Know your rights: June’s debt news

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What a month we’ve had in the world of debt news! It’s been a pretty hectic few weeks, from warnings about identity theft and changes to our credit files, to debt management companies closing down and Wonga launching its new look.

If you’ve not had chance to keep up with it all, don’t fear! This bumper debt news post will get you right up to date.

What are you waiting for?! Grab a cuppa, stick your feet up, and have a read…

Mortgage benefits to be cut

Know your rights -June's debt news

Know your rights – June’s debt news

Around 167,000 homeowners are to have their mortgage benefits cut by an average of £756 per year.

Under the Support for Mortgage Interest (SMI) scheme, the government pays the interest on the first £200,000 of outstanding mortgages.

People who receive certain benefits, such as Income Support, income-based Jobseekers Allowance, income-related Education and Support Allowance or Pension Credit are among those who can qualify for SMI. However the interest rate the government pays will drop from 3.36%, which is the rate it’s been set at since October 2010, to 3.12%.

For someone on the SMI scheme with a £150,000 25-year mortgage, that means the government’s payments will fall from £454 to £391 per month.

If you’re a StepChange Debt Charity client and will be affected by the changes to the SIM scheme, please get in touch with us to let us know.

Stop thief! Identity theft is on the rise

Identity theft has risen by almost one third, with 34,151 victims recorded in the first three months of this year, according to fraud prevention service Cifas.

Perhaps unsurprisingly, 80% of identity fraud was attempted online with credit cards or bank accounts. The average age of ID fraud victims was 46.

To avoid being targeted, you should never give anyone your PIN or password, regardless of whether you’re asked for it by letter, email or phone call.

If you think someone has stolen your identity then you should contact your bank or credit card company. You should also let the police know by calling their 101 non-emergency number as soon as possible.

Alternatively, you can report the suspected fraud using the police’s fraud reporting service, Action Fraud.

Have you been cold called about your pension?

The Information Commissioner’s Office (ICO) is concerned about the number of cold calls people are receiving about pensions.

Over the last two years, it’s estimated that one in three people over 55 has been contacted about their pension, without having asked for it.

Gareth Shaw, from consumer charity Which?, says you should look out for people ringing you out of the blue to offer investment opportunities, free pension reviews, legal loopholes (that old chestnut) or early access to pension cash.

Find out how to deal with nuisance calls on our Got Their Number page.

Three more debt management companies are closed down

This month, three more debt management companies have been stopped from trading by the Financial Conduct Authority (FCA), which regulated them.

Sterling Financial Limited (Sterling), Haydon Associates Debt Management Consultants Limited (Haydon) and Clear View Finance Limited (Clear View), which are all based in Staffordshire, failed to provide their customers with regular written balance statements to customers, as they are required to do.

Most customers of these companies have had 90% of their monthly payments deducted in fees, which means that only 10p in every pound that they were paying was actually going towards their debts. Because of this, the FCA is warning customers of these companies that they may have higher debt balances than they might expect, and are urging them to seek free debt advice.

If you or someone you know has been affected, take a look at this blogpost on what to do when your debt management company closes down.

Household bills to appear on credit reports

Credit agency Experian has revealed that payments to gas, electricity and water companies will be mentioned on credit reports. Previously, credit reports usually only showed information on payments for loans and credit cards.

Although the move might benefit people who’ve struggled to build up their credit file, it could have a negative impact if a mistake is made, for example if a utility provider claims a bill hasn’t been paid.

“No one will find their record unfairly harmed as participating suppliers have signed up to the rules that control how information is shared with credit-rating companies”, an Energy UK spokesperson told This Is Money.

If you’d like to find out more about boosting your credit file, take a look at our blogpost on how to improve your credit report.

50 people every hour at risk of losing their home

According to the housing and homelessness charity Shelter, in the last year 50 people per hour have been at risk of losing their home.

Among the worst affected are those in England’s capital. In the east London boroughs of Newham, and Barking and Dagenham, one in every 38 homes was subject to a possession claim.

