Fourth successive monthly fall in consumer confidence

Friday 21st October 2011 Consumer confidence in the UK has reached a point close to its all-time-low as a fourth successive monthly fall has been recorded by the Nationwide Consumer Confidence Index.Households are struggling to cope with weak economic growth, rising unemployment, and further fears about a double-dip recession; factors which have combined to place consumer confidence a mere four points above its record low back in February.The survey revealed 80 per cent of households are concerned there will be no improvement over the next six months.Robert Gardner, Nationwide’s chief economist told This is Money: “The economy has hardly grown in 2011 and pressure has continued to mount on household budgets.”Mr Gardner suggested ‘recent signs of concerted action’ by politicians and policymakers may bolster sentiment in the months ahead. He added, “This could translate into increased consumer confidence if people believe these efforts will be successful in lifting the economy out of its current malaise.”Sir Mervyn King, Bank of England Governor, told households earlier this week that they could anticipate that the high cost of living should have been alleviated somewhat next year.
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Posted in: confidence,Consumer,Fourth,monthly,successive

Consumer confidence dropped in June amid debt concerns

Consumer confidence dropped in June, according to the latest surveys, as people worried about the effects of rising inflation, low wage increases on their finances, and existing debt management problems.

According to this month’s GfK NOP consumer confidence survey, the index for consumer confidence fell by around four points to -25. This reading is believed to be the lowest it has been since January 2011, and it is much lower than the average level of -8. Even in May 2011, consumer confidence was at -21.

The survey also revealed that less consumers think that now is a good time to start saving, as well as for making major purchases. This was supported by the savings index, which is five points lower compared to the same time last year, and by recent data released by the Office for National Statistics. The ONS revealed that savings levels have dropped this year, with families having no spare cash to put aside after paying bills, meeting monthly expenses and tackling debt problems.

Howard Archer, UK & European Chief  Economist for IHS Global Insight, commented on the recent findings, saying:

“All components of the consumer confidence index saw deterioration in June, with consumers more pessimistic about the outlook for the economy for the next 12 months and its performance over the past year.

“The renewed drop in consumer confidence in June reinforces belief that consumers will be very cautious in their spending over the coming months as their purchasing power remains under severe pressure from high inflation, low wage growth and tighter fiscal policy.”

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Posted in: concerns,confidence,Consumer,dropped

FSA confirms new consumer complaint handling rules

Wednesday 1st June 2011

The FSA has introduced new complaints handling rules as part of a package of measures to drive up standards within the industry.

The new rules include the abolition of the ‘two-stage’ complaints handling rule to make sure firms resolve complaints fairly and do not dismiss them the first time, requiring persistence from the customer to pursue the complaint;The consultation statement also confirms an increase to the limit on awards made by the Financial Ombudsman Service from £100,000 to £150,000.Sheila Nicoll, the FSA’s director of conduct policy, said: ''We would rather customers were not put in a position where they had to complain, but when they do we want them to be treated fairly by their firm, with their complaint resolved promptly and being provided with redress when needed.The new ruling also requires firms to identify a senior individual responsible for complaints handling and additional guidance to help firms understand the processes they might need in place to meet the new requirements.Ms Nicholl added: ''Good complaints handling contributes to customer loyalty and should provide the opportunity for firms to put right problems in product design or sales before issues become widespread. But we have found major failures with the way firms handle customer complaints and have since taken enforcement action against two firms as a result of poor complaints practices.''The news comes after the FSA announced a fine for Bank of Scotland of £3.5 million for failures related to complaints handling of its retail investment products - many from older customers with little or no experience of investment products.This is the second firm fined following the FSA’s review of complaint handling practises by five major banking groups. Royal Bank of Scotland and Natwest were fined £2.8 million in April 2010 for multiple failings in the way they handled customers’ complaints.
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Posted in: complaint,confirms,Consumer,handling,rules

Consumer complaints (emerging risks and mass claims): Feedback on DP10/1

E-mail:

DP10/1 to contact the authors

28 March 2011

This Feedback Statement reports on the main issues arising from Discussion Paper 10/1, Consumer complaints (emerging risks and mass claims).

Newsletter [PDF]

DP10/1: (March 2010)

Consumer complaints (emerging risks and mass claims)

FSA/OFT/FOS Coordination Committee

Memorandum of Understanding between the Claims Management Regulator and the Financial Services Authority [PDF]

FSA Handbook

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Posted in: Claims,complaints,Consumer,DP101,emerging,Feedback,risks

Debt resolution company under threat of losing consumer credit licence

Thursday 24th March 2011 A debt resolution company could face closure after coming under fire from the OFT.First Step Finance Limited (FSF) is under threat of losing its credit license having been issued with a ‘Minded to Revoke’ notice by the OFT.A member of the Debt Resolution Forum (DRF), the notice was issued to the Stockport-based company on December 6 last year.The OFT took action in a separate review against a number of companies licensed to provide debt counselling and debt adjustment services in September 2010.This did not include FSF and primarily involved small businesses, mainly sole traders, and it is understood that 40 of these businesses have so far surrendered their licences. It is also understood that just under 40 companies may face serious action, including licence revocation or having conditions imposed on their business operations.   There are several trade associations that represent both debt solution providers and debt solution intermediaries, notably DEMSA, the DRF and the newly formed Association of Professional Debt Solution Intermediaries (APDSI). Alasdair Warwood, Secretary General of APDSI said; “We understand that the new OFT debt management guidance is substantially expanded and will be issued in April for consultation.“This will include more focus on misleading advertising, improving the quality of debt advice and the role of debt solution intermediaries and lead generators.“The role of APDSI is to help compliant debt solution intermediaries understand the prevailing best practices and regulatory environment in which they operate.“This includes ensuring that they are properly licensed and understand the rules of marketing to potentially vulnerable consumers. APDSI will be contributing to the consultation process on behalf of its members who want to genuinely assist indebted consumers who are facing increasing hardship in the current economy.” Vance Parsons, Director of EuroDebt Financial Services, suggests that the actions by the OFT to generally improve working practices and free the debt solution industry of rogue, non-compliant companies are welcomed.Unfortunately, in the past those companies who did not comply with the OFT’s Debt Management Guidance Notes tended to give the industry as a whole ‘bad press’. According to Mr Parsons, any action to have these companies closed down or seriously improve standards is good news.
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Debt resolution company under threat of losing consumer credit licence

