Category Archives: News

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.

FCA Warning: Senseless Housing Policy Fueling High-cost Credit Rip-off

FCA boss Andrew Bailey has called out ministers for “forcing” tenants to take costly loans. According to Bailey, the social housing policy offering tenants unfurnished council homes has pushed many Brits to take high-cost loans. Bailey doesn’t see sense in offering tenants homes with no essential furnishing.

In a recent speech, The FCA Chief Executive hinted that social housing was driving tenants to take expensive debt to buy washing machines, cookers, and other household goods at three to four times the actual cost of the goods. Bailey doesn’t see sense in creating a good social housing system without providing essential fittings and furnishings. He also hinted that the FCA might fail to extend the payday loan cap to cover rent-to-own goods and doorstep lenders.

As an alternative, Bailey stated that the FCA was examining a wide range of approaches to dealing with the harm experienced by borrowers using these products. The FCA will elaborate on its views in June 2018. Bailey insists that the regulator will not necessarily use the same approaches to regulate different markets. In his speech, Bailey affirmed that the FCA is aware of the problems facing Britain’s poorest households depending on rent-to-own firms like PerfectHome and BrightHouse.

PerfectHomes is among the rent-to-own firms guilty of charging Britons exorbitant interest fees for household goods.

Brits who use high-cost credit pay more than twice the loan amount in interest and additional costs like insurance. In some cases, the cost can be five times the loan amount according to investigations by UK newspaper, The Sun.

These findings have prompted The Sun to launch a campaign meant to stop credit rip-off. The Sun is pushing for payday loan regulation to be extended to other high-cost loans. The payday loan cap has proved to be very effective according to Citizens Advice statistics which show a 50% reduction in problematic payday loans.

The FCA seems to be shifting focus on public awareness rather than cap policies given Mr. Bailey commented on the need for charities to focus on educating the public on the options available for borrowers struggling to get by.

In an interview with The Sun, Citizens Advice C.E.O., Gillian Guy stated that the FCA needs to do more to protect vulnerable Brits from falling into debt. According to her, giving vulnerable borrowers alternative credit options doesn’t help everyone or replace the urgent need for more borrower protections especially for doorstep and rent-to-own loan customers.

Landlords should be part of the solution

Sara Williams from popular money blog, Debt Camel, believes landlords can contribute to the solution by offering tenants a chance to purchase some household goods like washing machines at discounted prices or with affordable repayments. Williams recognises the possibility of doorstep and rent-to-own loans becoming difficult to manage in cases of defaults which is why she stresses on the importance of the FCA stepping in to cap total repayments when borrowers face repayment problems.

Williams insists on the need for the regulator to give lenders better guidelines i.e., on affordability to ensure those who get loans are capable of repaying them.

The C.E.O. of Joseph Rowntree Foundations, Campbell Robb shares similar sentiments. Robb sees it as unethical for low-income earners to be exploited by high-cost lenders stating that this is how people are trapped in poverty. He sees the need for more to be done to make affordable credit accessible given the UK has experienced long periods of low wages, frozen benefits and rising prices, factors which are landing many into poverty.

The Sun campaign

The Sun is demanding an end to credit rip-off. The newspaper’s demands for rent-to-own credit include; repayable costs to be capped to twice the item list prices. The Sun is also calling for a ban on sales staff incentives and discounts for existing clients to discourage them from taking more credit. Credit companies should also publish examples highlighting all costs.

For doorstep lending, The Sun wants stricter affordability checks and a cap on total fees and interest paid to match the payday loan cap, i.e., cost of loan should never exceed the amount borrowed. The Sun is also calling for a ban on discounts offered to existing doorstep loan borrowers in an attempt to lure them to take more credit.

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.

Ministers Set Aside £800,000 for Hunting Down Illegal Loan Sharks

UK Ministers have pumped £800,000 into efforts aimed at cracking down on illegal loan sharks out to exploit the most vulnerable borrowers. Rogue lenders capitalising on desperate borrowers are going to face a fresh stringent crackdown. £100,000 of the money set aside was seized from dodgy firms. The £800k will be spent on efforts aimed at encouraging vulnerable borrowers to join credit unions instead of considering high-cost credit options.

A record £5.6 million will be availed to Illegal Money Lending Teams in the UK to fight unscrupulous lenders who target poor and desperate borrowers. The money is meant to help troubled borrowers get out of debt and stay away from lenders offering loans at ridiculously high interest rates.

