May 19 2013
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Why PPI Claims are Big News

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Anyone who has taken out a loan in the past few years will be well aware of the costs involved, and when it comes to payment protection insurance (PPI) they may also be aware that they can claim back the fees on the policy if they can prove it was mis-sold in the first place. PPI is an insurance policy designed to cover the monthly repayments on a loan or mortgage – or any credit agreement – in the event the policy holder is made redundant through no fault of their own, but it is a product that has become tainted in recent years thanks to widespread mis-selling.

PPI Claims for Mis Sold Policies
The banks, and other lenders, have been told that they must pay back all fees pertaining to mis sold policies, but how do you know you have been mis-sold a PPI policy? The regulations have always stated that customers should be given the opportunity to shop around for the best PPI yet, in many cases, consumers were led to believe they were obliged to take out the lender’s own policy. Furthermore, some borrowers were sold policies without being told about them, and others have been paying into PPI policies that would never have been of use to them.

Deadline for PPI Claims
One of the problems facing the banks is that they see no end to the saga; so far it is estimated that around £14billion has been put aside by the banks to pay back the fees on mis-sold policies, and they are constantly revising the amount they need to repay. This has led to calls in some quarters for a deadline on claims, although such a proposal has yet to be agreed upon. For the consumer the best advice is to get a claim in as soon as possible, and it is also sensible to use an online PPI calculator to get an idea of the amount they may be entitled to.
As just one of many scandals to have affected the banking industry the PPI saga is showing no signs of coming to an end, and it remains to be seen exactly how much money the lenders will need to pay out in the long run.

May 7 2013

Think Twice Before Buying Any Financial Products – Here’s Why

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You can no longer rely on banks and building societies to always do the right thing, to be on your side.  The British public have had to swallow some harsh truths of late, what with economic recession, unemployment, increasing inflation and debt.  Add to this that the institutions we trust with our money in savings and our financial plans for the future are the ones partially responsible for the financial downturn, and that they are not the pillars of trust we once believed them to be.  The story of the PPI scandal is a prime illustration of this.  It is in the news so much in the past few years as it has become realised to be the biggest financial scandal of the past decade.

Payment Protection Insurance is a financial product sold alongside loans, mortgages and other types of finance.  The insurance policy’s purpose was to cover any repayments if the borrower’s personal circumstances had changed. The insurance covered people who lost their jobs or became ill, therefore could not have been able to pay back the lenders. An agreed amount would have been paid back to the lender on a monthly basis to cover the cost of repayment.

Many people in the UK had been mis sold PPI when taking out mortgages, personal loans, and credit cards as many were not in fact suitable for it.  Many banks sold the product to people who were unemployed, self-employed, retired and even those who would not be able to work again due to illness. People who fell into these categories who were sold this product as they took out money from banks were actually victims of the mis selling. Also many did not need the insurance although they were in employment.

Furthermore, there are many ways as to how banks would have sold the PPI to customers. The most common way people would have been mis sold to is to have been given incorrect or misleading information. In some instances people were told it was compulsory to take out the insurance. This was a false statement which led to many victims thinking they would have to do as the banks say. In other instances, people would have been told that the insurance covers things which in reality it does not, making them falsely believe the product is appropriate for them.  The worst cases are where some customers had no idea that they even had the additional cost of the PPI premium added to the cost of their loan.

The banks in the UK now face a massive compensation bill in order to provide redress to customers who were mis-sold the PPI, to the tune of £13 billion so far and growing.  The victims of the mis selling of PPI can now claim back any money which they have paid in un-necessary premiums. A High Court ruling has led to banks paying back money to compensate people who were not suitable for PPI and in some cases provide interest. Anyone who thinks they are victims of the scandal can have their case reviewed by the banks and obtain compensation if they are successful. They can do this own their own or they can get a specialist PPI compensation claims company to do it all for them.

The scandal has shown us the ugly side of the banking industry.  Some bank staff were on commission of over 80% for doing the mis-selling.  Billions and billions of pounds worth of PPI was mis-sold, billions is yet to be claimed back by the people of the UK.  New regulators have now replaced what was the Financial Services Authority (The Financial Conduct Authority and the Prudential Regulation Authority), and the banks know they are being watched more carefully.

All we can do now is learn from lessons past and err on the side of caution.  Think twice about what you really need, ask all the questions, read all the small print. Take charge of your money, arm yourself with information.  Don’t let anyone make your decisions for you – you know whats right and whats best for you.

Apr 17 2013

Take Charge and Protect Your Business – Key Man Insurance

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Have you ever thought about what would happen if you were no longer able to run your business? Could you still afford to pay someone else as replacement as well as receive your share of pay? Could you make up for the loss the business is facing at the same time?  For peace of mind, key man insurance could be the solution.

