Lloyds ended 2010 in much the same "spirit" as it besported itself during the year, by mistakenly double charging some 200,000 of its credit/debit card customers for transactions effectuated on New Year's Eve.
Well done lads!
Well done lads!
Showing posts with label credit cards. Show all posts
Showing posts with label credit cards. Show all posts
Thursday, January 6, 2011
Tuesday, February 16, 2010
The Prostrate Cows
The UK credit card industry has long regarded their hapless customers as being akin to prostrate cows, ready and willing to be milked dry.
To some extent, given the appalling naivety of some customers when taking on debts that they cannot afford to pay, it is hardly surprising that the credit card companies hold this view.
However, the card companies are now charging rates that many could argue with some justification are simply "taking the piss" out of the prostrate cows.
Moneyfacts reports that interest rates on credit cards are now at their highest level for 12 years. The average rate charged is now 18.8%, despite the fact that the bank rate (ignored by the financial services industry, apart from when setting savings rates) is at a mere 0.5%.
The card companies, to some extent can argue that the rise in rates is as a result of the increasing levels of defaults. The Bank of England have published figures that show that write offs have doubled to £1.6BN in the third quarter of 2009.
Fair point, maybe.
However, did the banks and credit card companies not conduct a due diligence on their customers before granting them these loans?
Surely they are themselves partially responsible for their losses?
To some extent, given the appalling naivety of some customers when taking on debts that they cannot afford to pay, it is hardly surprising that the credit card companies hold this view.
However, the card companies are now charging rates that many could argue with some justification are simply "taking the piss" out of the prostrate cows.
Moneyfacts reports that interest rates on credit cards are now at their highest level for 12 years. The average rate charged is now 18.8%, despite the fact that the bank rate (ignored by the financial services industry, apart from when setting savings rates) is at a mere 0.5%.
The card companies, to some extent can argue that the rise in rates is as a result of the increasing levels of defaults. The Bank of England have published figures that show that write offs have doubled to £1.6BN in the third quarter of 2009.
Fair point, maybe.
However, did the banks and credit card companies not conduct a due diligence on their customers before granting them these loans?
Surely they are themselves partially responsible for their losses?
Monday, January 11, 2010
Credit Cards Funding Mortgage Payments?
The housing charity "Shelter" claims that over a million people have used a credit card to make a mortgage payment in the last 12 months.
Shelter go on to warn that people who have used credit cards to pay their mortgages risked losing their homes, as credit card companies have to recover their debts and are not subject to the same rules as mortgage lenders.
There are a number of anomalies in Shelter's analysis:
1 Credit cards cannot be used directly to pay mortgage companies. Credit card cheques could be used, or credit cards used on other purchases thereby freeing up cash to pay the mortgage.
2 Credit card companies have no charge over the property. They are unsecured, and as such would have to apply CCJ's and other debt recovery methods to recover their debt. The end result may be the loss of a home. However, the implication that the card companies have a charge over the home is alarmist.
Shelter go on to warn that people who have used credit cards to pay their mortgages risked losing their homes, as credit card companies have to recover their debts and are not subject to the same rules as mortgage lenders.
There are a number of anomalies in Shelter's analysis:
1 Credit cards cannot be used directly to pay mortgage companies. Credit card cheques could be used, or credit cards used on other purchases thereby freeing up cash to pay the mortgage.
2 Credit card companies have no charge over the property. They are unsecured, and as such would have to apply CCJ's and other debt recovery methods to recover their debt. The end result may be the loss of a home. However, the implication that the card companies have a charge over the home is alarmist.
Monday, November 9, 2009
Prostrate Cows
Those UK citizens who rely on credit cards to fund their day to day living are in for an unpleasant shock, as rates will increase and annual fees will be introduced.
PricewaterhouseCooper says that the increase in rates and imposition of fees is because lenders face extra regulation, difficulties in obtaining cheap funding and significant increases in bad debts (estimated at being around 9%).
That maybe so.
