July’s money and debt news

posted by Rory in Bailiffs, benefits, Debt, Debt Law Leave a comment

It’s been over a month since the Brexit vote, and we’ve been busy looking at how it could affect your finances if you’re in debt

July has also seen increases to the cost of bankruptcy  in England and Wales, Universal Credit being pushed back, and the release of our latest report, looking into which organisations are the most unfair when dealing with people with debt problems.

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Which organisations are treating our clients unfairly?

posted by James in Collection Process, StepChange 3 Comments

People feel that they’re not being treated fairly by some of the companies they owe money to and borrow money from. That’s the message we received from our clients in our recent research into creditor and debt collector conduct.

Our research reveals the kinds of organisations that are most likely to make people feel unfairly treated, and the kind of unfair treatment they’re receiving. We’re campaigning for changes to be made in those organisations to help those in debt and to reduce unfair treatment.

Have you experienced similar issues to what we’ve found? Add a comment at the end of the article.

Unhelpful practices making debt problems worse

Our research suggests a large proportion of our clients have their debt problems made worse by unhelpful practices from the organisations they owe money to, making a bad situation worse. The three most unfair organisations according to our clients. 1. Bailiffs 50% 2. Local authority 42% 3. DWP 36%

Visit our Credit and Debt Collector conduct report page to see the full table.

The findings reveal that our clients feel most unfairly treated by bailiffs (50% of clients contacted by them felt they weren’t fair), local authorities (42%) and the Department for Work and Pensions (36%). Organisations such as high-street banks (21%) and credit card companies (20%) are further down the list, and while still having unacceptably high numbers, there notably fewer clients feeling unfairly treated.

These results show some that our clients are more likely to feel unfairly treated by bailiffs and public sector creditors than regulated financial services creditors, like banks. We think this could show that robust regulation of financial services is linked to fairer treatment.

How people are being treated unfairly

Our research also showed some areas of creditor and debt collector behaviour that are a cause for concern, such as unrequested credit card limit increases, the treatment of vulnerable people, and treatment of those in debt.

Unrequested credit card limit increases

43% of clients have had their credit card limit increased without asking for it

We found that unrequested credit limit increases made debt problems worse for 30% of those receiving them. Currently, credit card companies must provide the ability to opt-out of such increases, but we believe this research shows the need to change to an opt-in system.

Treatment of vulnerable people

83 per cent of vulnerable clietns said that at least one creditor didn't take their vulnerabilities into account

When asking clients about any vulnerabilities – beyond their financial vulnerabilities – the report finds that 83% of clients said at least one of their creditors didn’t take their vulnerability into account after the client made them aware of the issues.

Poor debt collection behaviour

Our research suggests that poor debt collection behaviour is a problem for many of our clients. Out of the 1,794 people we surveyed:

  • 42% had been asked to make payments they couldn’t afford
  • 41% received phone calls or texts at times they’d asked to not be contacted
  • 14% said their creditor asked them to take out further credit to pay off debts

This shows that bad behaviour from creditors and debt collectors is widespread. This is bad news because we know that this makes it even harder to repay debts. So better treatment of those in debt would help everyone, including creditors, as people would find it easier to repay.

What to do if you feel badly treated by a creditor or debt collector

Make a complaint.

It can be tempting to ignore it because you don’t want to cause a fuss. However, it’s important to let companies know when you’re unhappy with the service you’ve received. It’ll give them a chance to put things right but it also means they can address the root cause and other people will receive better treatment too.

Our website has useful advice on how to complain about a creditor, including some great tips on the right way to go about making a complaint, such as noting down the time of all your phone calls and the names of people you speak to, so you can refer back to them later.

It can sometimes be hard to know if you’ve been badly treated by a creditor. It’s reasonable for them to contact you about a debt from time to time, but they have to act within the rules and treat you fairly. If you’re not sure if they’ve overstepped the mark, we’ve got some examples of creditor harassment which may help.

What can be done about the issues we’ve raised?

Our research into creditor and debt collector conduct shows that there are some problems that need to be addressed. We’re calling for changes to help to improve the way people in debt are treated, including:

  • People who seek advice for debt problems should be given a period of six months to a year of ‘breathing space’, during which interest and charges are frozen and enforcement action is halted
  • The FCA should ensure that credit card limits are only increased where the borrower actively opts-in to this
  • Organisations should ensure their debt recovery practices and policies have affordable and sustainable repayments at their heart 

Read our full report to get all the details about our research into creditor and debt collector conduct, and let us know your thoughts in the comments below.

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How Brexit could affect your finances if you’re in debt

posted by James in Debt Law, Economy Leave a comment

The people of the UK have spoken and have decided that we should leave the EU. There are endless articles online about the political ins and outs, arguing one side against the other. We’re going to sidestep the debate and instead investigate the practical implications of Brexit on your finances.

The short answer to how Brexit will affect the majority of people is this: things will probably carry on as normal, in the short term at least.

The long answer is a bit more complex…

The key thing to note is that very little has changed since the vote to leave the EU and it’s still too early to see what the long term impact of Brexit will be.

We do have a slightly better idea about where the potential changes to your finances could occur, based on short term predictions of the economy. So let’s take a look at the different areas that Brexit could affect you, and how soon these changes could happen. Continue reading »

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20 weird and wonderful ways to make money – part three!

posted by Rachel in Debt, Money maximising Leave a comment

It’s not just about car boot sales and selling stuff on eBay. There are so many easy and fun ways to make more money. Part one and part two of our ‘weird ways’ series continue to be wildly popular, so we thought it was high time to break out part three!

From testing dog food to queuing up for cash, let’s take a look at some more miraculous methods of maximising your moolah…

(The following ideas for making extra money may not be suitable for all readers and have been covered for entertainment as well as information purposes).

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Avoid online scams: top tips to help you

posted by Jenny in Dodgy practice Leave a comment

We like to think we’re a nice bunch of people and we can only assume that you are too. If only everyone could be as lovely as us, eh? Unfortunately, the world isn’t all sunshine and roses. Certain people are determined to scam us out of our money and they’ll try all manner of sneaky tricks to do it.

That’s right. You’re in the real world now and every day can feel like a battle against the con-artists of the web. From hacked email accounts, phishing scams or ID fraud there’s a lot to look out for.

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June’s money and debt news

posted by Rachel in Credit cards, Debt, Debt Law Leave a comment

Unexpected bills, payday loan complaints and debates over credit card limit increases were all hot topics in money and debt related news this month. 

In brighter news, for those hoping to get on the property ladder, chartered surveyors predict that house prices may fall over the next three months – the first fall in six years. And the final design for the new £5 note has also been revealed, and tests show that these new notes can withstand the washing machine much better than their predecessors!

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