Category Archives: Money

UK Payday Loan Lenders Offering Customers up To £1,000 for Referrals

Payday loan companies like BrightHouse and Amigo Loans among many others are in the spotlight for offering their customers monetary incentives for recommendations. As the rules and regulations surrounding marketing payday loans tighten, some payday loan companies in the UK are resulting to using what many may consider to be unethical marketing practices.

The latest consumer watchdog reports show that some payday loan companies are offering their customers up to £1,000 if they successfully convince their friends and family members to take high-interest loans. Lenders such as BrightHouse are on the spot for offering £220 to customers who introduce their family members and friends successfully. Consumer watchdogs have termed this incentive ”cynical”. Amigo customers are earning up to £1,000 for making their friends and family members take out £10,000 loans which attract a 50% annual interest rate. BrightHouse which is a popular rent-to-own retailer is offering £220 to customers who convince their friends to take out loans attracting interest rates up to 99.9%.

There are many other lenders guilty of this seemingly unethical practice. Doorstep lender Provident is also paying its customers £30 for referral loans amounting to £100 or more at 535% interest. Loan At Home hasn’t been left behind. The lender is offering £20 or more to customers who promote loans attracting a 433% interest. What’s interesting is; the lenders see nothing wrong with their incentives. When contacted, Loan At Home claims they are happy to offer a ”small” reward to customers who promote them. BrightHouse claims its actions are common among retailers. Amigo is on record insisting their marketing strategy targets a small percentage of loans. Consumer watchdogs are of a contrary opinion. According to Marc Gander, a Consumer Action Group Administrator and Adviser, ”the schemes are bound to attract many people.” Martyn James from resolver.co.uk shares similar sentiments. James sees serious ethics concerns about the payday loan marketing schemes. His sentiments have been repeated by many other consumer watchdogs as well as individuals who are concerned about increasing debt levels in the UK. According to the latest Bank of England statistics, UK households have accumulated unsecured debt amounting to £204billion.

When should you take out a payday loan?

The recent developments have brought into question the circumstances that warrant taking a loan. Although unethical, these schemes may very well be legal exposing many vulnerable borrowers to debt problems. So, how should you protect yourself? The first most important step is understanding when you are supposed to take out a payday loan or any other loan. Never take a loan just because it is available. You need a better reason! For instance, payday loans should be taken by people who have emergency cash needs. If your car has broken down mid-month and you don’t have money for repairs, you can take out a payday loan. Payday loans can also cater for emergency medical expenses among other unexpected monthly expenses as you wait for your salary. If you don’t have any pressing emergency cash need, don’t take out a loan even if it is available to you instantly.

Short term loans spanning for a few months to one year should be taken for reasons such as starting a business. There is a general rule that states you should never use loans to acquire liabilities. A car is a liability if you don’t use it to earn you money. Clothes, shoes, electronics, and furniture are also liabilities in this regard because they don’t earn you any money and they lose value with time. It’s also important to take out loans from responsible lenders only. Responsible short term loan lenders in the UK don’t use unethical loan promotional techniques to lure innocent borrowers into debt. They care about their customers as much as they care about profits.

Reputable payday loan lenders in the UK are registered by the FCA. You can search the FCA’s register (https://register.fca.org.uk/) to ascertain the firm you are dealing with is authorised. Furthermore, authorised firms don’t charge exorbitant fees. It is worth noting the FCA has regulated payday loans tightly in the UK due to past incidences of borrower exploitation. The regulator is in the process of extending its reach to other types of loans. Before there is adequate regulation on all types of loans available in the UK, it is important for borrowers to seek loans for the right reasons and stick to borrowing from reputable lenders and brokers like SwiftMoney.

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.

The FCA Has Published Its Future Approach to Consumers

Back in April 2017, the FCA launched its mission and committed to publishing documents explaining its approach to regulation in-depth. The ”FCA Mission: Our Future Approach to Consumers” is the first of a series of documents explaining the FCA’s approach in more detail.

The FCA mission explained how/why the FCA prioritises, protects and intervenes in financial markets. Its publication was a milestone in the FCA’s efforts to be more transparent about its role and accountability while discharging its mandate. The regulators ”Approach to Customers” is the first of a series of documents. This particular publication explains the FCA’s approach to regulating for customers.

