Category Archives: News

Bill Set Out To Tackle 'Extortionate' UK Overdraft Fees

Bill Set Out To Tackle ‘Extortionate’ UK Overdraft Fees

MP Rachel Reeves has proposed legislation to make UK banks subject to the same rules applicable to payday loan lenders.

Bank customers who have been subject to ‘extortionate’ overdraft fees have hope going forward after a parliamentary bill tabled recently promises to protect customers from escalating overdraft fees. On 25th April 2017, Labour MP Rachel Reeves who also happens to be a Treasury select committee member tabled the bill outlining plans for FCA (Financial Conduct Authority) regulators to cap the total amount of money UK banks are allowed to charge their customers for making unauthorised overdrafts. The bill proposes limits similar to those imposed on payday loan charges.

According to Rachel Reeves, UK banks have forced many people to take up more debt with the charges applied on unauthorised overdrafts. Reeves argues that UK banks have a responsibility to help their customers get out of debt rather than being part of the problem.

The FCA has already included overdraft fees into a review on high interest loans alongside doorstep lending and payday loans. The FCA announced it would be including overdraft fees in its review in response to a two-year investigation into high street banks conducted by the Competition and Markets Authority (CMA) in 2016. The CMA was focused on capping overdraft fees but stepped back and instead required banks to be publishing their monthly maximum charges going forward. The FCA has taken over the issue.

It is estimated that UK banks make approximately £1.2 billion every year from unauthorised overdraft fees. Rachel Reeves is pushing for restrictions to bring down this amount. The current cost of borrowing a hundred pounds (£100) via unauthorised overdraft for a month can amount to ninety pounds (£90). This is 400% more than the maximum limit set on payday loan charges.

Rachel Reeves has been campaigning for a cap on extortionate overdraft fees in the UK for a long time. In her statement, she expressed concerns about UK households saving less due to these unjust fees. Her concerns are evident according to statistics given the fact that the savings ratio is at 3.3% currently (a record low from 2010) while unsecured debt has increased by a record 10% in the past year alone. Statistics also indicate that the debt-to-income ratio has increased by 6% in the past year to stand at 145%. This poses serious economic risks to Britain’s economy according to Reeves.

With an election looming, Reeves’s bill may not become law in the current parliament. She, however, promises to reintroduce the bill as a private member or via a bill amendment in parliament if she gets re-elected. Reeves has also called on parties to incorporate the bill in their manifestos. She wants to see banks subject to the same limits as payday lenders to bring an end to extortionate UK overdraft fees charged by high street banks.

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 UPDATE on Fintech

FCA UPDATE on Fintech

The FCA regulates over 56,000 firms which employ over 2 million people in the UK. The financial services industry is obviously an important industry in UK’s economy given this statistic. This highlights the need for Fintech initiatives going forward (technology initiatives supporting or enabling the financial industry). One such initiative is Project Innovate. The initiative was developed back in 2014 to promote competition and growth in UK’s financial services industry. The initiative has been supporting small and large businesses which make new products and services that benefit customers genuinely. In the first year of operation, Project Innovate helped over 175 businesses. Currently, the project has helped over 358 businesses.

The latest FCA update on Fintech as of April 2017 focuses on a few main points. First and foremost, the FCA continues to tackle regulatory barriers to allow firms to continue innovating for the benefit of their clients. The FCA is doing so given the fact that the demand for its support is increasing. Project Innovate is also entering a new phase. As a forward-looking regulator, the FCA sees the need to continue evolving its approach. The FCA has seen an emergence of Fintech hubs in the UK and has reaffirmed its commitment to support these hubs by offering more/better local assistance.

The FCA’s approach to innovation

In an effort to highlight the importance of innovation in the financial services industry, the FCA continues to educate the public on why innovation is important. According to Christopher Woolard, the FCA’s Executive Director of Strategy and Competition, the FCA has an obligation to make UK’s financial services work well. To do this, the FCA continues to assess the integrity of financial markets and consumer protection issues. The FCA also has the duty to continue promoting the interest of consumers.

