Simon Read: Changes to travel money charges can't come soon enough

 

Great news for travellers this week after the high street banks agreed to scrap excessive plastic card charges on travel money after a supercomplaint from Consumer Focus.

The climbdown followed a three-month investigation by the Office of Fair Trading into the £1bn travel money industry. Lloyds, Barclays, Natwest, Santander and the Co-operative will scrap charges of up to 2 per cent when people use debit cards to buy foreign currency in the UK.

The move could save travellers around £20m a year, reckons Consumer Focus. Other changes will see some banks printing all charges and exchange rates clearly on statements instead of burying details in the small print.

Meanwhile foreign currency businesses will be forced to make charges easier to understand so consumers will be less likely to be caught out by bogus 0 per cent commission offers. Mike O'Connor, Consumer Focus chief executive said: "Consumers should be able to buy foreign currency without being misled, confused or short-changed."

The bad news about all that? it could take a year before the changes are introduced. The OFT has given the banks a deadline of 2012 to make the changes. But I trust – given it's the season of goodwill – that Lloyds, Barclays and the others will swiftly sort out their systems so that they can start treating customers more fairly as soon as possible when it comes to travel money.

Meanwhile, there's been plenty of other good news for hard-pressed consumers this week. On Monday the Financial Services Authority announced proposed new mortgage rules which will make it harder for some people to get a mortgage in the future.

That can only be a good thing, despite alarmist headlines in some papers that a million people wouldn't now be able to get a mortgage. The simple truth is that under the new rules, as long as a borrower can demonstrate that he or she can afford to repay a mortgage, then they should be able to get one.

Those who haven't got a big enough deposit or large enough income won't be able to get a home loan. Harsh as it may seem, it's not a right to have a mortgage. FSA boss Adair Turner talked about cracking down on "irresponsible lending" but he may just as well have been talking about "irresponsible borrowing". The new rules will please lenders as they will still have enough flexibility to be able to offer a range of loans to a range of different people. But they should also please borrowers, even if they may not initially qualify for a loan. A mortgage is the biggest debt you'll ever take on in your life. It should not be easy to get.

Landbanking was also back in the news this week. This is the dodgy investment opportunity where smooth-talking salesfolk flog plots of unbuilt-on land that, they say, could be worth a fortune in the future. They may drop hints that some mega-company such as Tesco is interested in building a superstore on the site and may pay 10 times its current value.

But, invariably, there is no planned development and the plot of out-of-way land turns out to be worthless. Some crooks even sell fictitious ownership to unsuspecting investors, hooked in by the promise of quick riches.

The City watchdog has been cracking down on illegal landbankers and on Tuesday got High Court action against a number of firms – including St Clair Estates, OFG Investments, Option Land UK, and GIG Properties – which are believed to have marketed plots of land at Winkleigh Airfield, Devon.

The Financial Services Authority also grabbed £850,000 that the firms had raised from investors. There are still plenty more of these firms out there. If you think you have been contacted by a land banking operation call the FSA's consumer helpline for guidance on 0845 606 1234.

s.read@independent.co.uk

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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