A key man in the business would be a vital staff member, without whom the business would incur losses. They could be the business owner, partner, someone with a substantial amount of knowledge for the success of the business or someone who brings in a lot of income like your top salesperson. For small businesses, if a key person dies or suffers a critical illness it is likely that the business could suffer. When this is the case, some may resort to closing down the business as a result of not finding a solution, however with key man insurance, businesses would be protected if such unfortunate circumstances were to arise.

The cover would usually be taken out by the employer, therefore upon the death or critical illness of the employee, the amount would be paid out to the employer for the business.

Recent research has shown that 39% of business owners expected to be out of business within 18 months after the death or critical illness of their top staff. Currently the UK has 3.9 million small businesses with less than four employees. With such a small number of staff, death or critical illness of one can seem a major issue. Especially if that staff is one who is generating the income of the business.

The lump sum paid out upon the death of the vital staff member would be made to keep the business financially stable so it does not face losses. It also can help with the costs of hiring a replacement or having to train a new member of staff as a replacement, as well as paying off loans.  It is cheaper than you might think too; Key Man Insurance quotes are available here.

Indeed, for any business, expansion, growth and profit are the key aims. Employers select people who they think will bring out the best in the business. Key man insurance allows employer to take control of the situation, manage risk, keep the business stable and have peace of mind to carry on doing what they do whatever the circumstance.

Mar 25 2013

Finding Alternatives to Bankruptcy

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Like any big decision in life, before deciding to declare bankruptcy one should take charge and thoroughly research alternative ways to find a solution for dealing with the debt. Although it can put an end to trouble in some cases, there are also several disadvantages that come with it. A better way to resolve the issue would be to set up agreements with the person to whom the money is owed.

There are many ways to do this. Individual Voluntary Agreements (IVA), Debt Management Plans, Administration Orders, and Informal Arrangements are all methods of paying back the creditor without having to declare bankruptcy.

Firstly an Individual Voluntary Agreement (IVA), is a legal agreement between the creditor and the borrower. The agreement acts a shield in preventing court orders from coming through and also the need to become bankrupt. Under the Insolvency Act 1986, if someone owes more than £12,500 to two or more creditors and is struggling financially to pay back the money, they are eligible for this arrangement. Using this method monthly payment would be paid to the creditor at a rate which is affordable, with no demands for the money to be paid straight away. Any interest would also be frozen.

Another method would be Debt Management Plans. This requires a representative to act on the borrowers behalf and come to some arrangement about how much should be paid. The borrower does not need to negotiate with the creditor as the representative would usually do this. Debt Management Plans are kept private and do not go on an official register. The payments made will depend on the individual’s income and certain other criteria. Interest is also frozen.

Administration orders are another method. This requires the borrower to owe money to two or more creditors and have debt less than £5000. Administration orders are only available to individuals and not businesses. If this is the chosen option, one single payment would need to be made to the County Court who would then distribute the money to the lenders. A certificate of satisfaction would then be granted as proof of payment.

Also, an informal arrangement may be made. This is an agreement with the creditor to pay back the money at a reduced rate. The borrower would need to give reasons as to why such an arrangement is needed. This can be done by the individual themselves or by a Citizens Advice Bureau. Once a settlement is made, the creditor and borrower can resolve the issue.

Mar 20 2013

Getting Divorced? Take Charge

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The irrevocable breakdown of a marriage brings many stresses and strains no doubt, however the financial implications are an area that cannot be ignored due to the long-term nature of their consequences.  The division of assets and property (and yes, liabilities too) are a leading concern for most couples.  The key is to take charge to protect your financial position and security and not leave it to chance: get yourself top divorce advice as soon as possible.

As soon as a legal application for separation or divorce is made, courts have the power to make orders relating to sale or transfer of property, assets and funds as well as pension and maintenance payments.

Ancillary Relief Proceedings is the legal name used to describe the financial issues in the aftermath of separation or upon divorce proceedings.  Either party can apply to make financial claims and it would be up to the court to apply the divisions according to their own criteria and judgement based on many factors.  The divorce law in this area comes mainly under the the Matrimonial Causes Act (1973).

Always and as it should be – the primary factor would be the welfare and needs of children if they are present in the case.  After that considerations as to fair divisions will be based on a number of things namely earnings, assets, property and other resources presently and in the near future, and monetary obligations, needs and standard of living again both presently and in the near future.  The ages of the couple and length of marriage, as well as any incapacities either party may have are also key factors, and the issue of the husband or wife’s conduct would also be considered.

Courts decide the on a case by case basis due to the nature of such matters – however there are cases where a Clean Break Order is made.  This means it may be ruled that its best to end either party’s financial obligations upon one another.  Rulings include not only divisions but longer term maintenance payments too, amounts as well as durations.

This is a very personal and complex area of law.  Again, the more information you have the better you can understand your options, and the earlier you seek such information and advice, the better to secure your financial future.