According to Woolard, the FCA is increasingly focused on using innovation to promote competition going forward. The FCA has completed its second round of testing innovative products/services, business models and well as delivery mechanisms in practice through its Regulatory Sandbox program. The FCA is also continuing to support technologies that will facilitate the delivery of regulatory requirements better than existing capabilities. The regulator has already held successful initiatives aimed at bringing market participants together to solve crucial problems in the financial services industry.

Priority areas going forward

The FCA is increasingly focused on expanding the scope of its Advice Unit which has been making automated advice models in the investment, pension and protection space. The FCA’s Advice Unit has a broader scope now. The unit is currently engaging the general insurance, mortgage, and debt sectors as well as many other firms that are keen on providing guidance, instead of advice. According to Woolard, the FCA will do more to spearhead the conversation about emerging innovations and trends. The regulator has already started a conversation about the risks and advantages of Distributed Ledger Technology.

The FCA also intends to take an international approach to innovation i.e. restarting its commitment to supporting innovation globally by signing cooperation agreements. The FCA has already signed such agreements with China, Hong Kong, Japan and Canada and is also working with other global regulators to foster a common understanding on good innovation. The regulator is working towards this via international bodies such as the IOSCO and the G20.

In early April 2017, the FCA hosted the first ever International Innovate Seminar featuring over 90 regulators from 56 countries globally.
According to Woolard, this will foster stronger international cooperation as well as help to secure the future of the industry in the long-term. Woolard, however, insists that the FCA is still focused more on supporting emerging Fintech hubs in the UK.

In his latest remarks, London has experienced the most Fintech emergence regionally. This emergence is however expected to spread beyond London. The FCA sees numerous exciting Fintech developments across the UK from Liverpool to Bristol which is why the regulator has promised to work with numerous organisations across the UK. The FCA is focusing on areas with a technological presence as well as strong financial centers. The FCA is also looking at areas where it has established strong relationships with local learning institutions like universities.

The regulator has mapped out the Leeds-Manchester and Edinburgh-Glasgow areas as promising emerging Fintech hubs and is focused on offering such areas the same access to regulatory support as key areas like London. The FCA is committed to ensuring good Fintech ideas in the financial services industry come to fruition regardless of where they are conceived.

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 to Stop the Constant Cold Calling Here In the UK

How to Stop the Constant Cold Calling Here In the UK

Cold calls, which are simply unwanted phone calls, top the list of UK’s most hated marketing tactics. Although marketers cold call people all over the world, the problem is worse in the UK. If you hate cold calls, look no further. Below are top 6 tips for you to consider.

1. Register with the TPS (Telephone Preference Service)

TPS-registered phone numbers are protected from cold calling. UK-based companies are barred from making unsolicited sales/marketing calls to TPS-registered phone numbers. You can register with TPS for free by visiting the website (www.tpsonline.org.uk/) or calling 0345 070 0707. It’s, however, worth noting that the TPS stops unsolicited sales/marketing calls only. You can still get market research calls as well as calls where you have opted in. Also, the TPS doesn’t stop calls from companies which are based abroad.

2. Keep your contact details off directories

Most companies especially local businesses use phone books to get phone numbers. To avoid cold calling, you need to request for your contact details to be removed from directories. Keeping your contacts off directories ensures marketing companies don’t find your number when looking for target customers. You should also be careful when giving out your contacts. If you have to give out your phone number, request whoever you are giving your number to; avoid calling you for sales/marketing offers or giving out your number to third parties.

3. Screen all your calls and use call blocking software

You should also avoid picking calls from unrecognised numbers. You can use software such as Truecaller to help you identify calls from numbers you haven’t saved in your phonebook. Screening calls is an effective way of avoiding cold calling since you get to know the identity of every person/organisation that calls your phone immediately. You can also block ”suspect” numbers.

4. Never bow down to cold-calling pressure

Some resilience can also go down a long way. Some marketing companies use underhand tactics to pressure their victims into accepting calls and offers. Never pick a cold call if you don’t want to. If you pick a cold call unknowingly, don’t disclose your personal information. Simply cut short the conversation and hang up. If you receive a cold call from a company you are interested in, insist on contacting them yourself. Most marketing companies will stop calling you if you don’t express any interest whatsoever or if they notice you won’t bow down to pressure.