However, given that the rates on many cards are already close to 30% exactly how much of the increase is out of true necessity (in order for the card companies to remain in business) and how much is down to the fact that the card companies view and treat their customers as prostrate milch cows?
PricewaterhouseCooper says that the increase in rates and imposition of fees is because lenders face extra regulation, difficulties in obtaining cheap funding and significant increases in bad debts (estimated at being around 9%).
That maybe so.
However, given that the rates on many cards are already close to 30% exactly how much of the increase is out of true necessity (in order for the card companies to remain in business) and how much is down to the fact that the card companies view and treat their customers as prostrate milch cows?
Tuesday, October 27, 2009
A Gnat's Piss On The Dung Heap of Debt
The government, in attempt to shut the stable door long after the horse has bolted, has come up with some proposals theoretically designed to force credit card companies to help customers reduce their debt.
Card companies will be forced to allow customers to pay off their most expensive debts first, rather than pay off the cheaper debts and allow charges to accrue for higher interest debt.
The minimum monthly repayment level would also be increased, to encourage people to pay off their debt faster.
The government said:
"Around one-third of people who don't pay off their credit card bill in full each month make only the minimum repayment. This can mean consumers take decades to pay off the debt."
Indeed so, but this is most likely due to the fact that they cannot afford to pay off much more than the minimum.
By forcing those already in debt to pay a greater amount, the government is in danger of pushing many hard pressed families over the "financial edge".
The government also proposes to ban the practice of credit card companies automatically increasing credit limits, without specific authorisation from their customers.
Will they also ban card companies from arbitrarily cutting credit limits on those card holders with good credit records, who clear their debts each month?
The government also wants tighter rules imposed on increasing the interest rate on existing debt without "proper explanation".
That will not make not one jot of difference to this rip off practices employed by card companies. They will continue to increase rates based on the "explanation" that they are finding their margins squeezed by "difficult trading conditions".
Until there is a thorough independent investigation of the make up/rationale of companies' charges, and the quasi "price fixing" scheme of arrangement wrt this practice operated by the companies, they will continue to charge what they like, because they know that they can get away with it.
The proposals are open to consultation until January 19 2010.
This particular horse has long since bolted and the British consumer is hopelessly mired in debt, these proposals are little more than a "gnat's piss" on the dung heap of debt that has been created by the Faustian collusion between greedy consumers and lenders.
Card companies will be forced to allow customers to pay off their most expensive debts first, rather than pay off the cheaper debts and allow charges to accrue for higher interest debt.
The minimum monthly repayment level would also be increased, to encourage people to pay off their debt faster.
The government said:
"Around one-third of people who don't pay off their credit card bill in full each month make only the minimum repayment. This can mean consumers take decades to pay off the debt."
Indeed so, but this is most likely due to the fact that they cannot afford to pay off much more than the minimum.
By forcing those already in debt to pay a greater amount, the government is in danger of pushing many hard pressed families over the "financial edge".
The government also proposes to ban the practice of credit card companies automatically increasing credit limits, without specific authorisation from their customers.
Will they also ban card companies from arbitrarily cutting credit limits on those card holders with good credit records, who clear their debts each month?
The government also wants tighter rules imposed on increasing the interest rate on existing debt without "proper explanation".
That will not make not one jot of difference to this rip off practices employed by card companies. They will continue to increase rates based on the "explanation" that they are finding their margins squeezed by "difficult trading conditions".
Until there is a thorough independent investigation of the make up/rationale of companies' charges, and the quasi "price fixing" scheme of arrangement wrt this practice operated by the companies, they will continue to charge what they like, because they know that they can get away with it.
The proposals are open to consultation until January 19 2010.
This particular horse has long since bolted and the British consumer is hopelessly mired in debt, these proposals are little more than a "gnat's piss" on the dung heap of debt that has been created by the Faustian collusion between greedy consumers and lenders.
