Bank charges won't be included in high cost credit report

A report is being put together detailing types of high cost credit but according to recent reports bank charges will not be included in this report.

The report forms part of the Office of Fair Trading enquiry into costly credit, and will include things such as pay day loans, doorstep lenders, and pawnbroking, all of which have been subjected to increased scrutiny, but the topic of bank charges has only be skimmed over as part of the report.

The report from the OFT enquiry is set to be published next month, according to reports, but some of the lenders that have been included in the report have described it as a ‘witch hunt’.

Providers of pay day loans have expressed disappointment with the OFT’s decision not to cover bank charges and instead focus on pay day loans and other types of credit.

The report, when released, it expected to highlight the astonishing levels of interest that can come with some types of borrowing, with some non-mainstream lenders charging up to 500 percent interest on a one year loan and some pay day lenders’ interest rates working out to between 1000 and 2000 percent.

At the time the OFT started into probe into high cost borrowing it had been expecting to win its High Court case against the banking industry with regards to bank charges.

One industry group, the BCCA, said that bank charges should have been included in the report, and the group said: ‘We are disappointed that the OFT will not be carrying out a thorough examination of the true cost of current account overdrafts.’

‘This is particularly significant, because the banks are exempted from having to quote APRs on overdrafts, whereas other short-term lenders are compelled to do so.’

Tags: Loan, Office of Fair Trading, high cost credit, year, bank charges, overdrafts

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R3 report shows Scots have greater debt problems than rest of UK

A new report produced by the insolvency trade body R3 has suggested that people living in Scotland are facing greater debt problems than anywhere else in Britain.

The report, R3’s quarterly debt snapshot, showed that 13 per cent of Scottish people had taken on extra debt in the last few months, in the form of loans, increased overdrafts and credit card debts. In the rest of Britain, this figure was just 12 per cent.

The research also found that 43 per cent of Scots struggle to make it to payday. Whilst this was 3 per cent less than the figure recorded for the rest of Britain, it was found that 200,000 Scottish people had taken out payday loans (small, short-term loans designed to cover the borrower’s bills and
expenses until the next payday) to cover their budgetary shortfall in the last year.

R3 revealed that one in five Scottish people who had taken out these payday loans struggled to pay back what they owe, which is considerably more than the one in ten Brits who admitted the same.
John Hall, who is an R3 Scottish council member, said:

“It is extremely worrying that such a large percentage of people are struggling to make it to payday and that many are using payday loans to bridge the gap.
“These loans tend to have high interest rates and often those who use this type of credit find themselves in a vicious debt cycle, especially if they then experience a sudden job loss.”

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Posted in: greater,problems,report,Scots,shows

Your Credit Report…

Your credit report can help decide whether you are given credit or not and holds all the information a creditor needs to make that decision.

Today I am going to discuss the ins and outs of your credit report so you know all that you need to.

Your credit report compiles information from two different sources; public records and information from the credit industry.

Public Records- the type of information these hold are electoral roll details, details of any court judgments that have been issued against you, as well as details of whether you are in or have entered into an IVA or bankruptcy in the last six years.

Creditor Information- this is made up of credit accounts that you hold, credit applications that you make and financial associations.

Your credit report could be the decision maker for a creditor as to whether or not they will give you the credit. As well as deciding whether you get credit or not, it can also determine the interest rate or level/amount of credit offered. You have the right to view your report and have anything that is incorrect removed.

This is the score based on your credit history and also helps a creditor with their decision making process. Not only can it affect your ability to gain credit but it can also have an effect on your ability to open a new bank account, gaining new employment in certain sectors and even has an effect on rental or mortgage applications. The information on your credit report, and the information you provide on an application form to a creditor, may be used by that creditor to give you a credit score. The creditor will use this credit score to identify the risk of offering you credit. The previous occupants of your address cannot affect your credit score. Also, credit scores do not take account of your sex, religion, race, political beliefs, sexuality or criminal record.

There are three big agencies who can provide your full credit report;

If you are still unsure about anything call one of our specialists who will always be happy to help

Don’t forget you can also follow me on Facebook and Twitter.

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Auditor's Client Assets Report

25 March 2011

This Policy Statement reports on the main issues arising from Consultation Paper 10/20 Improving the auditor’s report on client assets and publishes final rules.

Newsletter [ PDF ]

Press release

CP10/20: (Sept 2010)
Improving the auditor’s report on client assets

FSA Handbook

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Posted in: Assets,Auditors,Client,report

OFT bans debt management firms as BBA releases damning report

35 debt management firms have been forced to surrender their consumer credit licenses following a compliance review by the Office of Fair Trading (OFT).

