Know your rights: July’s debt news

posted by in Budgeting, Debt news

Justice scales law

Justice scales

We start with payday loans: as we reported earlier in the month there are a growing number of unemployed people that are struggling to repay them.

With this in mind a new set of commitments have been launched to raise standards and improve customer service in the payday and short term lending industry.

It sets out that short-term lenders should:

  • give clear information about how a payday or short-term loan works and an example of the price for each £100 borrowed (including fees and charges)
  • not pressurise customers to take out a loan or extend (roll over) the term of an existing loan agreement
  • carry out a sound, proper and appropriate affordability assessment and credit vetting to check that customers can afford the loan
  • set out clearly how continuous payment authority works and the customer’s rights to cancel this authority, so they can decide if this type of repayment is acceptable to them
  • notify customers at least three days in advance of recovering payments through a continuous payment authority
  • freeze interest and charges if a customer is in financial difficulty and making payments under a repayment plan, or after a maximum of 60 days of non-payment

Worryingly a few lenders are automatically refusing mortgages for people who have taken out payday loans in the past. This could even affect people that have repaid the loan without difficulty.

New power strengthens consumer credit protection

The Government is giving the Office of Fair Trading (OFT) the power to suspend a consumer credit licence with immediate effect where there’s an urgent need to protect the interest of consumers.

Currently the OFT has the power to suspend or revoke a consumer credit licence but businesses can appeal this decision. Firms are able to continue trading during the appeal period, which can last for up to two years and cause more harm to consumers. The Citizens Advice Bureau welcomed the decision saying consumers will be better protected.

The OFT has also launched a review of the personal current account market and outlined a longer term programme of work aimed at addressing competition concerns and a lack of customer focus across the wider retail banking market.

The review will look at whether banks have been successful at improving the switching process, increasing the transparency of personal current account charges and allowing people to manage their accounts more effectively.

Bailiff fees

The Local Government Ombudsman (LGO) has issued a report to highlight the issue of bailiffs’ ‘double charging’ for visits. The LGO singled out Blaby Council after its bailiffs charged a woman eight visit fees twice, for one visit by one bailiff.

Keep an eye out for easy to understand information about how to deal with bailiffs, coming soon to MoneyAware.

Are you on a minimum wage?

National minimum wage rates are increasing for apprentices and workers over the age of 20.

The new rates will come into force on 1 October:

  • £6.19 per hour for workers aged 21 and over – a rise of 11p
  • £4.98 per hour for 18-20 year olds – no change
  • £3.68 per hour for workers above school leaving age but under 18 – no change
  • £2.65 per hour for apprentices – a rise of 5p

Check your driving licence

You may not know but everyone has to update the photo on their driving licence every 10 years. There’s a fee of £20 but this is a lot cheaper that the £1,000 fine if you forget or don’t realise you have to do it! Over 1.6 million drivers could be at risk of being fined so check yours now to avoid a hefty bill.

Debt and relationships

Last month we talked about how debt and relationships are closely intertwined. We see all too often how divorce or separation can lead to unmanageable debt and we released a video to highlight the issue.

We found that 25 Brits a day contact us with debt problems after separating from their partners, and taking action early is the key.

If you’ve got debt problems from a divorce or separation contact us for help. And for more information, read our blogpost The stress when debt and relationships collide.

To finish on a happy note…

We told you last month that you should reclaim PPI for free. We’ve since blogged about how reclaiming PPI for free really works and we even had a tweet from a reader who took our advice and got an offer for £2,650 – not bad for filling out a few forms!

We hope you continue to find our updates useful and as always please let us know if you come across anything that you think is useful for others to know. And if you want even more up to date information don’t forget that we’re on Twitter and Facebook too.

Pavan Gata-Aura is a qualified debt advisor with 6 years of experience. She enjoys spending time with her two children, fundraising for charities, has spent time volunteering in Africa and takes part in organised races.

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