Top Financial Scams in The UK and What You Should do to Protect Yourself

Top Financial Scams in The UK and What You Should do to Protect Yourself

Financial scams have been estimated to cost innocent UK civilians approximately £10 billion a year.

Top financial scams

Although there are very many types of financial scams in the UK today, “goods not received” scams are the most popular today. As the name suggests, such scams are characterised by customers paying for goods or services which they never receive. What’s more interesting is; only a fraction of the people who are scammed this way (approximately 30%) report the incidences. This is according to Natwest statistics. The same statistics also show that most ”goods not received scams” happen online in auctions as well as marketplaces.

Invoice scams are the most expensive scams against businesses in the UK. On average, every UK business which falls prey to invoice scams loses £30,000. The scams occur when businesses receive invoices that appear to originate from trusted partners but are actually fake. The scammers usually communicate new payment arrangements i.e. the business in question should settle the invoice by sending money to a new account which in reality is operated by fraudsters and not the partner. Invoice scams are the 4th most popular types of financial scams in the UK. The second most popular financial scam in the UK is the; Advance fee scam followed by spoof payment request scam. Holiday scams fall fifth place.

How to protect yourself from financial scams

Protecting yourself against “goods not received” scams
To avoid the most common type of financial scam online, you need to be very cautious about where you shop online. First and foremost, you need to shop in reputable online stores only. It’s also advisable to check item descriptions carefully. You should also read the dispute resolution policy of the online store or online marketplace in question carefully before paying. Payment should also be made via recognised official payment services like PayPal which have effective dispute resolution channels and never through direct bank transfers off-site.

Protecting your business against invoice scams

As a business owner, you should never settle an invoice without getting into contact with your trusted business partner first. This should be procedural especially when there are any changes made to your payment arrangements. Since fraudsters have to send you correspondence in invoice scams informing you of a new bank account among other payment changes, you should consider official communication channels only and get in touch with trusted partners to discuss any new changes.

Protecting yourself against advance fee scams

Advance fee scams are scams where you are expected to pay a fee before you take advantage of offers/opportunities. You should never pay to access any offers/benefits or loans such as payday loans. Advance fee scammers are usually after the advance fee which appears small compared to the goods, services, benefits or opportunities you are expected to enjoy. Career opportunity and loan scams are among the most common types of advance fee scams. In career opportunity scams, job seekers are required to pay some money to access great employment/job opportunities. Never pay to access job opportunities or other financial opportunities without assessing the validity of those fees.

Signs of financial scams in texts, calls, emails and websites and how you should protect yourself

Scammers have to get in touch with you to scam you. Here’s how to identify a scammer by their texts, emails or website.

Texts: Scammers love sending suspicious texts. For instance, you may receive a text informing you that your bank account has been blocked and the action you should take going forward i.e. call a certain number. Never text back or call the number on the text. Instead, contact your bank using the official phone number.

Calls: Financial scammers also love cold calling. To avoid cold calling scams, never answer calls from suspicious numbers. If you do, hang-up immediately. Never answer any questions from strangers to avoid giving out sensitive personal information.
Emails: Scammers also love emailing their victims. They pose as reputable website support staff and send emails requiring some action i.e. clicking on a link. If you don’t pay close attention to the emails you receive and open, you are at risk of falling for email scams. Pay attention to spelling mistakes in emails. Also, never click suspicious links, pop-ups or attachments to avoid downloading malware among other harmful software into your computer.

Use social media responsibly: You should also be careful about the information you post online on your social media profiles to avoid being scammed. You should avoid posting any personal information online for the public to see i.e. phone numbers, address, etc. If you have to post such information, make sure you secure your account accordingly. Ideally, you should never post anything that introduces privacy risks.
Install a good antivirus: Most financial scams today happen or are facilitated online over unprotected computers. Having a good antivirus can help you detect and get rid of malicious software used to steal personal data and launch scams.

Report scams: You also need to report scams to protect yourself from scams in the future. Most scammers don’t stop launching scams until they are caught, so it is important to report scams even if you haven’t suffered any loss. If you think you have been scammed or you are about to be scammed in the UK, get in touch with Action Fraud immediately by following this link: http://www.actionfraud.police.uk/report_fraud

How to Launch a Payday Loan Complaint

How to Launch a Payday Loan Complaint

For a payday loan complaint to be launched, there must be some form of wrongdoing. With that said, you need to know your rights as a payday loan borrower. Complaints should be launched when you have a problem with a lender or when you have been mistreated.

Although payday loans are great for emergency cash needs, it’s easy for borrowers to be trapped in downwards spirals of debt. Payday loans are high-cost short-term loans which can easily get out of control when they are not paid within a month. In fact, most of the complaints the Financial Ombudsman Service (FOS) receives about payday loans revolve around cost.