An estimated 300,000 British households are indebted to illegal lenders. According to Treasury’s Economic Secretary, John Glen, “high-interest lenders are lowlife crooks who take advantage of the most vulnerable. The 300,000 Britons indebted to these illegal lenders must know we are on their side. This is why we are spending more to support the victims and fight the loan sharks.”

The news has been received positively by many including The Sun which already has a campaign pushing for a ceiling on the total cost of high-cost credit offered via rent-to-own products and doorstep loans.

In 2017, 7 million British households used high-cost credit like doorstep loans and rent-to-own products. Ministers have called on an extension of the payday loans cap to many other types of high-cost credit including credit cards.

Stella Creasy has been on record accusing high-cost lenders of “preying” on Britons who survive on insecure incomes. In a recent statement, she pleaded with ministers to borrow from the payday loan cap lessons and apply a similar cap to other loan products stating that Britain is drowning in debt.

The latest statistics indicate that there have been 380 prosecutions against illegal lenders since the IMLT (Illegal Money Lending Teams) was formed in 2004. The IMLT has written off 73 million pounds of illegal debt saving 28,000 poor borrowers from the jaws of loan sharks.

According to Peter Tutton, StepChange Debt Charity’s Head of Policy, the move by the ministers is welcome. In a recent statement, Tutton stated that the crackdown on illegal loan sharks needs to extend to the entire high-cost credit market to ease the harm experienced by many British households forced to take loans to survive. While reacting to the new efforts aimed at boosting the IMLT’s mandate, Tutton stated it is time for the UK government to seek creative and sustainable alternatives to help vulnerable households.

Why is it important to stop loan/credit rip-off

According to The Sun, no borrower should be forced to pay twice as much as they borrowed or more regardless of the type of loan product they are taking. Paying interest that is equal or more than the borrower amount is unethical in any standard.

This thinking is what inspired UK newspaper The Sun to launch a campaign pushing for a cap on the cost of doorstep loans and rent-to-own loans. The Sun is calling for a cap similar to that set on payday loans in 2015 where the total cost of loans can never exceed the loan amount.

Since the payday loan cap came into effect in the UK, the number of payday loan borrowers with unmanageable payday loan debt has decreased by over 50% according to  Citizens Advice which offers free, independent and confidential financial advice to anyone in need.

People earning the lowest incomes and living in the most poverty-stricken places are paying the steepest price for loans. Doorstep and rent-to-own loan lenders target individuals whose income isn’t enough to cover all the basic monthly household expenses. These high-cost loans are extended to individuals who have problems paying for utility bills and rent among other essential bills. The loans are also extended to borrowers who want to buy household goods like furniture.

Although the loans seem helpful, they attract exorbitant interest rates amounting to 1,500% in some cases. It is scandalous for anyone to have to borrow money for subsistence and then be forced to pay three times the loan amount.

With the IMLT funded, there is enough momentum to deal with all high-cost lenders in the UK conclusively.

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.

Asda Shelves Controversial £99 Petrol Deposit

Supermarket chain Asda has shelved its controversial petrol deposit trial rolled out in three supermarkets in the UK. The move followed adverse news headlines in the recent past. Disgruntled customers have been voicing their displeasure for being charged £99 more after filling up using the supermarket’s pay-at-the- pump system. The system had been allowing Asda customers to pay for fuel upfront using their card without going into the kiosk.

According to BBC reports, Asda claims the £99 deposit was meant to be a holding charge to make sure customers have enough funds to pay for fuel. The scheme has now been suspended. Asda claims they just wanted to do what was best for their customers.

What went wrong?

The Asda petrol deposit was designed to help customers avoid overdraft facilities when paying for fuel in case a customer paid for fuel using their card, and they didn’t necessarily have funds available in the card. Although the trial deposit was designed to do good, it has faced widespread criticism from customers who were forced to pay the £99 deposit over and above the fuel purchased without any warning.

The trial deposit which was meant to be cancelled when the right fuel amount was paid faced serious delays because of coordination challenges between Visa, MasterCard and consumer banks. The challenges left many Asda customers short of £99 temporarily.

According to a statement released by Asda, MasterCard and Visa intended to make sure Asda customers had enough funds in their card to pay for fuel and the £99 deposit would be refunded immediately to the customers through their bank.