5. Record cold-call numbers and report them

You should also record all unsolicited calls and report such numbers to organisations like Ofcom to take the necessary action. Get as much information about the company or person cold calling you and report them. Ofcom is UK’s communication industry regulator with a mandate for investigating and prosecuting individuals and companies which breach communication laws. You can also report cold calling offenders to TPS which will then forward the complaints to Ofcom or the ICO to take the necessary action against repeat offenders.

6. Use opt-out options

Sometimes you may be a victim of cold calling because you submitted your contact details somewhere without much thought. In such an instance, you should look for ways of stopping such calls. Legitimate companies have opt-out options that prevent calls or any other type of correspondence at the touch of a button. If you can’t find such options on a company’s website, call the company directly and ask the sales/marketing team to stop calling you. Legitimate companies abide by verbal requests so you shouldn’t have a problem stopping cold calls this way. You can consider writing a formal request just in case the cold calling doesn’t stop, and you have to take legal action.

Summary

Constant cold calling is a huge problem in the UK. Luckily for you, it is possible to stop this menace by taking any one or more of the above measures. Start by being cautious when giving out your contact information. You should also use the technology and institutions at your disposal. Being resilient and getting your contact information off directories will also go a long way.

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.

Payday Loan Giant Wonga Suffers Major Customer Data Breach

Payday Loan Giant Wonga Suffers Major Customer Data Breach

Payday loan giant Wonga HACKED!

On 8th April 2017, Wonga sent its clients correspondence stating that it had fallen victim to hackers who stole confidential information belonging to its customers. The hackers made away with the names, addresses, bank account numbers, phone numbers and sort code numbers of over a quarter million Wonga customers. The hackers are also believed to have accessed the last 4-digits of bank cards belonging to 270,000 Wonga customers.

According to the correspondence released by Wonga, the lender doesn’t think Wonga account passwords were compromised but advised clients to change their passwords. Customers have also been advised to be on the lookout for suspicious activity on all bank accounts as well as online portals. Wonga has also contacted all financial institutions believed to have been affected directly or indirectly by the hacking.

Wonga began contacting customers after discovering the severity of the breach on 7th April 2017. The breach is believed to have taken place late March 2017. The firm has already established a help line (0800 3166 745) to assist borrowers who may want to contact the lender for more information or guidance.

Wonga is currently in the process of investigating the hacking which it terms as illegal and unauthorised access to personal information of some of its clients. The hacking is believed to have affected Wonga customers in the UK and Poland. Approximately 245,000 UK customers and 25,000 Poland customers have been affected.

The lender has already apologised for any inconvenience caused and is in the process of informing all affected customers. Wonga is also working closely with the police to bring the culprits behind the attack to book.

Although Wonga is already in a mess trying to contain the effects of the data breach, the lender is expected to face the office of the ICO (Information Commissioner’s Office). If the ICO finds Wonga’s data security measures inadequate, the Lender could face a hefty fine.
Wonga could suffer the same fate as UK telecom provider TalkTalk which paid £400,000 for being unable to prevent a systems breach which compromised personal information of approximately 157,000 customers back in October 2015. Given Wonga’s breach affects almost twice the number of people and it spans across borders, Wonga may face a stiffer penalty if found guilty by the ICO.

This is on top of the fact that Wonga is set to spend millions of pounds securing its systems among other costs incurred responding to the incident. Wonga’s revenues are also expected to drop as some customers choose other lenders with better data security measures.

Considering the lender doesn’t appear to be sure about how the breach occurred, some customers are expected to jump ship reducing the projected earnings significantly. This attack doesn’t help considering Wonga has been in the news again for the wrong reasons.
Back in 2012-2013, Wonga was the subject of a massive identity crime case involving A Nurse, Sherene Bascoe that saw customers scammed £3 million. Wonga’s faulty site algorithms allowed scammers to submit 19,000+ payday loan applications using a single password, ”Bengali90”. The identity theft gang responsible requested for payday loans using stolen identities leaving innocent Wonga customers with payday loans they hadn’t signed up for.

