Money News: Call for borrower protection from £57m 'unexpected' costs
Sunday 05 March 2006
A change in the law is needed to protect UK consumers from credit card cheques that cost up to £57m in unforeseen charges, says the Office of Fair Trading (OFT).
The cheques, often sent unsolicited by lenders, allow users to pay for goods or services and rack up the debt on their associated credit card account.
However, the extra costs of using these cheques are "unexpected" for many consumers because of lack of clarity over the charges, the OFT said.
Downsides to the cheques include higher rates of interest than a credit card; a 2 per cent fee per cheque; and no interest-free period from the day of the purchase (unlike those cards that give customers up to 56 days to clear debt interest-free).
Consumers who make purchases with the cheques also miss out on the usual protection against faulty or undelivered goods afforded by credit cards under Section 75 of the Consumer Credit Act.
The lack of information about these important costs and limitations was "unacceptable", the OFT stressed.
It recommended legislation to ensure that these details are made clear and transparent, and that lenders all present them in the same format.
The call came as part of its response to a consultation on credit card cheques ordered in November last year by the Department of Trade and Industry (DTI).
Consumer groups including Which? want lenders' mailshots of unsolicited credit card cheques to be banned.
The DTI consultation closed two weeks ago but no date has been fixed for a decision.
Fuel bills: Powergen's rates up by a quarter
Fuel bills for nearly nine million Powergen customers are to rise by up to 24 per cent, it emerged last week.
From 10 March, electricity bills will go up by 18.4 per cent and gas by 24.4 per cent, the company announced.
Like British Gas, Scottish Power and other suppliers before it, Powergen blamed the huge rises on the surging cost of wholesale gas, which has nearly doubled since January 2005.
Two weeks ago, British Gas and EDF Energy announced they were to hike bills for customers; with the former, it was by 22 per cent for both gas and electricity.
Powergen's price increases will add £122 to the average customer's annual gas bill and £92 to electricity bills, according to research from the online price-comparison service SimplySwitch.com.
"Customers, especially those on low incomes, will feel the pinch," says SimplySwitch's Karen Darby.
"However, there are still some extremely competitive capped-price deals on offer, so it's definitely worth checking to see if switching can help."
Energywatch, the consumer fuel watchdog, recently warned of "almost unbearable pressure" in the fight against "fuel poverty" - where at least 10 per cent of a household's income is eaten up by energy bills.
New bank branches: Halifax in current account chase
The Halifax will open 50 new branches in south-east England in an attempt to take a bigger slice of the current account market.
Its move runs counter to the trend for cheaper telephone and internet banking, and is based on its own research showing that a convenient branch location is "especially important" for current account customers.
Although the accounts aren't particularly profitable in themselves, they are seen as a way to cross-sell other, more lucrative products such as mortgages, personal loans and insurance.
To this end, each new Halifax branch will include mortgage and investment advisers who can sell complex, long-term savings products more easily in person than over the telephone or online.
The expansion, to cost £100m, will also include the relocation of an existing 50 branches to bigger premises in the same towns.
Although a comprehensive list of new bank locations has yet to be drawn up, it will include beefing up the presence in Norwich and two new branches in London's Square Mile.
The Halifax, which already has some 1,000 branches and estate agencies across the UK, is largely focused on the north of England and the Midlands.
New helpline: Impartial advice if you're deep in debt
A pilot telephone helpline offering free advice for consumers struggling with debt has been launched.
The free service, backed by the Government and consumer groups such as Citizens Advice, aims to prevent consumers from unnecessarily paying for advice from debt-management companies, which charge for helping to restructure debts.
"People struggling to pay off debt need access to clear, impartial advice," said Gerry Sutcliffe, the minister for consumer affairs. "Research has shown that many people do not know where to go when they need help."
The service will act as a beacon to attract attention before directing callers elsewhere - to a Citizens Advice bureau for face-to-face advice, say, or to the Consumer Credit Counselling Service for phone help.
Callers to the 0800 980 2800 number will be asked a few questions about their debts and income before being offered advice about where to go next.
Although using a national phone number, the pilot is taking place in Gloucestershire and Yorkshire. If successful, it will be rolled out across England and Wales.
- 1 The BBC has just done more to eradicate ‘terrorism’ than all our wars since 9/11
- 2 Dog thinks owner is drowning in lake, dives in and tries to pull him out
- 4 Chilling drone footage captures Auschwitz ahead of 70th anniversary of liberation
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
Islamic history is full of free thinkers - but recent attempts to suppress critical thought are verging on the absurd
30,000 reasons why the rhetoric on immigrants claiming benefits can stop now
iJobs Money & Business
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...
Day In a Page
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village