Friday, October 2, 2009
Advice To The Co-operative Bank III
Despite sending the Co-operative Bank several emails and going through the tortuous phone menu to try to remove my number from their database, it would seem that the Co-operative Bank is either asleep or remarkably incompetent.
I am still being plagued by calls from their computerised call centre, asking for a woman who is unknown for me.
Today I have emailed them again, this time using the email addresses of several members of their PR department.
Suffice to say, my experience of this bank leads me to conclude that it is very poorly run.
Here are few emails addresses for their "PR" people. Those of you are also experiencing harassment from the Co-operative Bank may find them useful:
cfsinvestorrelations@cfs.coop
public.relations@britannia.co.uk
duncan.bowker@cfs.coop
catherine.laycock@cfs.coop
andy.hammerton@cfs.coop
russell.brady@cfs.coop
Here is the email of David Anderson, the CEO of Co-op Financial Services david.anderson@cfs.coop
UPDATE
Third call received today from these idiots.
I am still being plagued by calls from their computerised call centre, asking for a woman who is unknown for me.
Today I have emailed them again, this time using the email addresses of several members of their PR department.
Suffice to say, my experience of this bank leads me to conclude that it is very poorly run.
Here are few emails addresses for their "PR" people. Those of you are also experiencing harassment from the Co-operative Bank may find them useful:
cfsinvestorrelations@cfs.coop
public.relations@britannia.co.uk
duncan.bowker@cfs.coop
catherine.laycock@cfs.coop
andy.hammerton@cfs.coop
russell.brady@cfs.coop
Here is the email of David Anderson, the CEO of Co-op Financial Services david.anderson@cfs.coop
UPDATE
Third call received today from these idiots.
Tuesday, September 29, 2009
Advice To The Co-operative Bank II
Despite forwarding the Co-operative Bank with a copy of my piece the other day about being bombarded with calls from their automated dialler, and despite pressing the correct buttons on my phone to remove my number from their database, they persist in calling me and asking for an unknown female.
Are these people completely incompetent?
I am very glad that I do not have an account with them, but wonder what it will take to get them to stop ringing me?
Are these people completely incompetent?
I am very glad that I do not have an account with them, but wonder what it will take to get them to stop ringing me?
Thursday, September 24, 2009
Advice To The Co-operative Bank
Yesterday I was plagued by calls from this number 08453550305.
An automated system kept calling with a pre recorded message, allegedly from the Co-operative Bank, asking for an unknown lady (not myself or anyone known to me) to press a button in order to speak to an operator.
Not unreasonably I hung up each time, as it bore all the hallmarks of a scam.
However, on conducting some research into the matter I see that in fact this is the preferred means of contact that the Co-operative Bank employs when chasing its customers (I am not a customer of the bank).
The fact that many people have complained to the bank (see this site for examples), telling them that it sounds like a scam, and as such they hang up, appears to matter not one jot to the bank.
They continue to use this system; plaguing their customers and non customers (such as myself) morning, noon and night.
My advice to the Co-operative Bank is simple:
1 Do not use automated systems to contact your customers.
2 Listen to the complaints for your customers, and innocent third parties.
3 Take my phone number off your database.
In the event that you are plagued by calls from the Co-operative Bank, call 0161 837 8769 and ask for the Chief Executive's Office.
An automated system kept calling with a pre recorded message, allegedly from the Co-operative Bank, asking for an unknown lady (not myself or anyone known to me) to press a button in order to speak to an operator.
Not unreasonably I hung up each time, as it bore all the hallmarks of a scam.
However, on conducting some research into the matter I see that in fact this is the preferred means of contact that the Co-operative Bank employs when chasing its customers (I am not a customer of the bank).
The fact that many people have complained to the bank (see this site for examples), telling them that it sounds like a scam, and as such they hang up, appears to matter not one jot to the bank.
They continue to use this system; plaguing their customers and non customers (such as myself) morning, noon and night.