Background FCA Mission:

it’s important to note that the FCA exists to serve the public’s interest as far as financial services are concerned. The regulator does this through regulation. The UK parliament has given the FCA one strategic objective which is; ensuring financial markets function well. The FCA also has three operational objectives. The first one is to secure the relevant protection to consumers of financial services. The FCA is also charged with the responsibility of protecting as well as enhancing integrity in the UK financial system. Lastly, the FCA must ensure fair competition (consumer interests must be protected).

The FCA’s wish list in regards to consumers:

The FCA focuses on seeing financial markets where;

1. There are adequate high-quality financial products and services which meet the needs of consumers.

2. Consumers can buy financial products and services which are sold in a manner that is clear and fair (not misleading).

3. The needs of vulnerable consumers are considered. How was the approach was developed?

Before looking at the core ideas that informed the FCA’s approach to consumers, it’s important to understand how the approach was developed. The FCA’s approach to consumers considered the diverse characteristics of consumers and the external environment where firms and consumers operate. The approach explored vast research as well as the real experiences of 12,865 persons in the regulator’s Financial Lives Survey published on 18th October 2017. Core ideasThe FCA’s approach to consumers is based on the following core ideas;

1. Firm/consumer responsibility – According to the FCA, firms must treat their customers fairly. Financial services firms must provide products and services that customers need. Those products and services must also be marketed and sold in a manner that allows customers to make informed decisions. The FCA acknowledges the fact that some customers may not be able to make the best decisions when choosing products/services. Firms must exercise extreme caution where customers stand to be vulnerable. They should not exploit vulnerable customers in any way. However, the FCA also expects customers to assume reasonable responsibility for decisions made when buying financial products/services.

2. Regulation for vulnerable consumers – The FCA sees a need to have special regulation for vulnerable consumers i.e., consumers who are seriously ill or in financial distress. The FCA expects firms to pay special attention to the signs/indicators of customer vulnerability and have policies to deal with such customers. Firms must ensure vulnerable consumers are protected and helped.

3. Keeping up with changing environments – The FCA acknowledges that changes like new technologies have an impact on how firms and consumers make decisions. As a result, the FCA makes regulation while factoring in consumer needs based on changing circumstances while also ensuring adequate certainty to firms. The regulator uses Data Sciences and behavioural economics to ensure regulation approaches are great today and in the future.

4. Access and Inclusion – The FCA acknowledges the fact that some consumers are unintentionally excluded from enjoying some financial products/services because of their circumstances or specific characteristics. As a result, the regulator seeks to develop strategies for tackling access and inclusion problems. The FCA is working with financial services firms among other industry stakeholders to ensure there is fair access and inclusion. The regulator is also looking at its own rules currently and making efforts to ensure industry players interpret its rules correctly.

5. Delivering better outcomes for consumers – The FCA has a variety of tools it deploys to diagnose as well as remedy all types of ”harm” to guarantee better outcomes for all kinds of consumers. The regulator uses all types of interventions from harder to more prescriptive interventions such as issuing formal communication to imposing new rules. The FCA also uses its convening powers to bring all stakeholders together if need be when there is need to solve issues without formal regulatory intervention. According to Andrew Bailey, the C.E.O. of the FCA, the regulator’s mission is to act in situations where the greatest public value is added.

The FCA’s approach to consumers focuses on how the regulator can offer better consumer outcomes via interventions. The approach also highlights the regulator’s stance in tackling consumer problems. According to Bailey, the regulator will work with the Government and industry stakeholders among other players to address complex consumer issues such as financial exclusion and vulnerability. This is precisely why the regulator has opened consultation on its approach document. The consultation closes on 5th February 2018 after which a final approach will be published.

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.

Consumer Finance Up 3% in September 2017

The latest on consumer finance in the UK According to the latest figures by the FLA (Finance & Leasing Association), consumer finance growth is up by 3 percent in September 2017 compared to the same period last year. Q3 2017 has seen a new business growth of 6% compared to Q3 2016.In September 2017, new business generated by credit cards and personal loans grew by 3% compared to September 2016. Online credit and retail store new business increased by 6% over the same period. Second charge mortgage value (new business) also grew at a similar pace in September 2017. However, new business volumes dropped by 2 percent over the same period.