Another 15 are facing licensing action: eight have been informed that the OFT intends to revoke their license, while another seven are still under investigation having failed to respond. All 15 firms will have a right to make representations to an adjudicator before a final decision is made. A further 79 firms have submitted audit reports following a request from the OFT for evidence of compliance measures by 16th December 2010. The OFT warned 129 firms in September 2010 after its review of the sector found widespread problems with compliance. The OFT has also updated its debt management guidance due to unfair business practices identified in the review.Ray Watson - Director of the OFT’s Consumer Credit Group - said:'We are determined to improve standards in this sector, as the failings identified by our review are unacceptable. Companies providing debt management services should be in no doubt that we will act against bad practice and ensure consumers are protected.'News of these steps taken by the OFT coincides with a joint report released by the British Bankers’ Association (BBA) and Accenture proposing a new streamlined system for assisting people who find themselves in financial difficulties. Personal debt in the UK has reached nearly £1.5 trillion, and during the second quarter of 2010 banks wrote off £3.5 billion of consumer borrowing, up from £2 billion during the first three months of the year. Personal insolvency rates have also risen to record levels.The report – titled ‘A New Model for Dealing with Personal Debt’ - calls for greater consistency in the way debt advice is given and how creditors deal with customers with financial problems. It recommends several key changes, including: ·         The creation of a single body to regulate debt advice, with a single debt management license·         Better use of customer information to identify people at risk of falling into debt to facilitate early intervention and resolution·         Improving financial education and providing a single online debt advice portal. Paul Ross - BBA policy director and co-author of the report - said: “Our vision is to provide a clear and coherent process to help people facing debt difficulties, to intervene early where possible and to provide a simple debt resolution solution if those early attempts do not succeed. We want to unravel the red tape to bring about a more financially responsible solution for customers. “Customers are currently faced with too many confusing options for resolving their debt, and may set out too early on expensive legal procedures when a more common sense approach would be better for everyone.”David Parker - senior executive in Accenture’s Financial Services operating group and co-author of the report – said: “As the Government considers changes to consumer credit regulation, now is the right time to get real change under way and ensure that there are effective safety nets for consumers in financial distress. “The changes we are proposing will have a fundamental impact on the way debt is managed through the rehabilitation of debtors and the prevention of new or repeated debt behaviour. However, agreement to implement a new debt management framework must be reached by all relevant stakeholders, including the government, regulatory and advice bodies, as well as lenders and borrowers.”
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: damning,firms,Management,releases,report

OFT bans debt management firms as BBA releases damning report

Tuesday 1st February 2011

35 debt management firms have been forced to surrender their consumer credit licenses following a compliance review by the Office of Fair Trading (OFT).

Another 15 are facing licensing action: eight have been informed that the OFT intends to revoke their license, while another seven are still under investigation having failed to respond. All 15 firms will have a right to make representations to an adjudicator before a final decision is made. A further 79 firms have submitted audit reports following a request from the OFT for evidence of compliance measures by 16th December 2010. The OFT warned 129 firms in September 2010 after its review of the sector found widespread problems with compliance. The OFT has also updated its debt management guidance due to unfair business practices identified in the review.Ray Watson - Director of the OFT’s Consumer Credit Group - said:'We are determined to improve standards in this sector, as the failings identified by our review are unacceptable. Companies providing debt management services should be in no doubt that we will act against bad practice and ensure consumers are protected.'News of these steps taken by the OFT coincides with a joint report released by the British Bankers’ Association (BBA) and Accenture proposing a new streamlined system for assisting people who find themselves in financial difficulties. Personal debt in the UK has reached nearly £1.5 trillion, and during the second quarter of 2010 banks wrote off £3.5 billion of consumer borrowing, up from £2 billion during the first three months of the year. Personal insolvency rates have also risen to record levels.The report – titled ‘A New Model for Dealing with Personal Debt’ - calls for greater consistency in the way debt advice is given and how creditors deal with customers with financial problems. It recommends several key changes, including: ·         The creation of a single body to regulate debt advice, with a single debt management license·         Better use of customer information to identify people at risk of falling into debt to facilitate early intervention and resolution·         Improving financial education and providing a single online debt advice portal. Paul Ross - BBA policy director and co-author of the report - said: “Our vision is to provide a clear and coherent process to help people facing debt difficulties, to intervene early where possible and to provide a simple debt resolution solution if those early attempts do not succeed. We want to unravel the red tape to bring about a more financially responsible solution for customers. “Customers are currently faced with too many confusing options for resolving their debt, and may set out too early on expensive legal procedures when a more common sense approach would be better for everyone.”David Parker - senior executive in Accenture’s Financial Services operating group and co-author of the report – said: “As the Government considers changes to consumer credit regulation, now is the right time to get real change under way and ensure that there are effective safety nets for consumers in financial distress. “The changes we are proposing will have a fundamental impact on the way debt is managed through the rehabilitation of debtors and the prevention of new or repeated debt behaviour. However, agreement to implement a new debt management framework must be reached by all relevant stakeholders, including the government, regulatory and advice bodies, as well as lenders and borrowers.”
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

Send To Friend      Print      RSS Feed      News Archive
If you have any queries about this news story or our news section, please contact us

View the original article here

Read more »

Posted in: damning,firms,Management,releases,report