My advice to the Co-operative Bank is simple:
1 Do not use automated systems to contact your customers.
2 Listen to the complaints for your customers, and innocent third parties.
3 Take my phone number off your database.
In the event that you are plagued by calls from the Co-operative Bank, call 0161 837 8769 and ask for the Chief Executive's Office.
Monday, September 21, 2009
A Dose of The Clampis
The Times warns that there is a highly sophisticated Trojan virus, Clampi, on the loose that steals online banking log-in details from infected computers.
The Clampi virus is spreading rapidly across hundreds of thousands of computers in Britain and the US.
The virus captures log-in and password information wrt financial sites, and sends it to a server run by the cyber criminals. They can then tell the compromised computer to send money to accounts that they control, or they can buy goods with the stolen credit card details.
The virus has a list of more than 4,500 finance-related websites that it monitors, including British high street banks.
Security experts warned that it was one of the stealthiest and most pervasive threats to computers using the Microsoft Windows operating systems.
Monitor your accounts closely.
The Clampi virus is spreading rapidly across hundreds of thousands of computers in Britain and the US.
The virus captures log-in and password information wrt financial sites, and sends it to a server run by the cyber criminals. They can then tell the compromised computer to send money to accounts that they control, or they can buy goods with the stolen credit card details.
The virus has a list of more than 4,500 finance-related websites that it monitors, including British high street banks.
Security experts warned that it was one of the stealthiest and most pervasive threats to computers using the Microsoft Windows operating systems.
Monitor your accounts closely.
Friday, August 21, 2009
The Banking Rip Off
As I have noted before, the financial services industry in the UK has an unfailing knack for digging itself deeper into its own shit.
Not content with foisting endowment mortgages, PPI, excess credit card rates, bank charges and other insults on its hapless customers it now seeks to milk them further by "imaginative" and outrageous profiteering charges on mortgage arrears.
Many thousands of homebuyers, many of whom are unemployed, face profiteering penalty charges on top of their regular monthly mortgage repayments.
The Council of Mortgage Lenders (CML) report that the number of mortgages in arrears by three months or more has reached 270,400 (compared with 152,700 at the end of the second quarter of 2008).
Moneysupermarket.com report that Lloyds Group is charging £206 for repayments three months or more in arrears.
GMAC and Abbey charge penalties of £50 and £40, respectively, when the borrower is only one month in arrears.
Halifax charges £35 for every call/letter wrt mortgage arrears, and then has the barefaced cheek to charge £100 for debt advice.
The FSA has a Code of Conduct that requires that lenders treat customers fairly sympathetically.
Evidently the banks haven't read that code, or simply do not care about it.
The Treasury Select Committee is not impressed with either the banks, or the hapless and hopeless FSA. It has attacked the FSA for sitting on its hands.
Britain's financial services industry is rotten to its core.
Until the FSA is expunged from history, and replaced with a more pro active assertive regulatory body, the hapless British consumer can only expect more of the same and continue to be ripped off.
Those who currently are enjoying the fruits of their profiteering should bear in mind the wise adage:
"What goes around, comes around".
Not content with foisting endowment mortgages, PPI, excess credit card rates, bank charges and other insults on its hapless customers it now seeks to milk them further by "imaginative" and outrageous profiteering charges on mortgage arrears.
Many thousands of homebuyers, many of whom are unemployed, face profiteering penalty charges on top of their regular monthly mortgage repayments.
The Council of Mortgage Lenders (CML) report that the number of mortgages in arrears by three months or more has reached 270,400 (compared with 152,700 at the end of the second quarter of 2008).
Moneysupermarket.com report that Lloyds Group is charging £206 for repayments three months or more in arrears.
GMAC and Abbey charge penalties of £50 and £40, respectively, when the borrower is only one month in arrears.
Halifax charges £35 for every call/letter wrt mortgage arrears, and then has the barefaced cheek to charge £100 for debt advice.
The FSA has a Code of Conduct that requires that lenders treat customers fairly sympathetically.
Evidently the banks haven't read that code, or simply do not care about it.
