by News Team on April 25th, 2008
The Office of Fair Trading (OFT) has welcomed a decision by the High Court to allow it to assess the fairness of unauthorised overdraft charges.
Such charges can often make matters worse for people struggling to become
debt free and it was the OFT that raised the issue of their fairness in the courts.
A series of further hearings are set to be carried out in an process the OFT hopes will ultimately enable it to oblige leading financial services firms in the UK to be less heavy-handed in how they levy charges against their current account customers.
Statements from the office explained: “This is an important early milestone for the OFT and our investigation into this area of high consumer interest.
“We are now analysing the implications of the judgment for our overall investigation into the fairness of the terms.”
Meanwhile, a report from MoneyExpert recently suggested that an increasing number of Britons are seeing their credit card applications turned down by the UK’s leading banking groups.
Posted in Creditor Behaviour, Debt Management, Personal Debt | No Comments »
by News Team on April 24th, 2008
The effects of the credit crunch could eventually see students struggling as a result of the financial constraints placed on their parents.
Many students face debt management issues soon after graduating and most rely to some extent on parental help with money and as the economy suffers mums and dads will be less able to offer assistance.
David Malcolm, head of social policy at the National Union of Students, said: “If parents are in a situation where they are suddenly paying more on their mortgage, more students will find that their parents won’t be able to support them.”
These concerns have not yet been evidenced by studies in the UK but Citigroup in the US has stopped offering loans to students and fears are rising that economic problems could soon have an impact on young Britons.
More and more families are being forced to house three generations under the same roof as a result of the debt management problems, a recent study from Prudential suggested.
Posted in Creditor Behaviour, Debt Management, Debt and Young People, Personal Debt | No Comments »
by News Team on April 24th, 2008
The Bank of England’s monetary policy committee (MPC) was split over the issue of where to set the base rate of interest when they met earlier this month, it has been revealed.
Minutes from the latest meeting showed that six members of the committee felt that a quarter point cut in borrowing costs was necessary, three others were convinced that no change was needed and one asserted that the rate should be reduced to 4.75 per cent.
Families across the country are struggling to clear their mortgage-related debt management problems and the recent cut in the base rate is supposed to reduce some of their financial burdens.
However, the principal concern for the MPC is keeping inflation in line with their targets and they were faced with the fact that the housing market has been weakening and becoming debt free is becoming more difficult for many consumers.
Cuts in the base rate of interest have been introduced by the Bank of England twice this so far and in December 2007.
Posted in Creditor Behaviour, Houses and Mortgages, Personal Debt | No Comments »
by News Team on April 24th, 2008
Many thousands of British couples are breaking up because of stress related to debt management problems, recent research has suggested.
Debt counselling charity Christians Against Poverty (Cap) polled its own clients and found that close to a quarter had parted ways with a partner because of difficulties in becoming debt free.
In addition, most of those quizzed said the same kind of problems had been behind arguments with loved ones and almost 70 per cent said their money worries have caused them health concerns.
Furthermore, two-thirds of those that took part in the study said they had gone without food on at least one occasion in order to make repayments on their debts.
“Our latest findings are truly shocking, highlighting the trauma that many families in debt face on a day-to-day basis,” said Matt Barlow, head of Cap in the UK.
British consumers pay out almost £259 million everyday to service the interest on their personal debts, according to figures compiled by Credit Action.
Posted in Debt Management, Personal Debt | No Comments »
by News Team on April 24th, 2008
Demand for debt among UK consumers is being constrained by the range of pressures on personal finances, it has been suggested.
According to the latest assessment from the British Bankers’ Association (BBA), fewer people are applying to their high street lenders for unsecured loans and credit card debt.
In addition, lenders have become more reluctant to offer unsecured loans, as well as mortgages, to people who do make the relevant applications, says the BBA.
As a result, the rate of consumer borrowing growth dipped by £0.2 billion during March and mortgage lending growth fell twice as far in the same period.
“The consequences of low banking sector liquidity show up clearly in March data; reduced product ranges and tighter criteria resulted in slower mortgage lending and significantly fewer loan approvals,” said the BBA’s statistics director David Dooks.
Last week, the Council of Mortgage Lenders indicated its own expectation that borrowing rates will slow across the country over the course of the next few months.
Posted in Creditor Behaviour, Debt Management, Houses and Mortgages, Personal Debt | No Comments »
by News Team on April 23rd, 2008
Broadband users across the UK are being stung by extra charges from their internet service providers, according to a new report.
A study by Moneysupermarket.com has suggested that almost one in four Britons with a broadband connection admit to only skim-reading their contract, which often has unforeseen and expensive consequences.
Millions of UK consumers are already struggling to become debt free and a quarter of all broadband users say they have been charged for services they did not expect or want to receive.
Internet firms will often charge their customers for the costs associated with setting up or moving a broadband connection and the price comparison company behind the research say it highlights the importance of reading contractual small print.
“With so many offers out there it’s easy to be blinded by the headlines and enter into a contract without thinking about what it entails,” said Moneysupermarket.com’s Rob Barnes.
“Remember, if something looks too good to be true, it probably is,” he added.
Last week, the UK payments association Apacs warned that internet-based fraud attacks resulted in losses around the country worth a total of £22.6 million in 2007.
Posted in Creditor Behaviour, Debt Management, Personal Debt | No Comments »
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