Payday loans under new scrutiny in OFT review

Following the OFT’s confirmation that it has launched an extensive review into the payday lending sector, we decided to take a closer look at what has led to this crackdown.The review has been prompted by worries that some people in financial difficulty may be being taken advantage of by payday lenders.According to the OFT, the issues of concern it will be focusing on are:-    Giving loans without first checking adequately that the borrower can afford to repay them.-    Inappropriately targeting particular groups of people with clearly unsuitable or unaffordable credit.-    Rolling over loans so that charges escalate and the loans become unaffordable.-    Not treating borrowers that get into financial difficulties fairly.David Fisher,...

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Posted in: loans,payday,REVIEW,scrutiny,under

£200 per month on interest hits households hard

Households are being increasingly financially squeezed as it emerged that families are having to pay nearly £200 in interest each month.After paying out money each month on their regular bills, the Consumer Credit Counselling Service (CCCS) believes that the average UK household still spends 24 per cent of their discretionary income on their ‘interest burden’.The CCCS released a report stating: “Interest payments are a heavy burden on household finances.“With payment necessary regardless of economic circumstances, they pose a major threat to the solvency of many families.“As a major spending component that must be met on time, the need to service debt is posing a significant challenge in the current economic downturn when household heads lose...

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Posted in: households,interest,month

DEMSA launches debt advisor member 'gold standard'

Wednesday 22nd February 2012 The first batch of students to take a new professional qualification in debt advice as a result of a partnership between the Debt Managers Standards Association (DEMSA) and the Institute of Money Advisers (IMA) had their induction last week.The qualification, entitled ‘Certificate of Credit in Money Advice Practice’, officially starts next week and is designed to continue to raise the benchmark for the fee payable debt advice sector.DEMSA’s Richard Wharton commented on the qualification: “Our aim is to continue improving standards in the debt management industry and we see the implementation of the DEMSA/IMA training scheme as a key building block to achieving and improving the offer to the consumer. Our members...

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Posted in: Advisor,DEMSA,launches,member,standard

Secured loan packager targets DM industry

Specialist secured loan packager Carolina Capital has announced that it has expanded into the debt management sector with a new team of experienced advisors. The addition of this in-house product highlights the company’s commitment to recruiting the best staff within the relevant sectors. They will endeavour to deal with enquiries efficiently in order to maximise the revenue of intermediaries and offer great service.Scott Thorpe, Business Development Manager of Carolina Capital, commented on the expansion:  “Our primary business is secured loans, however we have diversified into other areas to improve the customer experience for introducers and clients alike. This new product is a valid option for clients – helping them to reduce their...

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Posted in: industry,Packager,secured,targets

APDSI welcomes the updated OFT Debt Management Guidance

The Association of Professional Debt Solution Intermediaries (APDSI) has welcomed the publication of the OFT's revised Debt Management Guidance (‘Debt management (and credit repair services) guidance (OFT366rev )). Its publication brings to an end a long period of uncertainty and allows both debt solution providers and APDSI members to take on board the changes required to comply with the guidance which can only be good for UK consumers. The changes to the guidance should also help by driving incompetent and non-compliant operators out of the market which, again, can only be good for consumers.APDSI particularly welcomes the clarification in the main body of the guidance (section 3.3) the distinction between mainstream lead generators and those licensed businesses that ‘refer’ and ‘introduce’...

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Posted in: APDSI,guidance,Management,updated,welcomes

Trade body speaks on digital marketing

The Debt Resolution Forum (DRF), a training, monitoring and representational body for the debt sector, has commented on the OFT’s revised debt management guidance which details the regulator’s stance on internet marketing.DRF welcomed the new guidance and applauded the OFT's decision to step back from banning the use of sponsored links and social media by debt firms, but remained concerned about the impact of the guidance on other areas of internet marketing.Commenting, David Mond, DRF chairman and CEO of ClearDebt, said: "The OFT's consultation document made it clear that the OFT thought Twitter and Facebook were "unlikely to be an appropriate means of providing consumers with sufficiently balanced and adequate information". In our response...