“These staggering figures show just how many people are fighting to keep their families in their homes, after dealing with the double blow of welfare cuts and a drastic shortage of affordable housing,” said Alison Mohammed from Shelter.

If you or someone you know is affected, take a look at our website for more information for what to do when your house is at risk of repossession.

Delay in receiving disability payments unlawful

The High Court has ruled that it was unlawful that two people had to wait nine months to receive their Personal Independence Payments (PIPs).

While they waited for the payments to come through, the unnamed pair found themselves turning to loan sharks and food banks to make ends meet.

Although this is good news for the individuals involved in the case, the PIP rollout is still to be completed and there could be hiccups ahead, so if you’re entitled to a PIP that’s something to be aware of. Around 1.5 million people who currently receive disability allowance will be moved into the new scheme at the same time as existing PIP claimants face reassessment.

Wonga re-launches with a new image

Wonga has launched its new image in an attempt to restore its reputation after a year of scandals and fines. Although Wonga has a new advert and several new products, their annualised interest rate (APR) currently stands at 1,509%.

Wonga hopes its new image will appeal to the 13 million people in the UK that it describes as “cash and credit constrained”, who are “under-served by traditional lenders”. This includes people with minor marks on their credit files or who are new to borrowing money.

Our chief executive, Mike O’Connor, responded by highlighting the role that payday loans can play in getting people into a cycle of borrowing that makes it harder for them to become debt free.

“Early intervention, advice and support to help people deal with their debts in a sustainable and affordable way is one of the best ways to achieve this”, he said. You can read his full response to the rebrand on the Guardian website.

Petrol prices in Britain among most expensive

Britain is one of the most expensive countries in the world to buy unleaded fuel, according to a survey by Santander and This is Money.

Britain comes in at 7th place on the list, charging an average of £1.21 per litre. In general it’s estimated that the British spend around 9% of their income on filling up their tank.

The (kind of) good news is that we’re not the worst off – hurrah! Petrol is still more expensive in Turkey, Hong Kong, Holland, Italy, Israel and Denmark. Norway takes top of the table, charging an average of £1.52 per litre of petrol. Ouch.

If you find your car is guzzling money, take a look at our top tips to make your fuel go further.

Could you be paying for a phone you’ve already bought?

According to research from consumer group Which?, consumers collectively waste a whopping £355m each year paying for handsets they’ve already bought.

Nearly half of people who come to the end of their mobile phone contract don’t switch immediately, which means they pay an average of £92 extra towards a handset they already own.

If you’ve come to the end of your contract, make sure you’re clear about what you’re continuing to pay for. If your handset still does the job, you could have a look for sim-only deals, which often works out a lot cheaper.

Gold nugget worth £10k found in Scotland

A Canadian man known only as John has discovered a 18g nugget of gold worth an estimated £10,000 in Scotland. Now I know what you might be thinking, but this golden nugget was the real thing! John found the precious metal while panning for gold in Wanlockhead, in the Southern Uplands.

Gold nuggets of this size are extremely rare in Scotland. The last time a sizable nugget of gold was found was in 2002, and it weighed just 4g.

“I like to tell my students that everyone goes home with a flake or two of gold, but this is exceptional,” said Leon Kirk, John’s gold-panning instructor.

I think I just found my new hobby!

Student changes name by deed poll to avoid Ryanair fine

A student has legally changed his name because it was cheaper than paying a Ryanair charge to amend a booking error. You read that correctly.

Adam Armstrong was presented with a whopping £220 admin fee after his girlfriend’s dad mistakenly entered his name as being Adam West when booking a flight to Ibiza.

Rather than pay the charge, Adam changed his surname to West for free and then drove to Liverpool to get a new passport for £103.

“I just thought it was completely ridiculous,” Adam said. “All they needed to do was hit the backspace key on the keyboard.” Computer says no, Adam.

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Laura Davies joined the MoneyAware team in May 2014 from a background in public relations. Outside of work, Laura enjoys travelling, reading, drinking tea and spending too much time on Buzzfeed.

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