Asda admitted to receiving few complaints about the process but went ahead to suspend the change sighting risks associated with harming their customer’s trust in them. Until the British retailer is given assurances that all banks will comply with the MasterCard and Visa rule change, it can’t continue with the petrol deposit trial.

High profile complaints

Asda may have received a few complaints, however; most were shared on social media (Facebook) and reported by mainstream media. One notable complaint was by Asda customer Jade Louise who blasted at the company furiously for being charged £99 after buying petrol worth £5 at an Asda located in Dewsbury, West Yorkshire. According to her complaint, her trial deposit was refunded three days later causing here huge inconveniences. Her complaint, which was in the form of a Facebook post, was shared more than 20,000 times. She attached her bank statement (a screenshot) to back up her claims and a post urging people not to fuel at Asda unless they are willing to wait for days without £99.

Part of her complaint blamed Asda for bringing a new system that allows the retailer to deduct £99 from a customer’s account for fuel as well as a second deduction for the fuel you have actually taken. According to Louise, she had tried contacting Asda and received unsatisfactory feedback from a manager who stated that the deduction was a trial. Louise among many other complainants expressed displeasure at the fact that £99 is deducted from your account and you can’t use the money for days until it is released back after the other payment is cleared. Most complaints were on execution.

Customers felt Asda could have communicated better using notices on petrol pumps to ensure customers were aware of the change in policy before facing a huge £99 pre-authorisation charge which wasn’t refunded in minutes.

Change in the rules

According to MasterCard correspondence with BBC, there had been a recent change in industry regulations in 2017 that required automated fuel pumps to pre- authorise a value matching the cost of a full tank of petrol. Before the change, motorists were only charged a £1 pre-authorisation from their accounts as a

confirmation that they were using a valid card. The new rules were meant to ensure customer didn’t fill up more fuel than they could afford which would usually result in overdraft charges.

The controversial £99 petrol deposit trial comes in the wake of an anticipated increase in fuel prices globally as the United States decided to withdraw from the Iran nuclear deal. There is a looming increase in pump prices in the next few weeks.

There is also increasing concern about short term debt like overdraft loans in the UK.

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.

New Bill Banning Letting Fees Presented in Parliament

A new bill which could mark the end of letting fees in England has been presented in the House of Commons.

Letting fees are separate from tenancy. The fees are charged by property managers or letting agents who conduct viewing and additional work related to letting property out. Letting fees are not refundable.

Besides bringing an end to the letting fees era, the bill also aims to cap tenant deposits to be equal or less than 6 week’s rent. Tenants stand to be protected from hefty deposits spanning months.

If passed, the bill could see tenants enjoy more than £240 million every year in savings. The Tenant Fees Bill was first mentioned in 2016. The draft was published in November 2017.

Holding deposits will also be capped at a maximum of one week’s rent.

Besides banning letting fees among other fees like referencing and admin costs and restricting the number of deposits tenants are supposed to pay, if passed, the bill will also;

Limit holding deposits to less than a week’s rent, and requirements must specify how the deposits are returned to tenants.

The bill will also cap the amount tenants are charged for a change in tenancy. Cap to £50 unless the landlord proves more costs were incurred.

The bill has also imposed a £5,000 fine for breaching the ban for the first time alongside a criminal offence if the person has been convicted or fined again for the same offence in the past 5 years. A maximum fine of £30,000 can be charged instead of prosecution.

The bill will also prevent landlords from repossessing their property through the Housing Act 1988, Section 21 until all unlawfully charged fees are paid back.

The proposed bill also amends sections of the 2015 Consumer Rights Act. The amendments will require letting agents meet specific transparency requirements in relation to property portals like Zoopla and Rightmove.

The bill will also see Trading Standards enforcing the ban and making provisions for tenants to recover fees charged unlawfully.

Lastly, the bill will also see money collected as penalties kept by local authorities and spent on local housing enforcement in the future.

The new measures will be subject to parliament’s timetables. If passed, the new rules will become law in 2019.

The new bill also specifies that, besides rent and deposits, agents and landlords will only have authority to charge their tenants fees related to; changes in tenancy or early termination requested by a tenant, utilities, communication services, council tax or any payments arising because of a tenant (like the costs associated with repairing damaged keys or replacing lost keys).

While commenting on the new bill, Housing Secretary Hon. James Brokenshire stated that the UK government is committed to building a housing market that is capable of meeting future needs. According to the legislator, tenants in the UK must be protected from unexpected costs which is why the government is delivering its promise to get rid of letting fees as well as put in many other measures for making renting more transparent and fair.

