Money News: Vorderman urged to turn her back on adverts for FirstPlus

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The Independent Online

Two debt-counselling charities have lent their weight to a campaign aimed at persuading TV presenter Carol Vorderman to stop promoting loans secured on homes.

The Consumer Credit Counselling Service (CCCS) and Credit Action are supporting the drive by moneysavingexpert.com, an advice website that wants the celebrity to turn her back on high-profile adverts for FirstPlus, a subsidiary of Barclays bank.

The specialist provider lets consumers consolidate a raft of other debts into one loan "secured" against their property - unlike an unsecured personal loan.

Both charities support moneysavingexpert's view that these loans are often not the right product for many indebted consumers; that they can be expensive; and that they tie people into over-lengthy contracts.

Many consumers don't realise this, the website claims, and could benefit instead from trying for a remortgage, a credit card deal or visiting a debt-counselling service.

"Secured loans are appropriate for about 3 per cent of the over-indebted, and these adverts imply that they are appropriate for the majority," said Malcolm Hurlston, chairman of the CCCS.

Keith Tondeur, director of Credit Action, pointed out that Ms Vorderman's reputation for being good with figures suggested that secured loans offered a good solution for those with debt problems. "For most people, this is not the case."

Other celebrities who have taken part in adverts for financial companies, including June Whitfield and Carol Smillie, have been embroiled in controversy. Two years ago, AXA Sun Life was fined £500,000 for misleading adverts featuring both women.

A spokesman for FirstPlus said that customers were always made aware of the risks. "Carol gives customers the feeling that we can provide the best financial deal to restructure debts quickly, easily and responsibly. We do our best to live up to that.

A spokesman for Ms Vorderman, said she had described FirstPlus as an "excellent company".

Cash machines: New probe into charging ATMs

A six-month inquiry into cash machine charges and their impact on deprived communities has been launched.

It follows an ATM "summit" last Thursday held by Ivan Lewis, Economic Secretary to the Treasury, who asked MPs, banks, building societies, independent ATM operators and consumer groups to try to settle a dispute on the growth of charging machines.

But rather than try to thrash out points in a day-long session, Mr Lewis announced that there would be a fresh inquiry.

Last year, a separate investigation by MPs into ATMs focused on whether they gave consumers enough warning of the fees, but failed to convince the Government to introduce any major changes.

The new task force will be chaired by John McFall, chairman of the Treasury Select Committee, and examine every aspect of the debate, with a view to drawing up a series of recommendations for ministers.

Out of all the 58,000 ATMs in the UK, some 40 per cent now levy fees of up to £2. This fast rate of growth has alarmed a number of consumer groups, which argue that there is a disproportionate impact on poorer communities.

Independent ATM operators contend that they are introducing machines in convenient locations where there were none before.

All the above parties will contribute to the inquiry with research and studies to influence the outcome.

Economics: Rates held, houses rise

For the ninth month in a row, the Bank of England has left interest rates on hold at 4.5 per cent.

Few eyebrows were raised at last week's decision by the Bank's Monetary Policy Committee, after business and consumer data suggested we always want the economy on an even keel.

Meanwhile, figures from the Halifax showed house prices increasing faster than expected. The monthly rise of 2 per cent in April was the highest for two years. The figures leave annual house price inflation at 8 per cent.

Despite the buoyancy, the Halifax said it expected growth to slow later this year, with rising unemployment affecting confidence and high prices continuing to deter many first-time buyers.

Endowments: Nationwide puts time bar on claims

Nationwide is to enforce time limits on customers who want to make complaints about endowment mis-selling.

From 8 May, the building society will join a long list of endowment providers that have announced they are putting "time bar" restrictions on claims. Others include Legal & General, as from last month.

Under time-barring rules, endowment holders have three years from receiving a first "red" letter (warning that a policy runs a high risk of not paying out the target sum at the end of the term) to lodge a complaint with the provider.

Until last week, this time limit had been applied by Nationwide only to complaints about policies it had sold as a tied agent of the Guardian insurance company. And these complaints were handled by Guardian.

Now, for the first time, Nationwide will rely on time- bar dates set by insurance firms on those policies it sold as an independent financial adviser.

It will also send out fresh projection letters to customers holding policies with the Nationwide Investment Group, alerting them that a time-bar date is to be decided "in due course". This will relate only to claims made for the first time after 8 May. Any cases already being dealt with are unaffected.

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