The Treasury Select Committee is not impressed with either the banks, or the hapless and hopeless FSA. It has attacked the FSA for sitting on its hands.
Britain's financial services industry is rotten to its core.
Until the FSA is expunged from history, and replaced with a more pro active assertive regulatory body, the hapless British consumer can only expect more of the same and continue to be ripped off.
Those who currently are enjoying the fruits of their profiteering should bear in mind the wise adage:
"What goes around, comes around".
Thursday, July 2, 2009
Credit Card Companies Given a Slap
The Consumer White Paper, published today, proposes a number of measures that will change how credit card firms interact with their customers:
- they will be banned from raising credit limits without asking the customer first
- unsolicited credit card cheques will be banned
- they will not be able to raise interest rates on existing debts
- repayments will have to be put towards paying off the most expensive debt, rather than the cheapest as most now do.
However, there is of a course downside, monthly payments will have to rise. Which ironically will hit hardest that section of the community (ie the poor and debt burdened) which the White Paper allegedly was meant to help.
Have they really thought this through?
Surely a better course of action would have been to pressurise the companies to reduce their extortionate interest rates (17% or more), in the face of base rates that are 0.5%?
- they will be banned from raising credit limits without asking the customer first
- unsolicited credit card cheques will be banned
- they will not be able to raise interest rates on existing debts
- repayments will have to be put towards paying off the most expensive debt, rather than the cheapest as most now do.
However, there is of a course downside, monthly payments will have to rise. Which ironically will hit hardest that section of the community (ie the poor and debt burdened) which the White Paper allegedly was meant to help.
Have they really thought this through?
Surely a better course of action would have been to pressurise the companies to reduce their extortionate interest rates (17% or more), in the face of base rates that are 0.5%?
Wednesday, June 24, 2009
Setanta
Setanta, the over hyped sports channel, went off the air last night at 6PM when it went into administration.
Despite the fact it was long teetering on the edge of administration, it happily continued advertising right up to the bitter end. Quite what happens to the subscriptions of those foolish enough to have bought into the hype in the few days before it went bust is not clear.
In theory, if they bought via credit card, they should have nothing to worry about as card companies offer insurance for just such occurrences. However, some credit card companies are more than happy to look for any excuse to not pay up; the fact that it was obvious that Setanta was going into administration may provide them with just such an excuse.
Despite the fact it was long teetering on the edge of administration, it happily continued advertising right up to the bitter end. Quite what happens to the subscriptions of those foolish enough to have bought into the hype in the few days before it went bust is not clear.
In theory, if they bought via credit card, they should have nothing to worry about as card companies offer insurance for just such occurrences. However, some credit card companies are more than happy to look for any excuse to not pay up; the fact that it was obvious that Setanta was going into administration may provide them with just such an excuse.
Wednesday, April 15, 2009
The PPI Rip Off
The financial services industry doesn't seem to yet get the point that its reputation is in tatters; not just because of the recession brought about by the greed and stupidity of the banks, but because of a number of issues over the years that impugn its integrity and honesty eg endowment misselling, payment protection insurance (PPI), bank charges, debt collection, credit agreements etc.
Not content with having already severely tarnished its reputation wrt PPI, the insurance industry is seeking to further gouge its own self inflicted wounds by increasing the cost of PPI policies and reducing the actual cover provided.
The Times reports that millions are facing a 50% rise in the cost of PPI cover. Indeed the cost of some PPI policies has already increased by 170% over the last year. The Post Office has written to its PPI customers warning them that it plans to cut the maximum payment in the event of redundancy, and double the cost of some premiums.
Those who clamour for greater regulation of the financial services industry should remain calm, the addiction of those in the industry to destroying their own reputations will ensure that there will be very little remaining of the UK's financial services industry to regulate in ten years time.
By then people will have finally woken up to the fact that they have been ripped off on a continual basis, and will simply resort to putting their money under their mattresses as their grandparents used to do.
The financial services industry will be the author of its own downfall.
