UPDATE: This article was published in November 2015. Make sure you’re up to...
November’s debt and money news
It’s time for debt news again! As usual, things have been happening. Money things. Debt things. Things for us to report to you.
What can be expected from this month’s round up? Payday loans are causing problems, married couples are missing out on tax allowances, and we’re getting a new pound coin.
That’s not all though. Voucher scams, benefits caps and a debt collection company writes off millions of pounds worth of debt. Well, I did say things had been happening! There’s a lot to catch up on, so you’d better read on…
Payday loans are still causing problems
New rules on payday lending were introduced in 2015 to make the market fairer for borrowers. Our latest research investigates the impact these changes have had on the high-cost short-term credit market.
After surveying clients who’d taken out payday loans after the new rules were in place, we found that:
- 26% didn’t think their lender had taken reasonable steps to check they could repay
- Some were able to take out a new loan when they had other outstanding payday loans, which could be a sign of a debt problem
- 28,000 people came to us with payday loan debt in the first half of this year and over a third of them had three or more loans
We’re calling on the FCA to make the rules stricter on payday lending and we want the Government to do more to make affordable lending accessible to the people who need it most. Read our full report.
Don’t fall for this voucher scam
If something’s too good to be true, it usually is. It seems that’s been the case after fake vouchers for supermarket and high street shops have been advertised online.
The fake voucher scams are showing up across social media channels and usually feature a link. When you follow the link to ‘claim your voucher’ you’ll be asked for personal information and this can lead to a whole host of issues like phishing scams and premium rate phone calls.
If you’re ever in doubt about a voucher or offer you’ve seen online, don’t click any of the links advertised with it, and instead give the actual retailer a call. They’ll be able to confirm if it’s genuine or not.
A new pension and debt advisory service
The government are planning to offer a new service that’ll provide advice on pensions, money and debt. There’s currently no name for it yet and no timeline for when the service will be available.
The new service will take replace three existing services:
- The Money Advice Service (MAS), which was cut in the March budget
- Pensions Wise
- The Pensions Advisory Service
The Pensions minister, Richard Harrington, believes “a single guidance body will be more efficient and will help consumers make the right financial decisions.”
Are you entitled to married tax allowance?
MoneySavingExpert.com recently reported that 3.2 million couples eligible for Married Couples Allowance are yet to claim it.
The Married Couple’s Allowance allows married couples to transfer a portion of their tax free allowance from one spouse to the other, if one of you is a non-tax payer. The total savings for eligible couples works out at just over £200 a year.
You can find out if you’re eligible on the Gov.uk website. Applications only take a few minutes, so it’s definitely worth checking to see if you can do it!
The old pound coin has had its day
If the excitement of the new five pound note has faded a little too fast then don’t worry. A new £1 coin is due to be released in March. We’re really being spoilt aren’t we?
So, why are we getting a new coin? Well, lots of the pound coins currently in circulation are actually counterfeit, and we can’t be having that, can we?
The new design features some extra security features, making it harder to replicate. Although the exact details of those security features are yet to be revealed.
What we can tell you is that the new coin will have 12 sides and features an image similar to a hologram. Sounds very fancy. You can read more about it in the BBC’s report.
No more paper receipts
Retailers are increasingly offering paperless receipts to consumers. The BBC reported that Tesco are the latest shop to trial e-receipts.
Some of the other retailers to offer paperless receipts include Apple, Argos, Topshop and New Look. The new process involves giving the retailer your email address at the checkout for them to email over the receipt (although you’ll still get the option to review a paper receipt if you prefer).
A benefit of paperless receipts? No more scrambling around in your wallet or bag for a receipt when you need to return something. Hooray! And it’s good for the environment too, of course.
Updated benefits cap put in place
An updated cap on benefits was put in place on 7th November. The cap reduces the maximum amount of benefits a household can receive and includes child tax credit, income support and housing benefit among others.
Before the cap, claimants could receive a maximum of £26,000 per year. As of 7th November this is £20,000 per year outside London, and £23,00 inside London. Any household receiving more than the cap will have their Housing Benefit reduced to bring them back within the limit.
The benefits cap will apply to the total amount of benefits received in one household.
The cap has been introduced as a way to reduce public sector spending on welfare, however there are fears that it’ll just increase poverty and impact single parent families in particular.
You can find out more about the benefit cap on the Government website, and see if you will be affected by using the Government’s online calculator. If you’re worried about the benefits cap and dealing with debts, please contact our Helpline for free debt advice.
Debt collection company writes off £414 million
Debt purchasing and collections company Motormile Finance has agreed to write off £414 million pounds worth of debt for over 500,000 of its customers.
The company agreed to write off and refund the debt after an investigation by the Financial Conduct Authority (FCA) found they had inadequate systems, and didn’t conduct the required checks when buying a portfolio of debts.
As well as agreeing to write off the debt, Motormile Finance are looking into making improvements to their processes to ensure the issue doesn’t happen again. They’ve also agreed to refund over £150,000 to more than 2,000 people who’d already started repaying.
If you’re a Motormile Finance customer, they’ll be in touch to let you know if you’re affected by the write-off, and how they’ll process it.
Crime doesn’t pay
A man thought he’d try his luck with a personal injury insurance claim after a car crashed into his vehicle… while he wasn’t actually in it.
The Mirror reported that after seeing the crash happen, the man dashed over to the car, jumped in and then got out again clutching his neck – as though he’d been hurt as a result.
The man attempted to file an insurance claim stating that he, his partner and his three children were all in the car at the time of the crash and experienced injuries. CCTV told a different story though, showing the footage of the man running to the car and also revealing that only two of his children were actually in there at the time of the crash.
After the fraudster was found out he was sentenced to six months in prison, although this was suspended for two years, and a £200 fine.
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