For many years, wages in the UK have failed to match inflation rates. The price of goods/services has been rising faster than wages. The growth in wages has been too slow despite widespread hopes that changes like Brexit would see the UK experience unprecedented growth.

Britain is also facing a debt crisis with recent reports showing that an estimated 300,000 British households are indebted to illegal lenders. There is an increase in illegal loan sharks “preying” on desperate Brits who survive on short term loans to counter the slow growth in wages.

In fact, the UK government has increased IMLT funding to help crackdown rogue high-cost lenders. The new bill is in line with the government’s effort to protect vulnerable citizens who are forced to rely on high-cost credit every month to pay for basic needs like utility bills and rent.

The FCA put a limit on the cost of payday loans in 2015, a move which saw unsustainable payday loan debt decrease by 50%. Consumer groups are pushing for the same cap to be implemented on other high-cost loans like door-to-door loans. As the UK government continues to introduce legislation to protect UK consumers, there is a lot of hope in the future even if wages don’t increase immediately.

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.

Provident Financial Breaks Gloom, Reports Strong Start to 2018

According to a trading update by Provident Financial, all the lender’s businesses are performing well. The update has put an end to the doorstep lender’s recent problems. The Bradford-based lender offers high-cost loans to some of the most vulnerable families in Britain. Reports of a strong start have put an end to recent financial woes.

According to the trading update, all three businesses of the group have started 2018 on a positive note. This announcement comes after Provident Financial tapped £300 million of fresh investment funding. The lender had failed to reorganise its debt collection business and announced two profit warnings in the recent past. Provident Financial had also had a challenging year for shareholders before making the positive announcement.

In August 2017, the then C.E.O. Peter Crook resigned after the lender announced a 2nd profit warning in a span of two months. The second profit warning was triggered by a decision to overhaul home-collection business by hiring 2,500 customer experience managers to replace self-employed debt collectors. In the wake of the news, there was a massive exit of self-employed agents that happened faster than Provident Financial had envisioned resulting in poor debt collection rates.

The lender also faced a massive fine of £2m and compensation amounting to £169 million in February 2018 paid to its Vanquish Bank Unit consumers after the FCA found the lender guilty of malpractice. The regulator discovered that Provident hadn’t informed its customers accordingly about the total cost of add-on product, Repayment Option Plan.

The FCA is also investigating Provident’s car finance business Moneybarn. The regulator is concerned on how the lender has been evaluating potential car buyers before issuing loans. Although Provident Financial’s debt collection business is still making losses, the business is set to become profitable in 2019.

The trading update also covered the level of debt collection after Christmas which happens to be the busiest and most profitable period for high-cost lenders. Provident Financial debt collection arm enjoyed considerable business during this period adding that Vanquis Bank had been delivering profits beyond

expectations and although Moneybarn business was affected by bad debts, the performance was modestly beyond expectations with customer numbers higher by 24% compared to the same period last year.

The improvement was experienced despite the lender tightening the criteria for choosing suitable borrowers. In remarks made to mark an end to the first quarter, Provident Financial C.E.O. Malcolm Le May stated that the financial and operational performance of Provident Financial is promising and the lender is on track to post 2018 results that match internal plans.

About Provident Financial: Brief overview

Provident Financial is a sub-prime lender or “doorstep lender” in the UK. The company specialises in home collected credit, online loans, credit cards and consumer car finance. The company is listed on the LSE.

Provident Financial conducts business under different brands. Vanquis does credit card business. Provident Personal Credit is a home credit operations company while Satsuma offers online instalment loans. Other brands include Moneybarn for car finance business and Glo for guarantor loans. Provident Financial’s home credit brand Provident Personal Credit lends to individuals in their homes via local agents. The company serves over a million home credit customers.

Provident Financial was established in 1880 to offer cheap credit to residents of West Yorkshire. The lender was listed on the LSE in 1962. The company formed Vanquis Bank in 2002 to issue/operate credit cards. Vanquis focuses on pre-paid credit card business. In 2013, Provident Financial started its online short-term loan business Satsuma Loans before acquiring Moneybarn a year later. The Moneybarn acquisition was meant to give the lender exposure to automobile finance business.

