Thousands hit by hidden charges

Wednesday 2nd March 2011

With inflation levels making everyday living more expensive, we should be paying more attention to the small print on our bills, not less.

Yet all too often, a lack of attention towards our direct debit payments and other bills, means that we miss hidden charges and end up in spiralling into financial difficulty. Although direct debit payments simplify the task of paying regular bills, they also mean hefty penalty charges if we happen to have insufficient funds in our account. Utility bills are a particularly troublesome source of direct debit dilemmas; if payments are missed or late, the consumer is at risk of getting billed the next month with ‘late payment charges’, inclusive of interest fees. Furthermore, if these payment issues become too regular, we are at risk of being cut off by the supplier and then facing a reconnection fee in order to restore the service. Beverley Budsworth, Managing Director of The Business Debt Advisor, said: “Arrears of utilities and council tax are a common theme we encounter with individuals in debt. There are savings to be made by paying by direct debit, however, this also means the utility suppliers are at liberty to vary your payments and this could mean that there any insufficient monies to cover the payments resulting in direct debit penalties which can be significant. “In these types of cases it is important to retain control, temporarily cancel the direct debit and pay the utility bills plus extra towards arrears by BACs (Banks Automated Clearing System) or debit card until order can be restored to the individual’s finances."Back in June 2010, a report was carried out which estimated that, on average, households were being charged £84 annually in hidden taxes on energy bills, due to mounting pressures to offset carbon emissions and combat climate change. These unpaid bills mount up, meaning that we incur additional fees as well as the initial direct debit payment. And in addition to depleting our household budget, these unpaid charges can find their way onto our credit files, giving us an adverse credit rating. Una Farrell, a spokesperson for the Consumer Credit Counselling Service, told The Observer: “People need to get to the bottom of their debts and regularly assess their financial products because not paying off these smaller amounts, as well as the larger ones, can affect their credit rating.”According to comparison site Uswitch.com an estimated 5.5m households are in energy debt, with the average debt being £132. A significant proportion of this debt is hidden when we move house.When we change our address, we are often more concerned with buying a new two piece suite than chasing up our finances. Consequently, direct debit payments that relate to our previous address continue unless the supplier is notified and the payment is cancelled or updated. Andrew Hagger, a spokesman for the comparison website Moneynet.co.uk told the Telegraph:“The unauthorized charges debited to your account could cost you up to £6 a day. The bank will write to the address it has on file, but as you’ve moved you wouldn’t know you were overdrawn.”And it seems that cancelling a credit card is not enough to escape mounting payments, as doing this simply leads the credit card company to issue additional administration fees. Beverley Budsworth, Managing Director of The Business Debt Advisor, added:“Budgeting is absolutely crucial to making sure that all priority debts including mortgage/rent, council tax and utilities plus any arrears are paid prior to unsecured debt i.e. credit cards and loans. It is much easier to negotiate payment plans with personal debt than it is with priority creditors.”
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: charges,hidden,thousands

Thousands hit by hidden charges

Tuesday 1st March 2011

With inflation levels making everyday living more expensive, we should be paying more attention to the small print on our bills, not less.

Yet all too often, a lack of attention towards our direct debit payments and other bills, means that we miss hidden charges and end up in spiralling into financial difficulty. Although direct debit payments simplify the task of paying regular bills, they also mean hefty penalty charges if we happen to have insufficient funds in our account. Utility bills are a particularly troublesome source of direct debit dilemmas; if payments are missed or late, the consumer is at risk of getting billed the next month with ‘late payment charges’, inclusive of interest fees. Furthermore, if these payment issues become too regular, we are at risk of being cut off by the supplier and then facing a reconnection fee in order to restore the service. Beverley Budsworth, Managing Director of The Business Debt Advisor, said: “Arrears of utilities and council tax are a common theme we encounter with individuals in debt. There are savings to be made by paying by direct debit, however, this also means the utility suppliers are at liberty to vary your payments and this could mean that there any insufficient monies to cover the payments resulting in direct debit penalties which can be significant. “In these types of cases it is important to retain control, temporarily cancel the direct debit and pay the utility bills plus extra towards arrears by BACs (Banks Automated Clearing System) or debit card until order can be restored to the individual’s finances."Back in June 2010, a report was carried out which estimated that, on average, households were being charged £84 annually in hidden taxes on energy bills, due to mounting pressures to offset carbon emissions and combat climate change. These unpaid bills mount up, meaning that we incur additional fees as well as the initial direct debit payment. And in addition to depleting our household budget, these unpaid charges can find their way onto our credit files, giving us an adverse credit rating. Una Farrell, a spokesperson for the Consumer Credit Counselling Service, told The Observer: “People need to get to the bottom of their debts and regularly assess their financial products because not paying off these smaller amounts, as well as the larger ones, can affect their credit rating.”According to comparison site Uswitch.com an estimated 5.5m households are in energy debt, with the average debt being £132. A significant proportion of this debt is hidden when we move house.When we change our address, we are often more concerned with buying a new two piece suite than chasing up our finances. Consequently, direct debit payments that relate to our previous address continue unless the supplier is notified and the payment is cancelled or updated. Andrew Hagger, a spokesman for the comparison website Moneynet.co.uk told the Telegraph:“The unauthorized charges debited to your account could cost you up to £6 a day. The bank will write to the address it has on file, but as you’ve moved you wouldn’t know you were overdrawn.”And it seems that cancelling a credit card is not enough to escape mounting payments, as doing this simply leads the credit card company to issue additional administration fees. Beverley Budsworth, Managing Director of The Business Debt Advisor, added:“Budgeting is absolutely crucial to making sure that all priority debts including mortgage/rent, council tax and utilities plus any arrears are paid prior to unsecured debt i.e. credit cards and loans. It is much easier to negotiate payment plans with personal debt than it is with priority creditors.”
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: charges,hidden,thousands

Welfare cuts will cost working families thousands

Friday, February 11, 2011, 12:02

Welfare cuts to be made over the coming years will leave low-paid families thousands of pounds worse-off despite the coalition government’s claim that there will be “no losers” from its austerity measures.

Research carried out by the TUC has found that a family with two children, with both parents in minimum wage jobs, could lose more than £2,700 a year by April 2013 as a direct result of changes to the tax credits and benefits systems.

The loss to the lowest income groups could be much higher once housing benefit is capped, elements of working tax credit and child benefit are frozen and the child trust fund is abolished. Middle-income earners will suffer from the ending of child benefit for higher rate taxpayers.

The Treasury’s plan to switch the inflationary measure of benefit increases from RPI to CPI will also hit the poor and save the government an estimated £5.8 billion by April 2015.

Brendan Barber, general secretary of the TUC, said: “The government’s ‘no losers’ welfare pledge will ring hollow if families suffer thousands of pounds worth of cuts in the years running up to the switch to universal credit. Workers are already suffering an income squeeze and government austerity will make low and middle-income families even worse off. Welfare cuts of over £2,700 a year on top of service cuts like the end of free antenatal classes and the closure of Sure Start centres are the worst possible conditions in which to introduce universal credit.

“The TUC wants to see the removal of barriers that penalise workers for earning more money while they’re trying to get off benefits, but rushed reforms which are based on swinging welfare cuts risk creating a whole new set of obstacles to work, leaving many families worse or little better off than they are now. The government cannot allow short-term cost cutting to undermine long-term welfare reform.”

Work and Pensions Secretary Ian Duncan-Smith promised last November that no deserving claimants would lose out from the switch to universal credit in April 2013. When launching his proposals he said: “We will protect those people who for whatever reason may find themselves with less.”

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Posted in: families,thousands,Welfare,working