Mar 12 2013

How Often Should You Get a Payday Loan?

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There is no denying that times are tough for many people around the world. If you struggling to pay this months electricity or gas bill, then it may be beneficial to get a short-term cash advance from a payday lender.

Everybody experiences financial hardship from time to time, which is why payday loans are an excellent option to tide you over and relieve your money worries.

However, if you find yourself getting payday loans on a regular basis, and even applying for one just to pay off another, then you may have a big problem.

You see, it’s very easy to find yourself deep in debt if you are not careful with payday loans, and by the time you realise the seriousness of the situation, it’s usually too late.

Quite simply, you should look to take control of your finances, by creating a long-term plan so you don’t end up needing to rely on payday loans every month just to scrape by.

Now this might seem easier said than done, but at the end of the day it really isn’t that hard. In simple terms, you need to work out how you can increase your income, while at the same time reducing your expenses. If you do this, then getting multiple payday loans will soon be a thing of the past.

Consider other loan options

Also, before you send in that application to the payday lender, it’s worth considering what other options you have on the table.

One such option is to ask family and friends for a short-term cash loan. Sure, this might seem a little bit awkward at first, but if they say yes then you will get the cash that you need without the high interest rates attached.

Another option to consider is your existing forms of credit. Maybe you have a credit card or a bank overdraft available?

If so, then it is worth contacting the credit card company or bank to see if it’s possible to extend your credit. The main benefit of going down this route is that you might be able to get the cash you need, but at a lower interest rate, and over a longer period of time.

Lastly, don’t overlook “hidden” sources of money that you have lying around the house. Maybe you have that video game console that you never play on anymore, or a gold watch that is buried at the bottom of your drawer?

Items like this can be sold for instant cash, at places such as pawn shops, or even at auction sites on the internet.

Feb 28 2013

Lower Your Outgoings to Keep Clear of Debt

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Getting out of debt is a lot harder than staying clear of it in the first place, so if you can organise your expenditure in a way that you earn more than you spend, you’ve already hit on the winning formula to life. However, even if you have already accumulated some debt that you want to clear, the same philosophy holds true.

Putting things on credit cards should not be an option, unless you have your card set up to be automatically paid off before you accumulate any interest each month. This is easy enough to set up with your bank, so that the card payment is made direct from your current account each month. If, however, you want to use credit cards to buy before you can afford stuff, then you’re sure to end up getting into debt. If the temptation to spend on credit is too great, then take the credit and store cards out of your wallet, cut them up or lock them in a drawer and live without them.

Looking at general living expenses, if you find it difficult to balance the books each month, reassess your budget and see if there are any areas you can make savings. A strict budget can really tip the balance for people on a tight income – making the difference on falling into debt or not.

Some things to consider if you’re always on the cusp of going overdrawn:

  • Change your supermarket. We all know that some supermarkets have a superior reputation compared with others, but is the difference in quality really justified by the extra expense. Go shopping somewhere cheaper for a couple of weeks and be honest with yourself whether you can really tell the difference in the food quality or not. A reduction in the weekly shopping bill will make a big difference to your monthly spending.
  • Check your bills. Regular household bills like gas and electricity don’t tend to get much attention. We just accept they need paying and move on. But it’s worth checking what the competition is charging every now and then to make sure there isn’t a more attractive tariff available out there. Similarly, do the same for insurance and telecoms.
  • Limit luxuries. When you’re struggling to make ends meet, there’s not really much excuse for paying out on the extras in life. For instance, you could dispense with the gym membership and start walking and jogging in the local park. Have fewer nights out; cook a special meal at home instead and invite friends over. It’ll work out cheaper than dining out; especially if you have like-minded friends who will return the favour now and then.

You can reduce monthly spending by using these ideas and it will help balance the household books. However, if you’re already struggling with unpaid debts and want to get on top of the situation, you could always get professional advice. There are a wide choice of debt management companies UK and US consumers can contact for assistance with debt management, but there are also plenty of financial charities that can provide advice as well.

Feb 26 2013

Barclays Fined £4.3million For Delaying PPI Claim Payouts

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Last week, part state-owned Lloyds Banking Group, was fined £4.3million by the Financial Services Authority (FSA) for delaying compensation payments to customers who were mis-sold payment protection insurance.

The fine is a direct consequence the banks’ decision to place all claims on hold between Dec 2010 and May 2011, during which time the Judicial Review into the handling of PPI complains was ongoing. The FSA had warned the banks involved to process the claims as normal during this period but under the direction on British Bankers Association (BBA), the bank decided to ignore the warning.

The other big banks, including HSBC, RBS, and Barclays had all placed PPI claims on hold during this period and it stands to reason that they will also be fined for doing so. The FSA has already taken action against the Co-Opertaive, who were fined £133,300 in Jan this year, for their discretion’s relating to delayed processing of PPI complaints.