A debt resolution company could face closure after coming under fire from the OFT.

First Step Finance Limited is under threat of losing its credit licence having been issued with a ‘Minded to Revoke’ notice by the OFT.

A member of the Debt Resolution Forum (DRF), the Stockport-based company was issued the notice on December 6 last year following an OFT compliance review of the debt management sector.

The OFT took action against a number of companies licensed to provide debt counselling and debt adjustment services in September 2010.

These were primarily small businesses, mainly sole traders, and it is understood that 40 of these businesses have so far surrendered their licences.

It is also understood that just under 40 companies may face serious action, including licence revocation or having conditions imposed on their business operations.  

There are several trade associations that represent both debt solution providers and debt solution intermediaries, notably DEMSA, the DRF and the newly formed Association of Professional Debt Solution Intermediaries (APDSI).

Alasdair Warwood, Secretary General of APDSI said; “We understand that the new OFT debt management guidance is substantially expanded and will be issued in April for consultation.

“This will include more focus on misleading advertising, improving the quality of debt advice and the role of debt solution intermediaries and lead generators.

“The role of APDSI is to help compliant debt solution intermediaries understand the prevailing best practices and regulatory environment in which they operate.

“This includes ensuring that they are properly licensed and understand the rules of marketing to potentially vulnerable consumers. APDSI will be contributing to the consultation process on behalf of its members who want to genuinely assist indebted consumers who are facing increasing hardship in the current economy.”

Vance Parsons, Director of EuroDebt Financial Services, suggests that the actions by the OFT to generally improve working practices and free the debt solution industry of rogue, non-compliant companies are welcomed.

Unfortunately, in the past those companies who did not comply with the OFT’s Debt Management Guidance Notes tended to give the industry as a whole ‘bad press’.

According to Mr Parsons, any action to have these companies closed down or seriously improve standards is good news.

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Posted in: Company,Consumer,Credit,licence,losing,resolution,threat,under

Consumer credit licence fees set to increase

Wednesday 2nd March 2011

The OFT announced this week that it will be increasing the cost of its overall fees for all applications, so as to ensure that a greater level of scrutiny is given to each case.

It is the OFT’s responsibility to assess all licence applications and decide whether the applicant is competent for the applied role, which could be debt counselling or other positions which are deemed ‘high-risk’ to the consumer, including sub-prime lending.

This increased ‘scrutiny’ means that the applicant could be subject to site visits, staff interviews and compliance reviews.

Ray Watson, OFT Director of Consumer Credit, said:”We strive at all times to minimise costs for regulated businesses but we must fulfil our statutory duty to protect consumers in their dealings with credit businesses. This increase will allow us to do so.”

In real terms, this increase will result in a sole trader paying £435 for a five year credit licence application, up £21 per year from previously. For all other applications from non sole traders, the price is £1,075, up a sharp £51 per year.

 Yet despite the affect that the fee increase will have on the debt management sector, many industry professionals are applauding the OFT’s action and hoping that it will act as a barrier to entry from applicants who are unfit for the position and who reflect badly upon the reputation of the private debt management industry. 

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Posted in: Consumer,Credit,increase,licence

Consumer credit licence fees set to increase

The OFT announced this week that it will be increasing the cost of its overall fees for all applications, so as to ensure that a greater level of scrutiny is given to each case.

It is the OFT’s responsibility to assess all licence applications and decide whether the applicant is competent for the applied role, which could be debt counselling or other positions which are deemed ‘high-risk’ to the consumer, including sub-prime lending.

This increased ‘scrutiny’ means that the applicant could be subject to site visits, staff interviews and compliance reviews.

Ray Watson, OFT Director of Consumer Credit, said:”We strive at all times to minimise costs for regulated businesses but we must fulfil our statutory duty to protect consumers in their dealings with credit businesses. This increase will allow us to do so.”

In real terms, this increase will result in a sole trader paying £435 for a five year credit licence application, up £21 per year from previously. For all other applications from non sole traders, the price is £1,075, up a sharp £51 per year.

 Yet despite the affect that the fee increase will have on the debt management sector, many industry professionals are applauding the OFT’s action and hoping that it will act as a barrier to entry from applicants who are unfit for the position and who reflect badly upon the reputation of the private debt management industry. 

Manchester debt firm is liquidated owing creditors over £2.2m
Wednesday 11th August 2010

Bankrupt football legend probed by police over loan fraud
Monday 2nd August 2010

Mortgage broker ordered to repay £1.5m of client money used to pay off debts
Wednesday 14th July 2010

Barclays lifts lid on banking write-offs
Wednesday 20th February 2008

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Posted in: Consumer,Credit,increase,licence