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Posted in: digital,marketing,speaks,Trade

Regulator publishes revised debt management guidance

The OFT has today published its revised debt management guidance detailing the standards it expects from businesses. The guidance is the latest step in the regulator’s attempt to crackdown on those firms in the sector it believes are not meeting compliance standards. Expanding on previous versions of the DMG, it provides examples of unfair practices which could render a business unfit to hold a consumer credit licence.Examples of unfair practice include:-    Sending unsolicited marketing text messages, email or voicemails.-    Providing inappropriate financial incentives to staff giving debt advice, which may encourage them to promote unsuitable debt management products for personal gain.-    Making...

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Posted in: guidance,Management,publishes,regulator,revised

Rising rental arrears affecting debt sector

An increase in rent prices during January 2012 signalled high rental arrears during the month, affecting those in the debt management sector.According to the latest BTL index from LSL Property Services – who own the UK’s largest lettings agent network – the average BTL rent in England and Wales rose by 0.1 per cent to £712 per month. Annually, this can be worked out as a £30 rise in average monthly rent as rental inflation rose yearly from 4 per cent in December to 4.3 per cent in January.Kevin Still, Director of Atlantic Financial Management, commented on the index: “Rent arrears remain a priority expenditure and my experience of clients looking at a managed debt solution is that over 15 per cent of the tenants we see have early stage rent...

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Posted in: affecting,arrears,rental,Rising,sector

How will the Money Advice Service proposals affect you?

Details about the new approach from the Money Advice Service, including their objectives for co-ordinating personal debt advice services from April 1, were recently outlined in a London meeting. We spoke to Anthony Sharp, co-founder of the Money Advice Liaison Group, who attended the meeting. He said, “I went to the meeting held by the Money Advice Service before the information about their objectives (which has now been released) was made public. At the moment, the Money Advice Service can’t say an awful lot but they did reveal that they are looking to be able to provide funding for up to 150,000 individuals with free-to client face-to-face advice, which is a 50,000 increase from last year. “Unfortunately for those interested in the future of funding for free-to- client debt advice, I don’t...

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Posted in: advice,affect,money,proposals,service

Debt portal shaken up after unprecedented growth

After four years with a weekly newsletter winging its way through cyberspace to land in your inbox and encourage you to click through to our site for all the latest debt news, here at Debt Management Today we have finally decided that – with the site generating enormous amounts of traffic from both intermediaries and consumers – a newsletter is no longer an essential part of our repertoire.Having established ourselves as a leading hub of industry news, we receive a consistent and dedicated number of visits to the site, and as such, feel Debt Management Today would now be best served by regular updates to the website so that those not subscribed to our database (including consumers) have a regular source of news.The site will continue to be...

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Posted in: after,growth,portal,shaken,unprecedented

DEMSA speaks on OFT DM guidance

Michael Land, Chairman of DEMSA, has commented on the publication of the regulator’s new, stricter guidance. He said:  “I am pleased that the OFT has today set out a stronger set of guidelines for debt management companies. As the principal trade body in the commercial debt management sector, DEMSA has been working closely with the OFT in the process of forming this new guidance. I am pleased to see that the provisions in this guidance demand of firms a more exacting standard of practice, which customers can have confidence in.”  Mr Land continued: “I am encouraged that the guidance recognises the importance of having training in place to ensure advisers are sufficiently skilled and knowledgeable to carry out their role. It is this...

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Posted in: DEMSA,guidance,speaks

How long can my creditors chase me?

A question that I often come across from people struggling to pay their debts is ?how long can my creditors chase me?? The answer is until you have paid them what you owe. However, if communication between the debtor and the creditor breaks down and enough time elapses, then the debt can be un-enforceable. Let me explain?All creditors have a fixed period of time, as stated in the Limitations Act of 1980, in which that they can pursue a debtor for a debt. The act states that unsecured debts, such as credit cards, store cards, overdraft, bank loans and catalogues, become ?statue barred? if there has been no contact between the two parties within a six year period. The creditor has not already obtained a judgment against youandYou, or anyone else owing the money (on a debt in joint names) have...