The news of the fine was welcomed by Darren Carter from leading PPI Claims Company, MisSoldPPIClaimsCo.co.uk, who stated that “it’s about time the FSA got tough on the big banks… we were disappointed when they escaped being fined for mis-selling PPI, along with the other lenders back in 2008-2009… so this has been a long time coming”

He went on to say that “We don’t think this is enough though. The banks are deliberately delaying claims in the hope that the claimants will eventually drop their complaints and they’re also rejecting valid claims in order to flood the FOS with an unmanageable workload. Worse still, they come out every now and then and attack claims management companies for submitting bogus and fraudulent claims, which is absolutely laughable… Lloyds has a 98% uphold rate at the FOS!”

This sentiment is supported by Chief Ombudsman, Natalie Ceeney, who recently told the Treasury Select Committee that “Banks not investigating cases properly played into PPI firms’ hands. In a quarter of cases where banks said customers didn’t have PPI, they did – the banks were not doing their job properly,”

If you have been mis-sold PPI, click here to visit the PPI Claims Company website, where you can find more information on how to recover your money.

Feb 14 2013

Beware Pension Fund Predator Companies

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Its important to take charge of the different kinds of finances you and your family are prioritising. Many people work hard all their lives and save whatever they can afford for their retirement.  The recession has, however, affected the amounts that many expected to receive in annuities and interest on savings, with many pensioners losing large chunks of what they had invested towards.  It is such turbulent times that unfortunately some fraudsters are using to prey on unsuspecting pensioners who are in financial difficulty.

The Pension Minister Steve Webb has partnered with the Finances Services Authority (FSA) and other concerned agencies like the Fraud Office to launch a campaign that would make everyone aware of a scheme that has been affecting many people already.  Companies are offering people, mainly around the 40/50 years old mark, the opportunity to take out the money in their retirement fund early – at a cost of a fee that can amount to half the total value of the amount in the fund.  Furthermore, they are often left with a hefty tax bill which they are not expecting.

The harsh financial climate saw around £200 million of pension fund money released in 2011, and although there are no exact figures as yet for 2012 it is estimated to be higher.  Although such cash release schemes have been around a while, and it is legal for up to a quarter of a pension fund total to be released from the age of 55 onwards, these schemes target people in their 40s onwards. They also operate by spam emails, unsolicited phone calls and via direct mailings.

The government is backing this scheme to raise awareness of such pension ‘liberation’ companies – highlighting the dangers of such pension fund predators on people who are vulnerable due to financial stress, debt, redundancy etc.  They hope to warn people who are signing up to the scheme when they apply to transfer the funds, using the transfer pack to send clear words of warning concerning the pension predators backed by strong visual imagery of a scorpion predator. Words include the resounding message: ‘Don’t let your pension become prey.’

Feb 4 2013

Small Businesses to be Paid Back by Big Banks!

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The city regulator, the Financial Services Authority has revealed that around 40,000 interest rate swaps were mis sold since 2001. The FSA have carried out an investigation in order to find out whether this complex financial product was correctly sold to the right businesses.

Findings have shown that over 90% were mis sold to ‘unsophisticated’ businesses. The original reason behind the complex derivative was to protect businesses from rising interest rates. Small businesses are now however facing debt in trying to pay the banks back.

Barclays, HSBC, Lloyds and Royal Bank of Scotland will now have to review each case on an individual basis and assess how much needs to be paid back. Barclays has said “Once final steps have been agreed by all parties we look forward to engaging with eligible customers to commence the review and redress process.”

The designated Chief Executive Officer of the Financial Conduct Authority which is to replace the FSA later on in the year has said “It depends whether a business would have bought that product anyway”.  He then added “In such cases, it’s a case of ‘caveat emptor’ ['let the buyer beware'], but in other cases, the contract should be ripped up.”

It is not yet clear as to how many claims will be made, however it is estimated that the banks can end up paying as much as £1.5bn to the people it was sold to. For now the review by the FSA only includes the four major banks; small banks will be reviewed at a later date. The FSA has said that the review and compensation should “should aim to put customers back in the position they would have been in, had the breach of regulatory requirements not occurred”.

In order for the victims to claim compensation they would need to show that they would not have bought an Interest Rate Hedging Product. If they would have however chosen a different product than the one they were sold, partial compensation can be claimed. If however the business faced no loss or would have bought the product anyway, then no compensation will be given.

“Banks will be contacting those companies affected shortly, prioritising those with the greatest need,” said British Bankers’ Association chief executive Anthony Browne. “Any business which is currently facing financial distress and is seeking a suspension of payments should get in touch with their bank immediately.”

If you think you may have been a victim of this mis-selling, visit InterestRateSwapsClaim.co.uk for help in getting your compensation.