Julian Knight: No more banks behaving badly on card debt

You can tell the election is ahoy. Tomorrow, the Government will announce that it has come to an agreement with the banks over how consumer debt is to be handled.

It's a little like the agreement that was reached last year over the treatment of people in mortgage arrears. In short, the banks will agree to change the order repayments are allocated to credit-card debt. So, presumably, no longer will expensive cash withdrawals languish until all the cheaper debt has been paid. Also, consumers will be given the "statutory right" to reject interest-rate increases. Now, before you get excited, it will apparently only be on existing borrowings rather on debt that is accrued after the rate has been increased. The Government also promises to bring in "new regulations to stop irresponsible and unaffordable lending" as well as a "new" cooling-off period for consumers offered credit.

Much will depend on who wins the election. But if Labour does get back in and the banks stick to their commitments, which may yet turn out to be a bit wishy-washy, I welcome the idea that, finally, over order of repayments, the banks will start to act equitably. This has long been a massive money-spinner for them, and since the onset of the credit crunch they have exploited it more by changing the definitions of what qualifies as a cash transaction and so is subject to higher interest. But at this feverish political time we will just have to wait and see.

Whiter than white?

Like a washing powder brand, the Financial Services Authority is being relaunched. Outgoing chief Hector Sants was on the Today programme on Friday announcing that from now on the regulator is going to intervene before mis-selling takes place and before dodgy products come to the market, rather than wait for consumers to get ripped off and report it, sparking some never-ending consultation process.

OK, I am paraphrasing. There was little humility on Sants's part for the nine years of cock-up and cosying up to the City, for allowing financial services to run riot, lending irresponsibly. All he would say was that the FSA has raised its game – I suppose something has to justify its monumental cost.

But the past is another country and we ought to take Sants at his word, particularly as he is partly trying to underpin the morale of a failing organisation. But will the new, beefed-up, light-on-its-feet rather than light- touch FSA truly be able to take on the rotten core of financial services?

I'm talking here of intervening early with the banks. After all, it's the banks and their commission-hungry and sales-targeted staff which have been mainly responsible for mis-selling endowments, payment protection insurance, and overpriced, inflexible personal pensions. Even now, they are flogging risky "investment bonds" to people in their 70s and 80s. What Sants has set out will no doubt be the template for the FSA or its replacement (under the Tories, if they get in) post election. Does the FSA have the independence and the guts to follow through? Only an absence of mis-selling scandals will tell.

You wouldn't credit it

The closure last week of the Consumer Credit Litigation Solicitors' (CCLS) Manchester office by the Solicitors Regulation Authority should act as a massive warning to all those tempted to use no-win, no-fee law firms. The CCLS pledged to fight to get customers' credit agreements overturned, but what SRA investigators discovered was shocking: staff unpaid and thousands of client files in boxes, untouched. And, clients had been charged a handling fee of £495, refundable if the case was lost, although how it would ever get to court with files stuffed in a box is anyone's guess.

I don't have sympathy for anyone trying to get out of credit agreements via a technicality. Claims management, done well or badly, is an appalling blight on our society.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Voices
There will be a chance to bid for a rare example of the SAS Diary, collated by a former member of the regiment in the aftermath of World War II but only published – in a limited run of just 5,000 – in 2011
charity appealTime is running out to secure your favourite lot as our auction closes at 2pm tomorrow
Arts and Entertainment
Caroline Flack became the tenth winner of Strictly Come Dancing
tvReview: 'Absolutely phenomenal' Xtra Factor presenter wins Strictly Come Dancing final
Life and Style
A still from the 1939 film version of Margaret Mitchell's 'Gone with the Wind'
life
Arts and Entertainment
J Jefferson Farjeon at home in 1953
booksBooksellers say readers are turning away from modern thrillers and back to golden age of crime writing
PROMOTED VIDEO
Sport
Amir Khan is engaged in a broader battle than attempting to win a fight with Floyd Mayweather
boxing Exclusive: Amir Khan reveals plans to travel to Pakistan
News
Stacey Dooley was the only woman to be nominated in last month’s Grierson awards
mediaClare Balding and Davina McCall among those overlooked for Grierson awards
Voices
Joseph Kynaston Reeves arguing with Russell Brand outside the RBS’s London offices on Friday
voicesDJ Taylor: The great tradition of St Paul and Zola reached its nadir with a worker's rant to Russell Brand
News
Twitchers see things differently, depending on their gender
scienceNew study shows that birdwatching men have a lot in common with their feathered friends...
News
i100
News
Xander van der Burgt, at the Royal Botanic Gardens, Kew
scienceA Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
film
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

    $200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

    Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

    $125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

    Sheridan Maine: Commercial Finance Manager

    Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

    Sheridan Maine: Regulatory Reporting Accountant

    Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

    Day In a Page

    The week Hollywood got scared and had to grow up a bit

    The week Hollywood got scared and had to grow up a bit

    Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
    From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

    Panto dames: before and after

    From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
    Thirties murder mystery novel is surprise runaway Christmas hit

    Thirties murder mystery novel is surprise runaway Christmas hit

    Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
    Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

    Anne-Marie Huby: 'Charities deserve the best'

    Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
    The botanist who hunts for giant trees at Kew Gardens

    The man who hunts giants

    A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
    The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

    The 12 ways of Christmas

    We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
    Birdwatching men have a lot in common with their feathered friends, new study shows

    The male exhibits strange behaviour

    A new study shows that birdwatching men have a lot in common with their feathered friends...
    Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

    Famous diaries: Christmas week in history

    Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
    From noble to narky, the fall of the open letter

    From noble to narky, the fall of the open letter

    The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
    A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

    A Christmas ghost story by Alison Moore

    The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'
    Marian Keyes: The author on her pre-approved Christmas, true love's parking implications and living in the moment

    Marian Keyes

    The author on her pre-approved Christmas, true love's parking implications and living in the moment
    Bill Granger recipes: Our chef creates an Italian-inspired fish feast for Christmas Eve

    Bill Granger's Christmas Eve fish feast

    Bill's Italian friends introduced him to the Roman Catholic custom of a lavish fish supper on Christmas Eve. Here, he gives the tradition his own spin…
    Liverpool vs Arsenal: Brendan Rodgers is fighting for his reputation

    Rodgers fights for his reputation

    Liverpool manager tries to stay on his feet despite waves of criticism
    Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

    Amir Khan attacks the Taliban

    'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
    Michael Calvin: Sepp Blatter is my man of the year in sport. Bring on 2015, quick

    Michael Calvin's Last Word

    Sepp Blatter is my man of the year in sport. Bring on 2015, quick