The £3 million scam was successful because of Wonga’s faulty site algorithms. Although the masterminds of the scam paid the price, Wonga is yet to learn how to safeguard its client’s personal information. Considering there is an investigation underway and Wonga has had a troubling data security history, 2017 doesn’t look good for UK’s biggest payday loan lender.

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.

Is Debt Starting To Affect Our Mental Health? What Should You Do?

Is Debt Starting To Affect Our Mental Health? What Should You Do?

According to a recent UK survey carried out by market research company ComRes and insolvency & restructuring trade body, R3, 22% of all adults stated that their finances are affecting their mental health. The survey targeted over 2,000 British adults living East of England.

According to R3, the survey revealed other key causes of mental health issues revolving around personal health or family member health issues. Job, relationship and current global issues also account for some of the main causes of mental health problems in the UK.

The survey reveals that over 37% of all adults living in the Easter region don’t have enough money to wait for the next payday. They attribute their financial struggles to the rising cost of food (52%) and transport (45%).

According to Frank Brumby, R3 Eastern Chairman, financial struggles are universal regardless of the occupation, age or location of an individual. He goes ahead to state that financial worries have an enormous negative effect on a person’s well-being even if the concerns are about the financial situation of other people such as friends and family members.

According to R3 research findings as well as the experiences of R3 members’ clients, a lot must be done to educate people on the options available to them when they find themselves in debt problems. Brumby attests to the fact that improving financial education is among the best ways of reducing stress and mental health problems caused by debt.

R3 Eastern indicates that the personal finance landscape in the eastern region is relatively benign with real wages/income growing while interest rates remain low. Personal finance concerns have however remained sizeable. Bureaucratic obstacles are also stopping many people from taking advantage of the best suitable insolvency procedures.

Brumby continues to state that personal finance pressures will definitely increase in the region considering inflation is bound to rise throughout this year. There are many obstacles which can be solved by easing access to insolvency procedures. According to Brumby, the £680 fee payable by all individuals entering bankruptcy should be paid over time instead of one time to ease stress and boost mental recovery.

Below is a 9-point action plan by R3 Eastern to help anyone with financial/debt issues.

1. Acknowledge your debt problem: Refusing to admit that you have personal finance problem only makes the problems worse.

2. Ask for help: After admitting you have a debt problem, the next step is seeking professional advice. You can get professional financial advice easily for free. You can call the National Debtline, your local Citizens Advice Bureau or a licensed insolvency practitioner.

3. Prioritise debt repayment: Seeking professional advice will help you identify the source of your debt problems as well as effective ways of dealing with them. One of the best ways of dealing with debt problems is prioritising debt repayment. You must adjust your lifestyle to find money for repaying your debts. If you have problems doing this, you can ask for help from an advisor.

4. Be 100% honest with yourself: To solve personal debt problems, you must be honest about the kind of lifestyle you can afford while repaying your debts. Start by calculating how much money you owe. Proceed by adding your most important expenses. Your income should be able to cater for debt repayment as well as those expenses you can’t afford to live without. To accomplish this, you will need to take some drastic measures such as; looking for discounts more aggressively, moving to a cheaper home, etc.

5. Budget: Budgeting helps to identify essential financial commitments as well as trace where your money goes. When you are in debt, you don’t have the luxury of not following where every single cent you spend goes. Budgeting will help you get a true picture of your current financial situation. A budget will also help you stay on track as you try to get out of debt.

6. Maintain open communication with your creditors: Debt problems result in a lot of unnecessary stress due to lack of open communication at an early stage. If you let your creditor know that you have problems repaying as soon as possible, the creditor can extend help which might not be available if you waited. For instance, your creditor can revise payment terms giving you more time and flexibility.

7. Take your time: Although time may not be on your side when dealing with debt problems, avoid being pressurised to make decisions if you haven’t thought them through carefully. Most importantly, the decisions should be supported by expert advice.