Provident Financial has had a fair share of challenges ranging from fines to reprimands for questionable lending practices to breaching regulatory requirements. The lender’s stock has dropped by over 60% in a single day (22nd August 2017) after issuing a 2nd profit warning, events which saw the resignation of the then C.E.O., cancelation of shareholder dividend, a warning alluding to the cancellation of the full-year dividend in 2017 and announcement of an ongoing investigation by the FCA.

The latest trading update signalling the end of the lender’s financial woes is a “breath of fresh air”. If Provident Financial manages to maintain the current momentum, the lender may be able to reclaim long-lost glory.

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 National Living Wage Has Had a Boost in 2018

The UK National Living Wage was officially increased as of April 1st, 2018. The increase has seen many UK workers earn a long-awaited pay boost. The increase was confirmed in the November budget by Philip Hammond. The boost is however reserved for UK workers aged 25 years and above. It is also below the current Real Living Wage, a wage that is independently calculated by the Living Wage Foundation, a voluntary scheme with thousands of employers involved (such as local authorities, retailers, and charities).

Definition: National Living Wage

The UK National Living Wage (formally referred to as National Minimum wage before 2016) refers to the amount of money any UK employee aged 25 years and above is legally entitled to earn. The wage has increased to £7.83 (from £7.50). The £0.33 per-hour increase was officially introduced on 1st April 2018.

The United Kingdom introduced a compulsory national living wage back in 2016. The Labour government set the first ever National Minimum Wage in 1998. Before that, there was no official wage rate in existence although trade unions in the UK have always fought hard for the rights of their workers.

Mr. Hammond wants to raise the National Living Wage consistently to £9 in the next two years (by 2020). The news has been welcomed by many UK workers although only workers with employers who are Real Living Wage scheme members stand to enjoy.

Definition: National minimum wage

The UK National Minimum Wage refers to the amount of money workers aged between school-leaving age and 24 years are entitled to. The amount can vary depending on factors such as age and whether a worker is a member of an apprenticeship scheme.

As of April 1, 2018, workers aged 21 to 24 years will earn a minimum of £7.38, up from £7.05. Workers aged 18 to 20 years will earn a minimum of £5.90, up from £5.60. Workers aged less than 18 years will earn £4.20, up from £4.05.

Apprentices who were entitled to £3.50 (if they are less than 19 years old) are now entitled to £3.70 as of 1st April 2018.

Binding limits

The proposed national wage limits are binding. Any UK worker who hasn’t been getting wages matching the new national limits has the right to complain to their employer immediately. If the employer fails to address the concern, the worker can escalate the complaint to the HMRC for further investigation and action.

Who doesn’t qualify for the National Living Wage or National Minimum Wage?

The new National Living Wage and National Minimum Wage limits aren’t applicable to voluntary workers, self-employed individuals, company directors as well as family members living in an employer’s home or those who do household chores.

Discrepancies by location and industry

It’s also important to note that the pay is the same regardless of location. The pay is the same for workers living everywhere including London. There are however differences in pay for workers in horticulture and agriculture.

Entitlement

All UK workers who were employed before 1st October 2013 are entitled to the wage set in their employment contracts. Entitlement to the National Minimum Wage or National Living Wage depends on a worker’s age as well as their membership to an apprenticeship scheme.

Definition: Real Living Wage

The Real Living Wage is a wage independently calculated yearly by Charity organisation, Living Wage Foundation. The wage aims to acknowledge the “real” or “actual” cost of living based on factors like fluctuating prices of groceries in the UK. The scheme has 3000 employers as members. The wage limit is set by Living Wage Foundation. Accredited employers include; construction companies, retailers, banks, NHS trusts, local authorities, and charities.

According to Living Wage Foundation, the Real Living Wage is £8.75 per hour everywhere except London. London’s Real Living Wage is £10.20 currently. The Real Living Wage is calculated yearly (every November). All accredited employers must commit to any increases. The rate applies to workers over 18 years of age in recognition that such workers have to face similar living expenses like everyone else.

Although companies aren’t legally entitled to pay their workers in line with national living or minimum wages, companies which are members of the Real Living Wage scheme automatically pledge to pay their workers as per the current Real Living Wage rates at any given time.

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.

PPI Warning Issued Over Adverts

According to MoneySavingExpert.com founder, Martin Lewis, payment protection insurance (PPI) claimants shouldn’t follow advice on the FCA’s new PPI adverts or risk losing up to 33% of their payout.