According to Geraldine Kilkelly, Chief Economist and Head of Research at the FLA, new consumer credit is expected to increase by 3.3% in 2017, a significant drop from the 6.3% growth in 2016. This forecast comes in the wake of subdued consumer confidence and the slowest business growth since April. Consumer confidenceAccording to the most recent Lloyds Bank spending power report, consumer confidence is at the lowest level in 2.5 years (since April 2015). Consumer confidence is a measure of how consumers feel about their current as well as the future state of their finances and economic conditions as a whole.

In the IPSOS MORI monthly survey involving 2000+ UK bank account holders, 61% felt positive about their finances in October, a 3pp drop from 64% the previous month. Consumer confidence is a vital consumer finance metric. The measure is at its lowest level in 30 months. Statistics indicate that there is a huge gap between different age groups. Majority (78%) of individuals over 65 years old are positive about their financial situation compared to 60% of individuals between ages 18 and 24 years and 61% of individuals aged between ages 25 and 34 years. The latest statistics also show that women are less positive than men in regards to consumer confidence, i.e., 58% against 64%. Although we are approaching the festive season which is characterised by overly positive consumer finance metrics (increased borrowing and spending), 38% of individuals in the Ipsos MORI survey are worried about personal spending during Christmas. 13% of individuals in the survey are planning to cut back on typical spending to cater for festive spending.

The number of UK households with comfortable financial situations dropped in October 2017 by two percentage points to 60%. The situation is worse among households with children aged 18 and below. Lloyds Bank customer account data analysis shows that people are spending more on essentials. The latest statistics show a 2% growth in essential consumer spending in October. This represents a 17-month consecutive growth in essential spending with food accounting for approximately 40% of all essential spending.

Fuel spending is also significant according to the Lloyds Bank data analysis with an increase of approximately 5% which represents a 14-month continuous growth. Electricity and gas spending increased by 2.5% from 1% last month. Energy spending has been rising for the 3rd consecutive month after enjoying a continuous decline for three years. According to Robin Bulloch, Lloyds Bank Managing Director, although most people are positive about their finances, there was a significant drop in overall consumer confidence in September 2017. Bulloch attributes the drop to factors like inflation. Since inflation is at a 5-year high, Bulloch states that consumers, more so millennials, have begun to feel the pinch more than everyone else. He doesn’t find it surprising that the UK government reached out more to millennials in this week’s budget. As inflation rises and wages stagnate, UK consumers are being forced to rely on loans. This explains why there are more and more people taking out payday loans, credit cards and other forms of short term loans today. Consumer finance growth isn’t necessarily a good thing if consumer confidence remains low especially among the population that is supposed to drive the economy forward.

Although the budget has some interesting perks that will see minimum wage workers earn more and households save more in taxes, critics argue that the budget perks don’t mean much when you consider inflation. As the cost of essential increases, it is advisable to spend wisely during this festive season. You should stick to affordable goods during this season to avoid starting 2018 in debt. Avoid loans at all cost except for emergencies. Managing your finances is critical during this period since loans are easily accessible now more than ever before and we are approaching a time of the year characterized by overspending.

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.

Global Trends in Financial Services Regulation

Financial sector regulators globally have been taking measures to protect financial services consumers. The FCA in the UK, for instance, has been spearheading financial services regulation in the lending sector to ensure borrowers are safe from unscrupulous lenders.

The FCA’s regulatory reforms started in the payday loan sector and are expected to shift focus to regular banks as the FCA looks to protect all borrowers from unnecessary charges.
While the UK financial services regulator is busy streamlining the financial services industry, countries like Canada among many others are following suit. So what are the global trends being experienced in financial service regulation?

According to the 2017 Global Regulatory Development & Impacts report, global financial services regulation is focusing on; enhancing transparency, imposing statutory best interest on advisors, banning embedded commissions and improving advisory proficiency. The report touches on financial services regulation implemented in 16 countries. There are many variations in the report in regards to the type of financial products under regulation.

The report reveals that there is a special emphasis on restrictions imposed on investment products in some jurisdictions while other jurisdictions focus on almost all financial products ranging from investment to insurance, deposit, and mortgage as well as other commission driven products. Different countries have also approached conflict of interest issues differently indicating differing market characteristics. Nevertheless, something is being done globally in regards to financial services regulation. Below is a summary of the major global trends.

