April 2013

Banks refuse to put in place accounts that help benefit claimants

Banks are reportedly unwilling to offer current accounts which help people claiming benefits to budget their money, despite an offer of £145 million towards the cost from the Department of Work and Pensions (DWP).

The Government asked the high street banks to develop accounts in which money could be allocated into different sections, such as savings and bill payments, to make budgeting easier. But banks have responded that this would be too complicated and expensive, even with DWP investment. 

“Interest rate cap on payday loans may harm consumers” - Financial Conduct Authority

In the first of a series of papers examining how people make financial decisions, the new Financial Conduct Authority (FCA) has warned that capping interest rates on payday loans could make it harder for some people to access any kind of credit.

The report, which looks at how consumers choose and use financial products, also challenges the conventional “buyer beware” approach to the risks consumers face.   It suggests that some patterns of behaviour can lead to firms competing in ways that are not in the interests of consumers.

Credit unions: as benefit changes start to bite, is this their moment to come into the mainstream?

Britain has around 400 credit unions, ranging in size from very small community co-operatives to sophisticated financial organisations with assets of more than £100million. They are not-for-profit and focus on providing simple, low-cost financial services. And at a time when interest rates for short-term loans can be into four figures, credit union loans are currently set at a maximum APR of 26.8 per cent.

So why aren’t they are force to be reckoned with? 

Hunting the loan shark in Scotland

A new campaign targeting loan sharks has been launch by the Convention of Scottish Local Authorities with support from the Money Advice Service.

Using the slogan “loan sharks rip lives apart”, the campaign reassures people that they have not broken the law if they have borrowed money from a loan shark and urges them to report the lender to the police.

A series of posters and print and radio advertisements will stress that loan sharks are a real threat to local communities.