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Posted in: chase,creditors

Home Decorating on a Budget

Ally MacDermot from Ally Interiors is sharing her top tips to decorate your home on a budget.In the theme of some recent budgeting blogs, today Ally shares some of her experiences of home decorating on a budget. Please feel free to share you tips as well.If your curtains are looking a little faded where they meet in the middle, try swapping the left hand and right hand curtains over.? You will find that those outside edges hardly ever see the sun and cheaper than replacing them.Jazz up inexpensive plain curtains with a heading of stitched on odd buttons or add a strip of remnant fabric to the leading edge to create interest.? This is great for children?s rooms too.If in doubt, don?t worry about fancy colour paints. White is definitely stylish.Buying...

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Posted in: budget,Decorating

Reducing your outgoings.

In this current climate trying to reduce your outgoings is a constant uphill struggle as it seems on a weekly basis we face rising costs in gas, electricity, water, phone bills, food or fuel. However if you are savvy with your spending and really look at where your money goes you can start looking at areas that can be reduced.Here are some handy tips:Take a packed lunch to work instead of buying lunch out. This could save around ?3 a day, over the course of a week that?s ?15, over a month that?s ?60 and over the year that?s ?780!Re-evaluate your gym membership, do you need this? Do you go to the gym on a regular basis? Why not take up something that costs nothing like running? Or something that costs very little, like a workout DVD?If you...

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Posted in: outgoings,Reducing

Where can I get help with my utility bills?

Wherever you go you will hear people talking about the rising cost of something or other. With the current state of the economy it is hard to escape. Now it looks like the UK will enter into another recession this year people are beginning to panic already about how they are going to afford to live. One of the biggest concerns during the current cold spell is the cost of our fuel bills.The facts:Energy bills are rising, wholesale prices are driving prices up and the average household bill has increased by a whopping 73% since 2005. In the same time period, the average household income has only increased by 20%.Seven million people are thought to be living in fuel poverty. This is defined as when 10% or more of your total income goes towards...

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Posted in: bills,utility,Where

Mothers Day on a budget

Mother?s Day is just a few days away, a day for us to celebrate all that our mothers do for us. As with all ?holidays? like this, many see it as an unnecessary cost, but it doesn?t need to be if you look at our money saving tips!The cardIt is believed to be a tradition to send cards on days like these, but that doesn?t mean you need to buy them. By making your own card you can personalise it to your Mum?s taste therefore making it more meaningful.The flowersIt is thought that the average bouquet of flowers cost ?34 last year, but there are ways of doing this cheaper. You could visit your local market and collect several smaller bunches of flowers to create your own bouquet, you can them make sure that you get all of your Mum?s favourites in...

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Posted in: budget,Mothers

A day in the life… of a Settlements case officer

Although we are a small department within Payplan, we are growing!! As I write this currently we have 10 case officers and one problem solver. Generally we work Monday to Friday 9am-5pm and take it in turns to do two late nights and an early shift each week to give our clients more time to contact us or vice versa.I have worked in the settlements department for seventeen months now and I really enjoy it. Payplan has its own personal training academy to make sure employees have up-to-date knowledge needed for their job roles. I absolutely love learning so this suits me down to the ground.Just to give you an oversight of the settlements department each case officer has their own work load. Currently I have almost 40 clients who I contact on a weekly basis, either to give an update on progress...

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Posted in: officer,Settlements

What was your tipping point?

A ?tipping point? is the moment you realised you can no longer continue to cope and that you need some assistance.? In terms of financial tipping points each of our clients are different, but many of the reasons are the same.I therefore decided to look at some of the most popular ones we deal with on a day-to-day basis.Redundancy Since the recession of 2009 we have seen more and more people coming to us after being made redundant. I once heard someone say that the average family only has enough money to get them through three months before they are at risk of debt crisis. I don?t know how true this is but it is thought-provoking never-the-less. It is clear than many people who are made redundant quickly struggle to keep up their repayments to creditors.Relationship breakdownWhen going from...

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Posted in: point,tipping