1. Most countries favour enhanced disclosure

Most countries globally are in favour of financial industry players improving disclosure as part of the new financial policies and principles. Out of all the 16 countries reviewed in the Global Regulatory Development & Impacts report, the U.S. is the only country that hasn’t implemented enhanced disclosure initiatives. This trend focuses on ensuring financial industry players offer their customers as much detailed information as possible on fees and commissions to boost transparency.

2. Most countries are in favour of banning embedded commissions although few have taken action

The report also indicates that most countries have reviewed options to ban embedded commissions. This move has been spearheaded by securities regulators in many jurisdictions however, only the U.K., Australia, the Netherlands and South Africa have proceeded to ban embedded commissions. This represents just 13% of the $39.4 trillion global mutual fund assets market. In most of the markets that have implemented the ban, the decision was triggered by local circumstances. In the U.K. for instance, the ban was triggered by scandals in the financial industry. In Australia, the ban was triggered in reaction to the collapse of three main financial industry firms.

In seven countries namely; Germany, Hong Kong, Ireland, Sweden, Denmark, Singapore and New Zealand, the governments as well as securities regulators have ruled out banning embedded commissions entirely but promised to take some action.
Europe, on the other hand, has proposed to restrict independent advisors from receiving commissions. Some analysts, however, claim that these efforts aren’t enough since the independent advice channel is the smallest in the EU funds industry representing 11% of the total assets. Most fund sales in the EU are done via banks where the restrictions don’t apply.

3. Few countries have a best interest standard

Although most countries have expressed interest in creating a fiduciary/best interest standard, Australia happens to be the only country with a broad statutory best interest standard in place for advisors in the retail funds’ industry. The U.S. has made some steps in the right direction as well by adopting a rule which makes the definition of fiduciary more extensive under the employment retirement income security law. This change makes investment advisers offering retirement advice as well as insurance agents and broker-dealers subject to a fiduciary standard. The rule was supposed to come into full effect on 9th June 2017.

Summary

There is a collective global effort to improve financial services regulation. Most countries are however in the formative stages of reform. The U.K. led the way with the FCA by introducing tough regulation against unscrupulous payday loan lenders to protect the huge population dependent on payday loans. The U.K. must do more in regards to regulating other financial industry players.

But let’s not forget most countries including Britain only started making financial services regulatory changes recently. It will take time before the success of ongoing and already established changes is evaluated conclusively globally. In the UK however, the FAMR (Financial Advice Market Review) has already seen major improvements in the financial advice industry. The U.K. now boasts of offering better quality financial advice. However, accessibility is still an issue. There is a need to do more, faster, in the U.K. and the world at large although the world is on the right path in regards to financial services regulation.

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.

6 Non-Financial Habits That Affect Your Finances

You don’t need to misappropriate your finances to find yourself in financial problems. Many factors affect your finances indirectly. Most of these factors revolve around habits. In fact, your habits more so, non-financial habits play a crucial role in your finances. Forget about impulse buying and exceeding credit card limits for a second.

Below are the main non-financial habits that make/break your finances.

1. Planning – You need to be a good planner to get ahead financially.

The rich aren’t just good planners financially but in every aspect of their life. A good planner knows how to manage their time well. Good planners also avoid habits like procrastination which are among the leading causes of failure in life. Planners also have more clarity and direction in life. They are better placed to achieve non-financial goals which contribute to success. If you want to be financially free, start by planning every aspect of your life including your leisure. You will be startled by the amount of money you will start making/saving in the process.

2. Healthy living – Adopting a healthy lifestyle also has a big impact on your finances.

Exercising and maintaining a healthy diet can save you a lot of money considering most health problems are lifestyle-related. Eating right and exercising daily can save you multiple trips to the doctor and pharmacy. Although most people think living a healthy lifestyle is expensive, it is possible to cut costs and save a substantial amount of money. For instance, you don’t need to buy organic vegetables and fruits from an organic grocery shop. You can set up your own kitchen garden with a little money. You can also keep fit without paying for expensive gym membership. You can walk or cycle to work every day and keep fit while saving transport costs. Contrary to popular belief, healthy living is cheaper as long as you plan well.

