December 2010

Mortgage Lending Continues To Plummet

The British Bankers Association (BBA) has revealed only 29,991 home loans were approved during November, a 20 month market low. The housing market shows little signs of recovery with mortgage approvals remaining low due to strict lending criteria.

The BBA’s figures also revealed overdraft and credit card repayments matched the amount of credit and overdraft borrowing, indicating that households remain nervous about overstretching themselves whilst the economic outlook remains uncertain.

Payday Lenders Warned Against Misuse Of Direct Debits

The OFT has warned payday lenders not to misuse direct debt facilities by altering the amount or date of loan repayments.  The regulatory body took action after it found Paydayok (Safeloans Limited) were making multiple attempts to recover missed repayments, without consent from the borrower, which the OFT said would put priority payments such as rent or mortgage at risk.

As a result of the OFT’s investigation, Safeloans Limitedmust in future:

OFT Clamp Down On Doorstep Lending

The Office Of Fair Trading has revealed it refused 100 licence applicationsfor ‘home collected credit’ over the last 18 months and has contacted existing lenders about improving their business practices and standards.  As family finances comeunder increasing pressure during the run-up to the festive period, it can be difficult to resist the temptation to obtain additional credit from doorstep lenders. 

OFT Warns Consumers Against Credit Loophole Claims

The Office of Fair Trading has warned UK consumers not to be taken in by claims of writing off debt by some debt companies. These companies claim to use sections 77/78/79 of the Consumer Credit Act 1974 to exploit a loophole that allows in certain circumstances for all debt to be cleared.

Rise In Men Seeking Debt Advice During 2010

We are often asked who has the biggest debt problems – men or women?

It’s a hot topic, and earlier this year we reported on the Government’s insolvency statistics, which indicated a surge in the number of females facing insolvency during the course of the last decade. However, judging by the calls we’ve received during 2010 it looks like this trend could be changing.

OFT Warns Consumers About Loan Shark Debt

The Office Of Fair Trading has warned people about using loan sharks to fund their spending over the Christmas period. These illegal money lenders offer cash loans with extremely high rates of interest, which often leads to the original loan amount spiralling into an unmanageable level of debt.

Banks Accused Of Profiteering From Worst Off

New Bank of England figures have revealed authorised overdraft rates reached 19.09% in October, the highest since records began.  The rate is 38 times higher than the Bank of England base rate and 10 times higher than the average rate paid on accounts in credit.  The higher rates are the result of banks introducing a new, simplified structure to authorised and unauthorised overdraft charges.  However, the rates have been heavily criticised by some who believe the least well off members of society will be hardest hit.

Insolvency Service Closes Down Debt Company

UK Bankruptcy Limited (UKB), which received most of its referrals from the IVA council, a company claiming to be an independent body monitoring the insolvency industry,has been ordered into liquidation following an Insolvency Service(IS) investigation.  The investigation concluded that the company regularly charged excessive fees that bore no relation to the amount of work undertaken and that the advice they gave was often basic and available freely elsewhere.

MBNA Told To Improve Communication With Customers In Debt

The Office of Fair Trading (OFT) has investigated MBNA over its treatment of financially impaired customers.  Concerns about how the company had been treating those struggling to keep up with repayments had initially been raised with the OFT by the Citizens Advice Bureau. The investigation found that MBNA were not only unclear in their communications as to whether an offer of reduced payments had been accepted but would also routinely bypassed the client’s debt advice representatives that were acting on their behalf.

OFT Warns Debt Management Firms About Misleading Trading Names

The Office Of Fair Tradinghas this week issued a warning to commercial debt management firms not to imply or infer that they are a debt charity or Government affiliated institution.The OFT told Baker Evens, part of the Paymex Group, that it would not vary it’s Consumer Credit Lisence to include the trading names ‘Bankruptcy Helpline’ and ‘Insolvency Helpline’as they implied that the company was an ‘impartial, non-commercial or governmental organisations, rather than a commercial enterprise’.