Not content with having already severely tarnished its reputation wrt PPI, the insurance industry is seeking to further gouge its own self inflicted wounds by increasing the cost of PPI policies and reducing the actual cover provided.
The Times reports that millions are facing a 50% rise in the cost of PPI cover. Indeed the cost of some PPI policies has already increased by 170% over the last year. The Post Office has written to its PPI customers warning them that it plans to cut the maximum payment in the event of redundancy, and double the cost of some premiums.
Those who clamour for greater regulation of the financial services industry should remain calm, the addiction of those in the industry to destroying their own reputations will ensure that there will be very little remaining of the UK's financial services industry to regulate in ten years time.
By then people will have finally woken up to the fact that they have been ripped off on a continual basis, and will simply resort to putting their money under their mattresses as their grandparents used to do.
The financial services industry will be the author of its own downfall.
Thursday, December 11, 2008
Egg Fined by FSA
Egg, the Internet bank, has been fined £721K by the FSA for serious failings in the way it sold payment protection insurance (PPI) to its credit card customers. The FSA has also ordered it to pay compensation, which could cost £10M.
The FSA found that Egg had instructed sales staff to use hard-sell techniques on those who proved reluctant buyers.
These included over-emphasising the benefits of the cover, or telling customers they could take it out for free for a limited period and then cancel. The Guardian notes that Egg, in some cases, applied the cover to a customer's credit card even when they had not agreed to buy it.
Is it any wonder people despise the banks?
PPI misselling ranks with the misselling of endowment mortgages and personal pensions as one of the major financial scandals of the last 20 years. The bottom line being that PPI is overpriced and in many cases when a claim is made useless, as the insurers do their best to wriggle out of their obligations.
The FSA said telephone sales by Egg staff of PPI failed in its standard tests in 40% of cases between January 2005 and December 2007. Egg sold more than 106,000 PPI policies at an average cost of £156 during that period.
Egg will now write to customers who bought the cover, offering them the chance to cancel their policy and get a full refund. The FSA said that if everyone claims a refund, the bank would face a charge of over £10M.
The FSA found that Egg had instructed sales staff to use hard-sell techniques on those who proved reluctant buyers.
These included over-emphasising the benefits of the cover, or telling customers they could take it out for free for a limited period and then cancel. The Guardian notes that Egg, in some cases, applied the cover to a customer's credit card even when they had not agreed to buy it.
Is it any wonder people despise the banks?
PPI misselling ranks with the misselling of endowment mortgages and personal pensions as one of the major financial scandals of the last 20 years. The bottom line being that PPI is overpriced and in many cases when a claim is made useless, as the insurers do their best to wriggle out of their obligations.
The FSA said telephone sales by Egg staff of PPI failed in its standard tests in 40% of cases between January 2005 and December 2007. Egg sold more than 106,000 PPI policies at an average cost of £156 during that period.
Egg will now write to customers who bought the cover, offering them the chance to cancel their policy and get a full refund. The FSA said that if everyone claims a refund, the bank would face a charge of over £10M.
Wednesday, November 12, 2008
Back on Track
Three mainstream mortgage lenders have relaunched their tracker mortgages, since last week's mass exodus following the 1.5% cut in interest rates.
- Abbey has introduced a two year tracker at 4.99% (1.99% above base, being 0.7% higher above base than its previous tracker)
- Lloyds TSB has introduced a tracker at 4.79% (1.99% above base, being 0.7% higher above base than its previous tracker)
- Alliance & Leicester has introduced a new tracker at 4.89% with a 1% fee.
Strange that they increase their margins, when the rates are falling. However, borrowers should be grateful for small mercies that they are at least offering trackers.
Meanwhile a survey of more than 200 cards by Defaqto, a banking research group, found that the cost of borrowing on credit cards rose to 17.6% cent and rates on store cards rose to 25%, with some companies increasing rates by up to 10% overnight.
How strange!
Surely the credit card companies are not trying to profiteer from this crisis?