3. Reading – Reading is another great non-financial habit that affects your finances.

Developing a reading habit is a great way to get financial education. Most people have a hard time becoming financially independent because they are not financially literate. Reading is a great way to learn everything you need to know to improve your finances. The internet has a lot of useful information about money, investments, budgeting, planning, self-discipline, etc. You don’t have to pay a financial adviser to become a good financial planner or investor. Furthermore, reading is a cheap hobby/habit. You can get books for free from your local library. The internet also has affordable books with priceless information that will help you improve your finances directly and indirectly. Avid readers never stop learning about finances and other crucial subjects.

4. Optimism/pessimism – Your attitude about life in general has a significant effect on your finances.

Optimists tend to be more successful in life because they don’t treat challenges as permanent setbacks but important lessons. To be successful in life, you need to have a positive outlook on everything including money. Optimism can be defined as a habit since pessimism comes naturally to many people who face challenges in life. To become successful, you have to believe you have what it takes first and trust the process regardless of the hurdles you find on your way. It’s impossible to work hard when you are a pessimist. Pessimists also have a hard time identifying and seizing opportunities in life.

5. Getting up early – Most successful people are early-risers.

Almost everyone who is someone today attributes this habit to their success. So, why is getting up early a good habit? Well, first and foremost, early-risers have enough time to read, plan their day, exercise and do many other things that have a direct/indirect effect on their finances. Furthermore, most people are more productive in the morning. You are bound to get more things done in the morning than late at night. Most people prefer a head start than trying to catch up. This is precisely why getting up early is such a great habit.

6. Resting – You need to have enough sleep to be productive (at least 6 hours of sleep every day).

Resting also gives you time to think and forge better plans. Fatigue/stress is also a cause for many health problems today. Considering everyone seems to be in a hurry today, resting is another great non-financial habit that has a positive effect on your finances.

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.

9 Great Ways to Save Money in a Fancy Restaurant

The UK is home to some of the best restaurants in the world. Although fine dining experiences bring great pleasure to many, they can be prohibitively expensive if you don’t know how to find great deals. This article is for people who love fancy restaurants and bargains. Here are some great tips to help you save on your next fine dining experience.

1. Use deal websites

The internet is a great place to find deals. You can use websites like Groupon to find great fine dining discounts in the UK. Contrary to popular belief, fancy restaurants also offer great deals through deal websites, so it doesn’t hurt to go online and see what your favourite restaurant is offering. Deal websites are easy to use. You just need to visit the site and search for fancy restaurants near you. Alternatively, you can subscribe for updates to get notifications in your inbox when there are deals that might interest you.

2. Attend restaurant soft opens

New restaurants always have launches packed with great deals. Attending a fancy restaurant soft open is a great way to enjoy fine dining experiences at a bargain since prices are usually subsidised to attract customers. You can even dine for free in dry runs where the kitchen and waiting staff practice food preparation and serving before the official open. This tip is great as long as you have your ears on the ground. You need to keep tabs with the expansion strategy of your favourite restaurant to utilise this tip effectively.

3. Attend restaurant weeks/restaurant festivals

Many cities in the UK including London have special restaurant events such as restaurant weeks where participating restaurants offer amazing deals such as fixed prices (”bottomless meals”) among other incentives to walk-in customers. You just need to find out when the next restaurant event is happening near you to save money dining in a fancy restaurant.

4. Dine during lunch hour

Sometimes it’s as simple as choosing the time you visit a restaurant. Most fine dining restaurants in the UK and around the world have cheaper lunch menus. Although lunch menus may miss some offerings, you are assured of scoring a great meal at a bargain when you fine dine during lunch hours and not dinner time.

5. Avoid alcohol

Alcoholic drinks are usually overpriced in fancy restaurants so avoid alcohol at all costs if you wish to save some money. Ideally, you should focus on the unique food and have drinks elsewhere, later. If you have to take alcohol in a fancy restaurant, ask for the drinks menu first and then choose accordingly.

6. Consider regular menus over specials

Special meals aren’t usually the best priced. Fancy restaurants spend a lot of time and special ingredients coming up with specials. Although specials are meant to offer unique meals, they are also used to maximize profits per plate on simple ingredients or food that needs to be cleared out. So, ”don’t buy the hype”.

7. Ask for deals, gift cards,…

Fancy restaurants offer deals to those who ask. You can ask for gift cards online or in person if you want to treat a special person to a birthday dinner, anniversary dinner, etc. Fancy restaurants have deals for special occasions so don’t be afraid to ask. You can also go as far as asking your waiter for the best value meal/s, wine, etc. You can pay less for wine with a ripped label or a damaged top. Fancy restaurants care a lot about presentation so asking for the ”bin end list” is a great way to enjoy significant savings.

