Financial websites that misled consumers (and confused a tax inspector)

Two pieces of research from Citizens Advice and Which? suggest that, far from becoming easier for consumers, financial services information remain confusing and sometimes downright misleading.

An analysis by Citizens Advice discovered that some credit brokers were passing themselves off as payday lenders to take advantage of the rise in demand for short-term high interest loans, while others were charging unexpected fees for arranging loans. Meanwhile a  Which? investigation into unauthorised overdraft charges suggested that they were almost impossible for customers to calculate.

CA’s survey of clients with complaints about credit brokers discovered that just over half of respondents (58%) were charged unexpected fees – some as high as £70 – while others had fallen foul of what were described as “deceptive practices”.  These included websites or marketing text messages that did not make it clear they were from a broker, so consumers often believe they were dealing directly with a payday loan company.

Which? asked a panel of consumers to work out the total cost of using an unauthorised overdraft at the 12 biggest banks’ main current accounts.

They were given a mock statement and asked to calculate the overall cost from information on the banks’ websites.  The consumers, who included an inspector of taxes and a retired headteacher, got just 10 of the 72 calculations right between them.

For more on the Citizens Advice story, click here

For more on the Which? story, click here