8. Stop taking up new debt: You also need to stop applying for new credit cards, payday loans among other types of short-term debt before you get your situation under control.

9. Understand your options: Lastly, you need to know and understand all options available to you. If you need formal insolvency, there are several options appropriate for different debt levels. DROs (Debt Relief Orders) are great for small debt. Other options include; (IVAs) Individual Voluntary Agreements and bankruptcy. It costs more money and time to choose the wrong option so, make sure you understand all options first.

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.

Donald Trump Wants To Scrap The Consumer Protection Agency, What Does This Mean For Borrowers In The US?

Donald Trump Wants To Scrap The Consumer Protection Agency, What Does This Mean For Borrowers In The US?

US President Donald Trump is facing immense pressure to get rid of America’s consumer protection agency CFPB (Consumer Financial Protection Bureau). This is according to the man set to head the agency. If this happens, rogue debt collectors, loan sharks, and payday lenders will have unmatched freedom to rip off American borrowers.

According to Randy Neugebauer who is slated to replace the current CFPB Director, President Trump is facing immense pressure from the Republican Party to break up the agency completely. The former Texas congressman held talks with the then President-Elect Trump shortly after his election victory in November.

While speaking to The Independent exclusively in his 1st interview since the new Trump administration took office, Mr. Neugebauer stated that his meetings with President Trump have involved discussions revolving around deregulating as well as gutting the CFPB.
Mr. Neugebauer went ahead to state that some of his colleagues are in favour of doing away with the agency completely. He is however of the opinion that it’s better to change certain aspects of the agency as opposed to doing away with the agency completely. Mr. Neugebauer feels that the government shouldn’t be telling the public what types of financial products are the best but rather, creating a safe environment where the public is safe from unfair lending practices.

This is where the CFPB comes in. The agency has the power to take any necessary action against companies which break the law. The agency also takes on cases revolving around race or age discrimination.

Under Mr. Neugebauer’s watch, the agency’s current form is likely to be dismantled which may result in the agency losing much of its influence. Mr. Neugebauer claims that American consumers are currently being suffocated by regulations. He prefers a consumer environment where consumers have the freedom to choose the loans they want whether the deals available are good or bad.

Mr. Neugebauer has stated that he is willing run the agency if appointed. However, it will depend on what the long-term plan of the agency will be. Although Mr. Neugebauer admits to having had broad discussions with President Trump, he goes ahead to state that he hasn’t discussed any specific job offer with the president.

Mr. Neugebauer has been on the record voicing his support for payday loan lenders, despite the apparent lack of transparency as well as crippling interest rate charges that have contributed to calls for payday lenders to be banned.

He also backs President Trump’s executive order aimed at reviewing the 2010 Dodd-Frank financial regulations. Mr. Neugebauer states that the Obama administration rules meant to get rid of risky lending practices were an overreaction. Mr. Neugebauer views the current regulation as blanket regulation meant for the whole financial market yet some entities weren’t part of the cause of the financial crisis that warranted the 2010 Dodd-Frank financial regulations. In his opinion and those of many others, the regulation went too far.
Under the current CPFB director Richard Cordray, customers who have been victims of credit scams or unfair banking sector practices have received billions in compensation. However, Mr. Neugebauer claims that the problem was overstated and individual states were doing a better job when compared to the CPFB.

He admits to the fact that there are people who will always try to abuse the system, however, action can and has been taken against such people.
Furthermore, the CFPB is already under threat given the federal appeals court ruling in October that the agency has an unconstitutional structure. The ruling also gave President Trump the power to dismiss the current director at will and appoint his replacement anytime even before his term ends in 2018.

The agency which came into being after the 2010 Dodd-Frank reform law was enacted is among former President Obama’s main domestic policy achievements. The achievement is, however, unpopular with libertarians who think it has resulted in unplanned long-term commitments that shifts from the initial objective. Most libertarians feel the agency should either be reformed or disbanded.

A bill has already been introduced by Representative John Ratcliffe and Senator Ted Cruz to disband the agency. If the bill is passed prompting the disbandment of the CFPB, the move will be hugely controversial. Many banking sector players have warned against such a move claiming it will do more harm than good.