8. Split meals or skip appetisers and desert

You don’t have to take the full course meal. Fancy restaurants are guilty of serving you more food than you can consume. If the restaurant serves big portions, you can split appetizers and dessert with a companion. But don’t forget to ask since some restaurants charge extra for splitting menu items. Alternatively, you can skip appetisers and desert if the offering is nothing out of the norm. For instance, you can have some ice cream and cake when you get back home. Appetisers and desert are usually costly in fine dining establishments. You can save over 30% by taking the main meal only.

9. Apply for a reward credit card

Lastly, there are many credit card plans in the UK today that offer cash backs or points on purchases. You can get one specifically designed for dining purchases and save money as you eat in expensive restaurants in your area.

You can ”have your cake and eat it” if you use the above tips before enjoying your next fine dining experience. There are many ways to save in a fancy restaurant. Choose any one or more of the above tips.

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.

FCA Warning: Are Young People In The UK Borrowing Too Much?

In a recent ”Money Matters” interview with BBC, the C.E.O. of the FCA, Andrew Bailey expressed concerns about growing debt among young people aged between 18 and 34 years in the UK. His concerns came as the number of insolvent individuals in the 18 to 34 age bracket increased by 31% between years 2015 and 2016, according to the Insolvency Service.

The latest Insolvency Service statistics show that seaside towns in Wales and England have the worst debt levels among the youth in the UK. The towns that are worst hit include; Scarborough, Torbay, and the Isle of Wight.

The FCA is currently focusing on sustainable, affordable credit, i.e., reducing high-cost payday loans and long-term credit card debt. In his interview, Bailey warned that there is an increasing number of young UK citizens taking out credit cards and payday loans among other short-term credit loans to cater for basic living expenses.

Although Bailey goes ahead to state that the current debt levels haven’t reached a critical level from a macroeconomic standpoint, there are serious concerns about why debt levels are increasing among young people. Bailey attributes this new disturbing trend to a generational shift in patterns of wealth and income. He doesn’t view this trend as reckless borrowing per se, but an indication of the current basic living standards.

Bailey feels basic living costs have increased drastically over the decades forcing the young generation to borrow more to meet essential living costs. He points out specifics like the high cost of rental houses as well as poor/lack of income growth as the main causes of the debt problem. Today’s youth also have lower asset ownership levels which is a different generational experience from decades ago.

Bailey also attributes the current debt levels among the youth to an increase in ”unsecured lending” ranging from credit cards and overdrafts to car loan and personal loans. According to the latest Bank of England statistics, consumer debt now stands at over £200 billion and increasing drastically at 10% every year. Savings are also decreasing due to low interest rates and higher cost of living.

Other sentiments

According to Vince Cable, the Liberal Democrat Leader, the current debt problem among young people in the UK is attributed to the conservatives’ failure to implement their manifesto pledge on creating better laws for people facing financial difficulties. Cable claims the pledge to offer legal protection ranging from interest to charges and bailiffs for 6 weeks to individuals in distress because of debt will go a long way to solve the debt problem in the UK.

Jonathan Reynolds who is the Treasury’s shadow economic secretary finds a lot of human tragedy in the UK debt story. According to him, the youth don’t have a choice. Labour suggests there should be a cap on charges on other forms of short-term debt in line with the payday loan cap. According to Shadow Chancellor, John McDonnell, there is a need for special focus on credit card debt which has spiralled out of control. McDonnell has plans to help over 3 million people in the UK who are currently paying more than they should in interest payments.

Joanna Elson, the C.E.O. of Money Advice Trust agrees with Andrew Bailey’s sentiments. Elson states that although the current debt levels among the youth may not be severe to the economy, the trend has a critical effect on an individual level. Elson stresses the importance of debt advice but recognises the fact that very few young people are seeking financial advice when they find themselves in financial problems.

FCA intervention

The FCA is currently looking at some practices as well as forms of high-cost debt which are the main contributors to the UK debt problem. Although a lot has been done to regulate payday loans among other short-term loans in the recent past, the FCA boss would love to see increased focus on sustainable, affordable credit provision. The FCA has also turned its attention to the rent-to-own industry which charges high interest for ”white goods” like washing machines.