- Abbey has introduced a two year tracker at 4.99% (1.99% above base, being 0.7% higher above base than its previous tracker)
- Lloyds TSB has introduced a tracker at 4.79% (1.99% above base, being 0.7% higher above base than its previous tracker)
- Alliance & Leicester has introduced a new tracker at 4.89% with a 1% fee.
Strange that they increase their margins, when the rates are falling. However, borrowers should be grateful for small mercies that they are at least offering trackers.
Meanwhile a survey of more than 200 cards by Defaqto, a banking research group, found that the cost of borrowing on credit cards rose to 17.6% cent and rates on store cards rose to 25%, with some companies increasing rates by up to 10% overnight.
How strange!
Surely the credit card companies are not trying to profiteer from this crisis?
Monday, April 21, 2008
The Rescue Package
As expected the Bank of England has announced its rescue package, designed to unthaw the liquidity freeze.
The initial scheme will be for £50BN, the Bank will allow lenders to swap assets (including credit card debt) for government backed bonds.
Mervyn King, the Governor of the Bank, is quoted in The Times:
"The Bank of England's special liquidity scheme is designed to improve the liquidity position of the banking system and raise confidence in financial markets while ensuring that the risk of losses on the loans they have made remains with the banks."
In the event that £50BN is not enough, the package will be increased to £100BN.
It is a pity that it has taken so long for the Bank and government to act.
The initial scheme will be for £50BN, the Bank will allow lenders to swap assets (including credit card debt) for government backed bonds.
Mervyn King, the Governor of the Bank, is quoted in The Times:
"The Bank of England's special liquidity scheme is designed to improve the liquidity position of the banking system and raise confidence in financial markets while ensuring that the risk of losses on the loans they have made remains with the banks."
In the event that £50BN is not enough, the package will be increased to £100BN.
It is a pity that it has taken so long for the Bank and government to act.
Monday, March 31, 2008
New Bank Code
Today the new voluntary bank code comes into effect, which will "in theory" require banks and building societies to do more to help customers in financial difficulties.
The new code states that banks must contact customers that they think may be heading toward debt problems, until now the onus has been on the individual to contact the bank.
Consumer group Which? said the new code should have gone further, such as raising minimum credit card repayments.
Banks must now assess whether people will be able to repay their debt, before they are given new loans or have their credit limits increased. They must look at customers' credit ratings, and take into account their income and other financial commitments.
Surely they they were doing this anyway?
The new code states that banks must contact customers that they think may be heading toward debt problems, until now the onus has been on the individual to contact the bank.
Consumer group Which? said the new code should have gone further, such as raising minimum credit card repayments.
Banks must now assess whether people will be able to repay their debt, before they are given new loans or have their credit limits increased. They must look at customers' credit ratings, and take into account their income and other financial commitments.
Surely they they were doing this anyway?
Tuesday, March 25, 2008
The Sharks are Circling
The ongoing credit crunch has caused banks and finance companies to withdraw many of their mainstream products, and to tighten their lending criteria. As such, it should come as no surprise to learn that the vacuum left is now being filled by loan sharks who charge extortionate rates of interest (100% or more) to those who are desperate for credit.
The Times reports that debt campaigners have seen many clients forced to borrow at extortionate interest rates, because they have had their credit cards cut off or have been refused loans.
The Financial Services Authority (FSA) estimates that up to seven million people had difficulty gaining mainstream credit, and Citizens Advice reports that mortgage arrears problems had gone up by 35% in the first two months of 2008, compared with the same period last year. Citizens Advice bureaux said that they had dealt with 215,000 new debt problems in January and February.
The credit crunch is now adversely affecting the "man in the street". The Bank of England and Gordon Brown, who claim that the economy is sound and stable, need to wake up to the fact that people should not be placed in a situation where they are forced to borrow at "criminal" rates of interest merely to put food on the table.
The Times reports that debt campaigners have seen many clients forced to borrow at extortionate interest rates, because they have had their credit cards cut off or have been refused loans.