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.

Pension Scheme Could Earn Britons Hundreds of Pounds Monthly if Used Before April 5

Pension Scheme Could Earn Britons Hundreds of Pounds Monthly if Used Before April 5

Britons who have reached retirement age are being urged to increase their state pension income by taking advantage of a government offer that is due to be withdrawn on April 5th.

The scheme allows all Britons who missed out on the recent state pension introduced in 2016 to trade in a lump sum in exchange for a generous (index-linked) income for life. Any person who attained state pension age before 6th April 2016 has approximately two weeks to take advantage of the scheme which requires Class 3A national insurance as a pre qualification requirement.

According to Steve Webb, Former pension minister & Royal London policy director, retirement products working in a similar manner pay out two to three times higher than what annuities pay. Besides offering extra income, the scheme also offers a 50% payout to survivors when a pensioner dies.

In essence, a 65-year-old pensioner can trade in £8900 for £520 annually which would increase according to CPI inflation figures every year. The same pensioner would get just £195 annually or £347 after inflation adjustments if he/she bought an index-linked annuity.
The total cost of purchasing additional state pension under the top-up scheme depends on an individual’s age as well as the top-up amount. However, there is a maximum amount set at £25/week or £1,300/year. According to Mr. Webb, the scheme is attractive to individuals with a small pension/saving pot. The scheme is also attractive for women as well as individuals in good health since they are bound to live longer.

The scheme offers better value when compared with the annuity rates available today in the market. It’s a great way to boost a person’s recurrent income according to Mr. Webb. As a result, anyone who is eligible should consider taking advantage of the scheme before the April 5th deadline.

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.

Citizens Advice Calls For a Cost Cap on Doorstep Loans

Citizens Advice Calls For a Cost Cap on Doorstep Loans

Consumer charity, Citizens Advice, has called for a cost cap to be set on doorstep loans stating that the loans are responsible for increasing levels of unmanageable debt in the UK.

According to a Citizens Advice report on doorstep lending, the charity claims to have evidence indicating that doorstep lenders use high-pressure sales tactics coupled with poor affordability checks and aggressive debt collection practices. The charity states that it has helped approximately 23,600 borrowers with unmanageable doorstep loans in 2016. Citizens Advice estimates that more than 1.3 million UK citizens use doorstep loans.

The charity has called out UK’s financial services watchdog; the Financial Conduct Authority (FCA) to introduce a cost cap on the interest and fees charged on doorstep loans in the same way the watchdog put a cost cap on payday loans.
According to Citizens Advice, the new limit should ensure borrowers don’t pay more than (double) the amount borrowed in total charges. Currently, doorstep loans aren’t included in the FCA’s definition of high-cost credit which means they aren’t covered by the payday loan cost cap introduced recently.

Citizen Advice argues that an extension of the cost cap to cover doorstep loans will safeguard borrowers in financial distress even though there is no doorstep loans lender charging more than double the amount borrowed.

The charity has also gone ahead to state it would prefer to see the end of traditional doorstep loans marketed door-to-door as well as the current Financial Conduct Authority guidelines on responsible lending transformed into rules. The Charity also wishes for more stringent supervision on collection practices.

The three largest doorstep loan providers in the UK include; Morses Club PLC, Non-Standard Finance PLC, and Provident Financial PLC.

In response to Citizens Advice, Morses Club PLC C.E.O. Paul Smith stated that Morses Club customers value the lender’s service as is evident from the independent customer satisfaction surveys the company conducts. The survey scores over the past two years indicate that over 95% of Morses Club customers are happy. According to Smith, Morses Club prides itself in treating customers fairly in business processes as well as how the company’s agents/teams conduct themselves.

Morses Club also goes ahead and assesses the affordability of all its loans using high-tech technology ensuring that loans are issued only to those customers that are able to pay back. According to Smith, Morses Club has invested in costly software to ensure doorstep loan lending practices are above board. Smith also went ahead and stated that the affordability of Morses Club doorstep loans has decreased over the years dispelling the need for a cost cap as suggested by Citizens Advice.

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