There are also complaints about unfair lending terms. Some lenders have also been accused of coercing their clients to repay the loans. The latest statistics indicate that the Financial Ombudsman Service received 7,375 payday loan related complaints between April and September 2016. The FOS has been receiving about 7,000 payday related complaints per year indicating a sharp increase.

This is despite the regulatory controls put in place by the FCA. The FCA has also been cracking down irresponsible lenders in the UK. Nevertheless, payday borrowers continue to suffer. There are still many irresponsible payday loan lenders operating in the UK. So, how do you proceed if you fall victim to an irresponsible lender?
Many payday loan borrowers are aware of their rights now more than ever because of the recent focus on rogue lenders. Here’s a quick guide to launching a payday loan complaint.

When should you launch a complaint?

You should launch a payday loan complaint when; you start having problems affording your loans. For instance, if you struggle to afford a payday loan which appeared affordable initially, you have a right to launch an official complaint. Payday loan lenders are bound by law to give payday loans only to those people who can afford them. It’s also within your right to complain if your lender takes out payments unexpectedly from your account. Borrowers can also complain if they are harassed to make repayments. There are many other cases where you are entitled to complain. For instance, if you feel the lender didn’t adhere to the FCA interest and fees cap, you can also launch a formal complaint.

The process

Write a complaint letter to your payday loan lender.
To launch a payday loan complaint to the Financial Ombudsman Service, you have to inform your lender first in writing. You can also use online complaint tools like resolver.co.uk. On receiving your formal complaint, your lender has eight weeks to respond to your complaint. If they don’t respond or take appropriate or satisfactory action to resolve the issue, you are free to escalate the issue to the FOS.

The FOS has legal mandate to assess and provide independent decisions on payday loan complaints in the UK. You can reach the FOS by phone (0300 1239 123 or via its specialised page for payday loan complaints: http://financial-ombudsman.org.uk/keeps-you-awake/index.html)

The FOS offers payday loan complainants FREE services.

Compensation

The FOS is at liberty to decide if you are eligible for compensation based on the nature of your payday loan complaint. Compensation can come in many forms i.e. more time to clear your loan if you have been treated unfairly. The FOS can also recommend monetary compensation if you have been overcharged.

Recommendation

To avoid being a victim of rogue payday loan lenders, it’s important to borrow from reputable payday loan providers only like SwiftMoney. Reputable providers don’t overcharge their clients or subject them to unfair terms.

It’s also important to familiarise yourself with the rules. The FCA website has all the information you need to know about payday loan price caps. The website also has information on how payday loan lenders are supposed to conduct themselves.
The FOS website also has all the information you need about launching complaints. http://financial-ombudsman.org.uk/keeps-you-awake/index.html

It’s also advisable to seek financial help if you have financial trouble. Over reliance on payday loans every month is a sure sign that you need financial help. There are many free debt services in the UK you can talk to like stepchange.org, citizensadvice.org.uk and nationaldebtline.org.

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.

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.

How to Deal With Debt of a Lost Loved One

How to Deal With Debt of a Lost Loved One

Losing a loved one is painful. The experience becomes more painful when you are left with new debt. Fortunately, there are some steps you can take to cope with the situation. In case you don’t know what you need to do to deal with the debt of a lost loved one, follow the simple guide below.

Step 1: Take stock of the debt

Your first debt should be determining the amount as well as the type of debt they have. This step is crucial because it makes the situation clearer. You can’t be able to predict the type and amount of debt a lost love one has with accuracy without conducting a thorough investigation.

You should start by going through their financial statements/papers and then make a conclusive list of their debts. While doing this, remember to determine the type of debt i.e. individual or joint, secured or unsecured. It’s also important to check if the debts have a guarantor. All debts with a guarantor should be settled by the guarantor. It’s important to establish the type of debt because there are different ways of dealing as well as paying off different types of debt.

While individual debt (debt registered under one person) can be paid off by a loved one, i.e. a spouse or sibling, joint debt (debt registered under two or more people) should be paid off by the other registered individual/s when one individual dies.

If someone dies after taking secured debt (debt taken against an asset), such debt is already covered by the asset which simply means no one is liable for the debt. Mortgages and car loans are great examples of secured debt. Unsecured debt such as student loans and home improvement loans should be paid for even after someone dies.

You also need to check if they had any undisclosed debts (debts you didn’t know about). The best ways of discovering if your loved one had undisclosed debts is to advertise locally. By doing this, you give creditors time to forward their claims. You also avoid legal problems and inconveniences in the future.

