Credit cards to get their comeuppance

This issues raised by the White Paper should have been aired several years ago, with any leglislation not likely until  ‘after’ the next election.

Many would argue that it is the borrower’s own fault for getting into credit card debt, but remember over the past decade this country’s economy has been fuelled by around 1.5 trillion pounds of consumer borrowing.

Morally and socially we have been encouraged to spend and pay later through slick marketing and the easy availability of credit.  From this we have developed a culture of must have now.

We also have triggers in our life, perhaps when a relationship breaks up, with a loss of employment or with an illness and it has been all too easy to fall on the credit card back up.

That said, consumers should not feel as if they have been exploited or disadvantaged and they have a right to clear information to enable them to help them avoid that. However they also have a responsibility to manage their finances properly.

One concern is that the plans could mean that some borrowers will be forced to pay back more of their debt earlier, which they may not be able to afford.

The proposals could go further by capping interest rates on credit cards making them in line with the bank base rate; for example, the card interest rate would always be say 10% above base rate, that way the card provider is protected should interest rates go up and the consumer if they come down, a bit too simple really.

One last point, I can see credit card providers laying off staff in the future as these proposals will seriously reduce their income over the coming years and reverse their current business models! Can't say I’m sorry to see this, they had it coming. Full article here.

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Thinking of a 0% credit card balance transfer? You may think again after reading our 0% credit card balance transfers - warning

46,000 mortgage holders to receive £7.7m as FSA fines GMAC-RFC Ltd £2.7m for mis-treating borrowers

Well done FSA for working faster than normal on this with a good result for the borrower. Had GMAC-RFC not co-operated then the fine would have been considerably higher. I have looked at their website and they genuinely appear to want to redress this situation.

This could be the first time that a mortgage lender has been called in on this and there are numerous other lenders wondering when they will feature next.

Good news for the battered consumer, well done FSA.  Full article here.

FSA orders Swinton to offer refunds on over 480,000 PPI policies

PPI policies are designed to offer peace of mind to consumers that their repayments will be covered in a time of crisis, such as illness or unemployment, but they are not cheap and can add as much as £700 to a £4,700 on a three year loan.

The Competition Commission has recommended that sale of all PPI policies are to be severely restricted from October 2010. The policies can still be sold but not at the time a lender grants the loan; instead they must wait until at least seven days has lapsed.

Consumers should not be pressured or deceived into buying PPI, which has happened in thousands of cases.

Naturally it is in the lender’s interest to reject PPI claims, hoping the consumer will give up the fight therefore it is encouraging to see that the FSA has taken a hard line and named and shamed Swinton Group.

I wonder how many other firms are waiting for that knock on the door. Full article here.

Do you feel you have been mis-sold PPI and don't know where to start?

If this is the case then we have our very own easy to read questions and answersas well as Letter 1 template to request your terms and agreement and Letter 2 template to demand a refund, all free at the;

DebtWizard guide to Payment Protection Insurance (PPI).