The Financial Services Authority (FSA) estimates that up to seven million people had difficulty gaining mainstream credit, and Citizens Advice reports that mortgage arrears problems had gone up by 35% in the first two months of 2008, compared with the same period last year. Citizens Advice bureaux said that they had dealt with 215,000 new debt problems in January and February.
The credit crunch is now adversely affecting the "man in the street". The Bank of England and Gordon Brown, who claim that the economy is sound and stable, need to wake up to the fact that people should not be placed in a situation where they are forced to borrow at "criminal" rates of interest merely to put food on the table.
Wednesday, March 12, 2008
Egg on its Face
Ian Kerr, the chief executive of Egg, has resigned in the wake of the public relations disaster in which Egg was accused of unfairly withdrawing credit cards from thousands of responsible customers.
Egg, in an act of sheer folly, last month sent out a letter to 161,000 card users telling them that their agreements would be terminated in 35 days because they had a "higher than acceptable risk profile".
The reality being widely touted in the media and by experts was that Egg was dumping customers who paid off their debts on time, these were deemed to be unprofitable.
Labour MP Nigel Griffiths is quoted in The Times:
"I don't believe in pointing the finger...and I have not been seeking Ian Kerr's resignation. But I think it gives a clear warning to all banks and credit card lenders that they must be frank with customers.
I don't feel Egg realised the enormity of the communications disaster they were presiding over by withdrawing cards from 160,000 customers. Egg is a sad lesson to others that they cannot withdraw credit cards from responsible customers without those customers screaming blue murder."
The Financial Services Authority has passed the matter on to the Office of Fair Trading.
Egg deny that Kerr's resignation is linked to the fiasco.
Egg, in an act of sheer folly, last month sent out a letter to 161,000 card users telling them that their agreements would be terminated in 35 days because they had a "higher than acceptable risk profile".
The reality being widely touted in the media and by experts was that Egg was dumping customers who paid off their debts on time, these were deemed to be unprofitable.
Labour MP Nigel Griffiths is quoted in The Times:
"I don't believe in pointing the finger...and I have not been seeking Ian Kerr's resignation. But I think it gives a clear warning to all banks and credit card lenders that they must be frank with customers.
I don't feel Egg realised the enormity of the communications disaster they were presiding over by withdrawing cards from 160,000 customers. Egg is a sad lesson to others that they cannot withdraw credit cards from responsible customers without those customers screaming blue murder."
The Financial Services Authority has passed the matter on to the Office of Fair Trading.
Egg deny that Kerr's resignation is linked to the fiasco.
Monday, February 11, 2008
Egg To Be Grilled
Egg and its owner Citigroup Inc are facing a possible investigation over allegations that Egg cancelled credit cards because holders consistently paid up in time.
Last month, Egg said that it was going cancel the cards of around 7% of its customers. Egg claimed that the 161,000 cardholders affected had a "higher than acceptable risk profile".
However, many of those on the hit list made vocal complaints to their MPs and the media pointing out that they had good credit records, and that they were paying off the Egg cards on time.
Following this furore, the Financial Services Authority (FSA) has been forced to get off its backside and has referred Nigel Griffiths' (an MP) complaint about the issue to the Office of Fair Trading (OFT).
Mr Griffiths said that he was "very pleased" about the FSA's action. Doubtless Egg are not so pleased.
Last month, Egg said that it was going cancel the cards of around 7% of its customers. Egg claimed that the 161,000 cardholders affected had a "higher than acceptable risk profile".
However, many of those on the hit list made vocal complaints to their MPs and the media pointing out that they had good credit records, and that they were paying off the Egg cards on time.
Following this furore, the Financial Services Authority (FSA) has been forced to get off its backside and has referred Nigel Griffiths' (an MP) complaint about the issue to the Office of Fair Trading (OFT).
Mr Griffiths said that he was "very pleased" about the FSA's action. Doubtless Egg are not so pleased.
