you need to take a break and soak in the sun, sand, and sea. Whatever your plans are, you need to make some considerations to avoid common mistakes. Summer holidays can be challenging especially when you have kids. Luckily, we have some smart summer tips for parents like you to consider.

No countdowns

We are fond of counting down the days to a holiday. Although many think this is a good practice to get everyone excited about the holiday, countdowns aren’t recommended for kids because they send a distorted message, i.e., they teach kids to focus on future happiness as opposed to current happiness. This shouldn’t be the case. It’s OK to build anticipation about an oncoming holiday; however, talking about what you will do, what it will be like is a better approach to appreciating the present and future moments.

Expensive summer holidays aren’t necessary

You don’t need a costly summer vacation with your family to enjoy the season. In fact, kids don’t really care if you are in the Bahamas or your backyard provided you are spending quality time with them. Happiness is closely related to relationships than money so focus on the memories you will make together during summer as opposed to the money you should spend. It is possible to have a memorable summer with your kids at home this year if funds don’t allow you to travel abroad. You can even travel locally and still have a lot of fun and priceless memories.

Plan meticulously

You’ll need to plan better when you are planning a summer holiday with your kids. Besides making basic travel plans, you need to plan further highlighting the activities you would like to engage in as a family. Creating such plans ensures there is no dull moment. You need to take a pen and paper and brainstorm with your kids about the fun summer activities they would like to engage in. When doing this, incorporate everything together, i.e., play dates and crafts without losing sight of what’s important.

Creating a to-do-list is important, but it can make your kids focus on the activity as opposed to who they will be doing it with. Making such a consideration will help your kids focus on what is really important. Kids prefer parents who can engage them in activities, so you should choose a slightly cluttered environment over a spotless one since it leaves room for you and your kids to engage in enriching activities together.

Don’t agree with all your kids’ requests

Kids can tell when you are in the spirit to attend to all their requests so don’t lose your guard completely. Spoiling your kids is good once in a while but accepting requests made for a lark isn’t a good idea. Remember, kids expect more when you give more so the requests will keep piling up if you don’t get your power back. Furthermore, feeling the pressure to meet all your kids’ demands is among the top reasons why family summer vacations end up being expensive. If you don’t want to survive on payday loans and credit card loans once you are back, make a conscious decision on the levels you are going to go for your kids.

Don’t laze around too much

Although summer is mostly about lazing around all day and soaking in the sun doing nothing for most people, kids need some adventure and physical activity on a daily basis. So, be intentional about adventures and engaging activities to keep your kids centered.

Relax and let go

As mentioned above, you need to plan meticulously, however, don’t be the uptight parent that gets annoyed about little things while on holiday. You are bound to meet many people during your holiday, and some may be annoying. It can also be overwhelming watching your kids in unfamiliar territory but relax and purpose to enjoy your time together as a family.

You don’t have to cringe when you think of traveling with your kids during summer. The holiday doesn’t have to be an expensive affair either that leaves you surviving with payday loans among other types of short term loans when it’s all over. If you take the time to plan everything without losing sight of what really matters, your family will enjoy summer 2018 more than any other summer holiday. As long as you are together as a family immersed in fun activities, summer is bound to be fun without “breaking the bank”.

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.

Bank of England’s Ramsden Hints Interest Rate Hike In August

According to the Bank of England (BOE) deputy governor, the UK economy stands to emerge from economic slowdown as wage pressures increase.

The chances of a rate hike in August are high after a cautious policy setter at the BOE signalled support for increased borrowing costs. According to Sir Dave Ramsden, the UK economy appears to be getting out of an early soft patch at a time when income pressures are mounting. Ramsden who is just one of the two Bank of England monetary policy members to vote against a rate hike last November said that tighter policy is imminent otherwise inflation will surpass the government’s target of 2%.

During the November 2017 monetary policy meeting, Ramsden voted against a 0.25 point increase. He was just one of two members who voted against the increase. With his current sentiments, a rate hike is imminent in August.

Ramsden hinted on a rate hike during a recent speech in London. He stated that the slow growth in income is the main reason he had been taking a wait-and-see approach towards an interest rate hike in November adding that wage growth had been increasing steadily for the past two quarters. In his sentiments, Ramsden stated that the period of unusually slow growth in wages is most likely behind us.

Bank of England decided against an interest rate hike in May despite there being strong indications of a hike. In the weeks before the BOE’s MPC meeting, there was a run of disappointing economic data warranting a hike.

According to Ramsden, the evidence mounting since the last MPC meeting confirms the committee’s view of the economic slowdown being temporary. Although we are still in the second quarter which means it is still early in the data cycle and the last MPC meeting was a month ago, Ramsden feels the data that has been collected suggests the MPC’s interpretation of a temporary economic slowdown between January and March to be true.

The current data shows that consumer credit and consumer confidence has picked. The same applies to retail sales and a number of business surveys including the latest purchasing manager’s index or PMI output balance which represents 80% of the UK economy.

The PMI is calculated after a monthly survey is sent and filled by senior executives the largest companies in the UK. The survey targets data on new orders, production, inventory levels, employment and supplier deliveries. The PMI offers valuable information on the current business conditions according to company decision makers, purchasing managers and analysts. A high PMI is good for business and the overall economy. According to Ramsden, the May PMI was in line with expectations.

Looking forward, his expectations for the UK economy are also within the expectation of the Monetary Policy Committee’s best collective judgment expressed

in the latest inflation report forecasts. The UK’s global growth is intact although it looks less rosy than before. Ramsden expresses similar sentiments on the labour market by describing it as robust.

He expects the GDP growth to become steady although the pace and demand for goods and services continue to move from consumption to trade and investment.

Ramsden doesn’t see any problem with the current pace of growth since it would still be adequate to surpass the Bank of England’s new “lower speed limit” which was revised downwards because of the poor state of productivity performance of the UK’s economy ten years after the financial crisis. Unemployment is set to decrease to 4 percent, and a tiny margin of demand will open up.

In his speech, Ramsden added that without a 0.75 point rate rise expected over the next 3 years by the global financial markets, inflation is expected to remain around 2.4% which would be materially above the target which doesn’t seem like a desirable outcome. An inflation rate that is continuously above target coupled with prolonged periods of excess demand translates to the MPC’s failure to meet the remit.

Effects

Interest rate hikes tend to increase the cost of credit as lenders start charging borrowers more for loans. You should expect to pay slightly more interest on your payday loans, overdrafts, personal loans, mortgages among other types of loans if the BOE hikes the rate in August. A rate hike will, however, keep inflation levels in check as well as increase the value of the pound against major currencies.

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.