The FCA clampdown on payday loan lenders which started in 2015 brought sanity to a troubled industry. Payday loan charges are now capped. Borrowers don’t need to worry about affordability as long as they choose a reputable payday lender. Furthermore, there has been reduced over-dependence on payday loans according to Treasury select committee member, Kit Malthouse.

The next step is making the payday loan rules an industry standard. The FCA boss has stressed the importance of sustainable credit in society and offered assurances on maintaining a close eye on high-cost lending going forward.

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.

How Mobile Providers are Ripping You Off: Smartphone Money Saving Tips

According to a recent Deloitte survey, Smartphone penetration rates now stand at approximately 80% in the UK. Smartphones have become incredibly popular in the UK and the world at large because they offer more communication options, endless applications, unlimited web browsing capabilities, unmatched entertainment and so much more compared to traditional mobile phones.

It is, however, worth noting that these added advantages come at a cost. Furthermore, there is a general consensus that mobile providers do very little to help their customers manage costs. Given the high cost of living and stagnant income growth in the UK, it’s important to find ways of cutting costs and saving to avoid over-dependence on payday loans among other types of short-term loans. Here’s how your mobile provider is ripping you off and what you can do;

1. Unlimited plans which aren’t unlimited

Smartphone users love unlimited data plans especially when data usage is concerned. In a world where live streaming rules, unlimited plans are highly sought after. What most Smartphone users fail to realise is; most unlimited plans have hidden limits which make them limited. For instance, unlimited data usually comes with speed and/or device limits if you exceed a certain limit. Mobile providers do maximize profits without causing congestion in their networks. To avoid paying for an unlimited plan which is not really unlimited, it’s important to do your own research before jumping on any unlimited plans that come your way.

2. Too much/too little insurance

Smartphone purchases via mobile providers usually cover repairs and replacements resulting from damage. There are however limits to this coverage. In most cases, you have to part with more money to insure your phone adequately against the most common Smartphone risks. In simpler terms, the insurance coverage you get when you buy a phone from your mobile provider is very basic.

On the contrary, mobile providers are also guilty of selling too much insurance to Smartphone buyers. You should check what is covered in your warranty, free insurance plan, and credit card plan (if you have any) when you buy your Smartphone to avoid incurring unnecessary costs. Mobile providers make money from selling Smartphones insurance, so research for a cover that serves you well instead of taking what is on offer. It’s also important to consider the fact that you may already have coverage.

3. Hidden contract terms

Mobile providers are also guilty of hiding contract terms, yet these details are crucial for controlling monthly Smartphone expenses regardless of the type of plan you have. You can find contract term details in your mobile provider’s website. It is important to read the terms yourself and seek clarification if needed as opposed to relying on what a mobile provider salesperson tells you. Mobile providers usually hide crucial information on upgrade fees, international roaming fees, overage fees and many other fees/conditions in lengthy contracts yet this information is vital for controlling cost. So, take time and read your contract to the letter.

4. Unauthorised/unnecessary text charges

Some mobile plans come with unlimited texting while others charge you a fee for every text sent. Others also charge for promotional texts received. It is important to avoid replying to unsolicited text which are promotional in nature. Such texts come in many forms i.e. as questions requiring an answer. You should avoid replying to such texts and anything you have not subscribed to. It’s also important to understand the texting limits of unlimited plans. You should also consider using free texting/messaging services today like Whatsapp or Facebook messenger to reduce your texting costs significantly. Such services are usually free if you have a Wi-Fi connection.

5. No cash on trade-ins

Mobile providers pay in credit as opposed to cash for old phones. They also tend to take longer compared to private options such as dedicated buyback companies which give cash instantly or send it within a few days. Furthermore, they tend to offer lower payouts for trade-ins (approximately 30% less) for old cell phones compared to buyback companies. It’s, therefore, better to sell your old phone through buyback companies when you are looking for an upgrade if you want to get the best value.

You stand to enjoy substantial savings and avoid reliance on short term loans by understanding how mobile providers rip off their clients. You can save £100 + pounds every year by understanding the terms of your mobile plan/contract and choosing insurance plans carefully. Avoiding texts and mobile provider trade-ins can also go a long way in reducing the money you spend on your Smartphone.

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.