Step 2: Paying off outstanding debts of a lost loved one

Once you take stock, you will have an accurate picture of the type and amount of debt your lost loved one has. To deal with the debt accordingly start by;

a. Contacting creditors: You need to contact all creditors and inform them about the death of your loved one. It is better to initiate communication rather than wait for the creditors to start calling demanding payment. Ask the creditors for formal letters or statements showing outstanding debt. Contacting creditors will buy you time and get rid of unnecessary stress while you go through the legal process of handling a person’s estate.

b. Check if they had insurance: After contacting creditors, you should check if your loved one insured his debt/s. Life insurance can cover mortgage debt and many other types of debt in case of death. There are other insurance covers that can settle outstanding debt. So, check if your loved one had insurance and if the cover can take care of any or all of the debt. You can then proceed by contacting the insurance company, launching a claim and then using the money to pay off the debt.

c. No insurance? If there is no insurance, contact the creditors and discuss ways of settling the debt.

d. Joint debt? If the debt in question belongs to your lost loved one among other parties, check the terms and conditions of the debt. If the terms transfer all the debt to the other parties in case of death, you can initiate a debt transfer process i.e. requesting the other parties to remove the name of your loved one from future bills.

e. Paying the debt: If you have to settle the debt of a lost loved one, pay in order of priority. If the deceased granted you administration of his/her estate through a will, you need to pay off their debts first before distributing the estate to heirs (if there are any). You should pay the debt after exhausting insurance funds, if any. Secured debt like mortgages and car loans should be paid first followed by unsecured debt such as credit card bills, unpaid rent, utility bills, etc. You should also consider selling assets which may be available. If the debt surpasses the value of the estate, you will be required to get professional advice from a lawyer or probate specialist. You can find a good legal professional in the UK here: http://solicitors.lawsociety.org.uk/

Step 3: What if I am struggling to pay off the debt of a lost loved one?

In case you are having difficulties paying off the debt of a lost loved one, you need to talk to a debt adviser to help you find a way forward. Debt advisers can help you find new ways of dealing with the debt. A debt adviser can also help you find benefits and entitlements you didn’t know about.

Summary

Losing a loved one results in a lot of misery if you are left with new debt to service. It is, however, possible to manage the debt of a lost love one if you are equipped with the right information. The most important steps are; taking stock of the debt, taking steps to pay the debt as well as seeking professional help if you encounter problems.

What You Need To Know About Consumerism

What You Need To Know About Consumerism

Consumerism can be defined as an economic and social ideology and order that encourages consumption or acquisition of goods/services in a never-ending cycle. Consumerism encourages purchasing and consumption of goods and services in excess of a person’s basic needs.

In economics, the term consumerism is used to refer to economic policies which encourage consumption. In a consumerist society, people are bombarded by adverts, discounts, product launches, product giveaways among many other promotions meant to encourage constant and significant spending on goods and services. Consumerism encourages pursuit for the ”good life”. This may come at the expense of things like saving and investing.

History and rise of consumerism

Consumerism can be traced back to the onset of capitalism in the 16th century in Europe. Consumerism intensified in the eighteen century because of a growing middle class that embraced luxury consumption. The eighteen century also saw an increasing interest in fashion rather than necessity as a determinant for purchasing. The growth of consumerism can also be attributed to politics and economics. For countries to thrive politically and economically, capitalist competition for profits and markets had to be at the core of every country’s agenda. Colonialism has also been attributed as one of the major drivers of consumerism.

Colonialists had to look for markets for their goods by creating demand because there was supply. The industrial revolution also spurred consumerism as the number of consumer products increased in the market due to the increasing use of machines. Over many decades, buying goods/services became a way of life in Britain and many other parts of the world. The consumerist culture continues today. It encourages spending on consumer items like cars, clothes, shoes, and gadgets instead of saving and investing. Consumers buy goods and services to keep up with fashion/trends. The search for better goods is never-ending.

The rise of consumerism today is evident in both developing and developed countries. This can be seen in the mass production of luxury goods. The media is also saturated with advertisements. Personal debt levels are also rising globally which is an indication of more people buying goods excessively on impulse or without proper financial planning. Other evident signs of consumerism include product innovation.

Benefits of consumerism

1. Economic growth:

Consumerism drives economic growth. When people spend more on goods/services produced in a never-ending cycle, the economy grows. There is increased production and employment which leads to more consumption. The living standards of people are also bound to improve because of consumerism.

2. Boosts innovation and creativity:

Since consumers are actively looking for the next-best products/services to buy, producers/manufacturers are under constant pressure to innovate. As consumers access better goods/services, living standards improve.

Cons of consumerism

1. Environmental degradation:

Increasing demand for goods put extensive pressure on natural resources such as water and raw materials. Consumerism also results in the excessive use of energy. Consumerism also encourages the use of chemicals which are known to degrade the environment. In a nutshell, consumerism does more harm than good to the environment.

2. Moral degradation:

Increasing consumerism tends to shift away societies from important values such as integrity. Instead, there is a strong focus on materialism and competition. People tend to buy goods and services they don’t need so that they can be at par or at a higher level than everyone else.