The regulator is telling people to search for “FCA PPI” via its new ads encouraging people to check if they have been mis-sold PPI before. However, MoneySavingExpert.com has discovered instances where other firms have charged claimants up to 36% for claiming PPI simply because those firms appear as top results for this search term instead of the official FCA website.

Advising claimants to use a search term (FCA PPI) instead of giving the official FCA website is risky since the regulator isn’t guaranteed a top result

for every search that happens using the “FCA PPI” search term. Although the FCA comes top for organic search results relevant to search terms related to it, paid ads “sit” above the search terms and these ads are what people see first.

The problem

The FCA launched a series of Arnold Schwarzenegger adverts urging people to check if they have been mis-sold PPI before. Those who suspect they have been mis-sold PPI covers in the past must claim before 29th August 2019. The ad campaign includes two different radio adverts, a TV advert, and two different poster adverts. The TV ad happens to be the only ad that features the full FCA site address. The poster and radio ads urge people to search for the term “FCA PPI” and don’t offer the official FCA website.

When the “FCA PPI” search term is tested on Google among other search engines, MoneySavingExpert.com discovered that there are multiple instances where paid-for companies rank higher than the official FCA site in search engine results. In some instances, the regulator appears 4th in a list of ads and firms ranking

above are entitled to a cut (up to 36%) on every successful claim.

According to Martin Lewis, the FCA must change the call-to-action for these ads because they are misleading. Lewis acknowledges the FCA’s efforts to try and educate the public but goes further to state that the regulator will not reach the intended people with the ads in their current state. According to Lewis, the regulator is targeting individuals who haven’t reclaimed PPI in the past ten years. A majority of such people are not web savvy. They are also vulnerable. Lewis argues that most people won’t be able to differentiate the ad with the official FCA website from those from claim companies which are entitled to take huge “cuts” from every successful claim they process.

In the recent past, Google has made it harder to differentiate between search results and ads on search engine pages. For those who aren’t web savvy, spotting the difference is hard which could lead to mistakes. In his humble opinion, Lewis cautions that the regulator is using public funds to pay search engine giant, Google, to rank higher yet most claim firms have bigger ad budgets having made a lot of money taking a third of people’s payment protection insurance payouts. In simple terms, these firms have the incentives to use a lot of money to dominate Google’s ad ranking for PPI and related terms. This, in turn, makes it easy for the FCA’s ad campaign to be “hijacked.” Clicks meant for the FCA are likely to go to claims management sites. What’s more; people may find themselves paying over 30% to reclaim what could have been reclaimed for free. Furthermore, the chances of a claimant taking action after seeing the cost are very slim.

Why it’s happening

The problem is simple. The regulator chose a search term over the official FCA website to control what a person sees when they search the term “FCA PPI”. This is despite the fact that search engines display paid-for ads as the highest ranking results today. Companies can bid on terms used by people to try and secure top search engine result spots for those terms.

Reclaiming PPI insurance

PPI is a special type of insurance policy sold to individuals who get loans. As the name suggests, payment protection insurance is meant to cover a borrower’s

loan repayments in case of eventualities like sickness, accidents, unemployment, etc. that may hinder their ability to make repayments. PPI is a good insurance cove; however, it has been mis-sold widely. Just recently, a ruling (known as Plevin) has made it possible for people to claim some money back on mis-sold PPI covers in the past. The landmark ruling was inspired by the fact that many people have been paying for potentially worthless PPI cover for years. MoneySavingExpert.com has a mis-selling checklist[1]. You don’t need to pay anyone/any company to reclaim mis-sold PPI.

Act NOW!

You must check and launch your claim before 29th August 2019 if you meet the mis-sold PPI guidelines. Complaints received before the deadline will be processed accordingly. However, some people may be able to claim after the deadline i.e., those who bought PPI policies after 29th August 2017. The deadline may also not be applicable for individuals disputing rejected PPI policy claims.

It is estimated that approximately 5.5 million people were victims of mis-sold PPI between years 2013 and 2015. Majority of these people haven’t launched claims.

The FCA’s take

According to an FCA spokesperson, auctions for PPI related keywords are extremely competitive, and the regulator can’t guarantee its ads will enjoy a 1st place position every time. The regulator is, however, monitoring this development carefully and working on an approach focused on increasing the value of its ads. Nevertheless, the regulator is confident about the campaign’s call-to-action given website traffic has increased significantly since the campaign launched.