Lenders can turn new arrears rules to their advantage
The regulator’s latest changes to the way lenders should treat customers in arrears – particularly the requirement for lenders to consider all options before starting action to repossess a property – are to be welcomed.
In my experience, mortgage arrears need to be dealt with in the context of the overall financial situation of borrowers.
In trials in which we are working with a small number of lenders to talk to clients in arrears, we have found that by engaging with borrowers about their whole debt situation we’re nearly always better able to effect a solution that stabilises and makes their repayments on unsecured debt more manageable.
This leaves a greater proportion of income available to put towards improving the arrears situation.
So without having to run the risk of giving advice, lenders adopting a more holistic approach to arrears can turn the FSA‘s rules to their advantage and put more borrowers back on the straight and narrow.
They can also fulfil their obligations with regard to Treating Customers Fairly.
So lenders should see the new rules, rather than being a burden, as a chance to tackle underlying unsecured debt liabilities at source and free up disposable income for the repayment of arrears.
John Fairhurst
Managing Director
Payplan Press Office
For further information please contact:
Jane Jenkins,
Payplan PR Manager
Email: jane.jenkins@payplan.com
Telephone: 01476 581 279
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Loan Shark Debt Campaign Update
Loan shark debt dangers highlighted in ongoing campaign
The Office of Fair Trading (OFT) has joined the ‘Stop Loan Sharks‘ campaign aimed at warning people about the risks of using loan sharks to try to solve their debt problems.
Loan sharks are actually illegal money lenders and prey on those vulnerable people struggling with debt. Unlicensed loan sharks will often offer cash loans without paperwork, charge extortionate interest rates and may use benefit payments or bank cards as security or threaten the use of violence if loan payments are missed.
According to the (OFT) there are an estimated 165,000 households in the UK that have loan shark debts, with half of these in the most deprived areas of the country.
In accordance with the campaign now fronted by the OFT and Trading Standards Illegal Money Lending Teams, loan sharks can now be reported by either calling 0300 555 2222, by sending a text with the words ‘loan shark’ and the details to 60003 or by sending an email to reportaloanshark@stoploansharks.gov.uk.
Jacqui Kennedy, Director of Regulatory Services at Birmingham City Council said:
‘It’s great to have the support of this campaign in our continued fight against loan sharks. It’s vital that we get our message out to vulnerable people that loan sharks are never a good option. It may seem like easy cash at first but very quickly people can become trapped in a spiral of debt’.
Nationally, the ‘Stop Loan Sharks‘ project has so far helped more than 11,500 people, written off more than £31 million of illegal debt, secured more than 60 years in prison sentences including an indefinite sentence for public protection, and seized £1million in cash.
For more information about how to report a loan shark watch the ‘Stop Loan Sharks’ campaign film on YouTube.
IMPORTANT NOTICE
If you’re receiving violent threats made by loan sharks because of missed payments, you should contact the Police immediately. If you’re struggling to manage your debts, contact Payplan today for free, confidential debt advice.
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Inflation Increase in April 2010
As Payplan previously reported on the predictions made about inflation, the latest updates are as follows:
The Consumer Price Index (CPI) annual inflation was up from 3.4% in March to 3.7% in April, well above a Government target of 2% and the highest rate since November 2008.
The largest upward pressures to the change in the CPI annual rate between March and April, according to the Office for National Statistics (ONS), came from:
- clothing and footwear – prices rose by 2.2% between March and April this year but rose by only 0.2% in 2009
- food and non-alcoholic beverages, rose by 2.6%, according to the ONS
- higher duty on alcohol and cigarettes introduced in April’s Budget also added to inflation for that month, as prices rose by 2.1% between March and April this year but were unchanged a year ago.
In the year to April, the Retail Prices Index (RPI) annual inflation was 5.3%, up from 4.4% in March, the highest since July 1991. The main factors affecting the CPI also affected the RPI.
However, Governor of the Bank of England Mervyn King said in a statement earlier this month, that he expected the current rise in inflation to slow below the 2% target by the end of the year, noting the increase in VAT back up to 17.5% earlier this year and the rise in fuel costs as the main reason for the rapid increase.
Payplan
If you are struggling to manage your monthly bills, contact Payplan today for free, confidential debt advice or simply call 0800 280 2816.
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Volcanic Eruption – Your rights and refunds
Are you entitled to a refund?
As we previously wrote in Money Worries For Stranded Passengers, the unexpected expense and disruption caused by the recent Volcanic eruption has undoubtedly affected people’s finances in many cases. Here is a guide to your rights, refunds, compensation and employment matters relating to these events.
Refund Policies
If your trip was delayed or cancelled, you should either have been offered alternative transport or an alternative holiday. If that is unsuitable you should be entitled to a full refund of all elements of your package deal.
If you arranged a holiday with separate flights and accommodation, refund policies may differ. Customers are still able to claim money back for their flights, as the airline, under the Denied Boarding Regulations, must offer the choice of a refund or re-routing at the earliest opportunity.
However, accommodation costs are not included in the refund – that is the responsibility of the accommodation supplier, should they agree.
Any flights that were delayed by five hours or more should still qualify for a refund if you chose not to travel on the delayed flight. If you took a connecting flight and had already made part of your journey you should be entitled to your money back for any unused flights and get a free flight back to your departure point.
If you booked your outward and inward tickets separately and both were cancelled you are eligible for a refund. However, if your return flight goes ahead but you missed it due to the outbound cancellation, you should get a refund for the cancelled flight but may not for the return flight, particularly if the tickets were bought through separate airlines.
The Association of British Travel Agent’s (ABTA) recently released a letter from the ABTA Chief Executive to customers whose travel plans were disrupted.
The European Commission Vice President for Transport said:
“This is a situation which is causing immense difficulties for passengers travelling throughout Europe. It can be considered a very exceptional circumstance. Nevertheless, it is important to remind passengers and airlines that EU passenger rights do apply in this situation:
- the right to receive information from airlines (e.g. on your rights, on the situation as it evolves, cancellations and length of delays)
- the right to care (refreshments, meals, accommodation as appropriate)
- the right to chose between reimbursements of fare or be re-routed to final destination.
In an exceptional circumstance such as this, passengers are not however entitled to additional financial compensation that would be the case where delays or cancellations are the fault of the airline.”
What about Work?
As Martin Lewis’ money saving tips suggest, If stranded, even though it’s not your fault, employers are often within their rights to dock your pay for unauthorised leave, according to the Trades Union Congress (TUC).
However, it is good advice to keep your employer informed of your circumstances and take any opportunity to work remotely, if of course this is possible due to the nature of your work.
For more information about your rights and refunds contact your travel operator or airline directly or visit The Association of British Travel Agents.
Payplan
If you are struggling to meet your monthly expenses, contact Payplan today for free, confidential debt advice.
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