3. Higher debt levels:

Consumerism also increases debt levels in a society. The number of people taking short term loans such as payday loans to buy luxury goods has increased drastically. Many short-term loans aren’t channeled into constructive use today.

4. Mental health problems:

Consumerism increases debt levels which in turn results in mental health problems like stress and depression. Trying to follow the latest trends when you have limited resources can be very exhausting to the mind and body. Consumerism forces people to work harder, borrow more and spend less time with loved ones. Consumerism gets in the way of fruitful relationships. It affects the overall well-being of people negatively in the long run since research has proven that people don’t get valuable and long-lasting fulfilment from materialism.

Summary

Consumerism has a good and bad side. Although consumerism drives economic growth and boosts innovation, it comes with a fair share of problems ranging from environmental and moral degradation to higher debt levels and mental health problems. Since we are already in a consumerist society, it is advisable to strike a healthy balance. A person’s love for the finer things in life should not come at the expense of his/her mental health and financial stability.

Consumer Spending Statistics in the UK: What Does the Average British Family Spend Their Money On?

Consumer Spending Statistics in the UK: What Does the Average British Family Spend Their Money On?

If you care to get accurate insights on what British families spend their money on, look no further. Below is a summary from the ONS (Office for National Statistics) in the UK. The information highlights family spending as of 2016.

Overview

According to the latest ONS statistics, the average weekly household spending remains at £528.90 for the year ending 2016. Most low-income households in the UK continue to spend a higher portion of their income on food and energy bills compared to high-income households.

Mobile communication costs have risen significantly. Over 50% of all the money spent by UK households on communication is spent on mobile phone related costs. Expenditure on tobacco, alcohol, and narcotics has fallen below £12 for the first time. Expenditure on restaurants and hotels has however risen by over £45 a week. This is the 1st time this has happened in 5 years. Below are important background spending statistics.

Total spending

Average spending remains at £528.90. However, when adjusted for inflation, spending appears to have increased but is not yet at the levels experienced before the 2007 economic turndown.

When you compare expenditure against other economic indicators like the GDP (Gross Domestic Product), output has grown steadily. The employment rate has also increased. The average earnings and median disposable income has also increased (after being adjusted for inflation). However, disposable income grew at a slower pace for the richest 1/5th households. The median income for UK’s richest households has fallen since the 2007/2008 economic downturn.

Inflation

The prices of goods and services affect spending patterns. Inflation shows the rate at which the prices of goods/services rise or fall. During the financial year 2015/2016, inflation as per the consumer prices index was significantly lower compared to the previous financial year. In fact, the UK entered a deflation period which simply means the cost of goods/services remained the same or became cheaper in 2015/2016.

Consumer confidence

Consumer confidence increased during the last financial year. The UK has been on an upward trend in regards to consumer spending since the 2007/2008 economic downturn. Consumer confidence has increased significantly since 2013.

Household expenditure according to category

The average British household spends the most on transport, housing, fuel and power bills. The average amount of money spent per week on transport in the financial year 2015/2016 was £72.70. The highest expenditure was on fuel costs i.e. petrol and diesel costs. Compared to the previous financial year, the average expenditure on transport remains unchanged. The overall spending on motor fuels decreased this financial year due to the drop in crude oil prices globally. Also, more Britons bought new and second-hand cars this year compared to last year. There was an increase in uptake of loans for buying new vehicles.

Britons spent the least on education i.e. £7 per week (1% of the total expenditure). Transport costs were the highest at £72.70 per week followed by housing, fuel and power costs at £72.50 (both 14%). The third highest expenditure was on recreation and culture at £68 per week followed by food and nonalcoholic drinks (£56.8), restaurant and hotels (£45.1), miscellaneous goods/service (£39.7), household goods and services (£35.5), clothing and footwear (£23.5) and communication (£16). British households spend £11.4 on alcohol, tobacco and narcotics and £7.2 on health.

Household expenditure according to region

London households have the highest average expenditure at £652.40 per week. The North East region has the lowest household expenditure at £423.50 primarily because of lower housing costs. The highest expenditure category for most regions is transport, housing, fuel, and power. As a result, it doesn’t really matter when you live in Britain. Most Britons spend most of their money on transport, housing, fuel, and power. There are however a few exceptions. In the North East, North West as well as Yorkshire & the Humber for instance, families spend the most on recreation and culture.

Other important spending statistics/information

The latest spending statistics indicate that low-income households spend more on food and non-alcoholic drinks. Most of the money spent on food goes to milk, bread, and groceries. While low-income households spend most of their food budget on basic groceries, higher-income households spend most of their food money on vegetables. In general, households with less income have less money to spend on nonessentials.

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.