Simon Read: Don't forget the victims of the plastic revolution

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The Independent Online

A report from the Payments Council this week revealed that plastic cards are rapidly taking over from cash and cheques as people's preferred way to pay. Personally I'm all in favour of the greater convenience plastic offers. In fact I can't wait until I have a contactless card which will allow me to simply wave my plastic over a reader, as Transport for London's Oyster cards already do so.

I'm also looking forward to the day when I won't need to carry around heavy pocketfuls of change. And, as for cheques, I can't recall having to write one for years, so won't mourn them. But as much as I embrace progress, I can't forget the many who aren't in a position to do so.

There are more than a million people in the UK who still do not have a bank account and few of them actually choose to live outside the normal payment system of direct debits, standing orders and online payments. It's not a lifestyle choice for most, it's forced on them because of their low income or poor credit history. Or it's simply the fact that they're living hand-to-mouth getting cash-in-hand for work that almost immediately has to be spent to feed the meter or pay other bills.

The more payment by plastic becomes the norm, the more the financially disadvantaged will suffer. It already costs them more than most people to pay bills, as they are penalised because they can't pay by direct debit. As Jonathan Welfare, chief executive of the poverty charity Elizabeth Finn Care, points out: "If you don't have a card it is increasingly difficult to make everyday payments. If you want to pay a utility bill or a fine you have to trek to the nearest Post Office, which thanks to the recent closures are now few and far between, meaning long journeys to do what would be a simple task if armed with a debit card.

"The banks claim that a debit card without an overdraft is classified the same as an account with borrowing facilities, which is ridiculous. These people are being left behind in a society where cash is no longer king."

It's a point that our political parties should ponder as they approach election day. Financial exclusion is a major problem and the parties all have plans to help the less well off get parity. In March's Budget Labour announced plans to give basic banking to all, while the Tories and LibDems have both echoed calls for a universal bank.

It's such issues that are crucial to next month's election, which is why this week (opposite) we've looked at some of the other key personal finance commitments published in the main parties' manifestos.

*Massive cock-ups with this year's tax codes have left hundreds of thousands of people potentially paying more tax than they need to. Some people have been sent a number of different coding notices from HM Revenue and Customs while others have had no coding notices at all. But as April pay slips arrive, so people may be discovering that they have been sent a different code number than the revenue sent to their employer or pension provider.

So it's wise to check any coding notices you have received. If you don't understand them or think they might be wrong, contact the Revenue at once. Use the number quoted on your coding notice or call 0845 3000 627. But be prepared for a wait.

The tax charities dealing with low income people have reported frequent examples of excessive waiting times on the HMRC helplines, together with calls just being cut off. The Low Incomes Tax Reform Group says it is taking up the issue with the tax authorities, but has no confidence of resolving thigs soon. Any why should it? The Revenue's handling of its own mess has been far from inspiring to date and there seems little to suggest that things will improve any day soon.

If you can't get through on the phone, write to HMRC complaining that you have been unable to get through to sort out your coding problem. If you head the letter "COMPLAINT" it might mean it gets looked at more quickly. Even if you do eventually sort out the problem, you should still complain about poor service and ask for reimbursement of your exceptional costs and/or a consolatory payment if you have been subject to stress and worry.

The Revenue is very quick to slap charges on anyone it thinks is failing to meet their tax liabilities so it should, in turn, be prepared to pay out compensation to people it has disadvantaged or worried because of HMRC's own mistakes. Will compensation be paid out as fast as fines are clawed in? I doubt it.

Clouding the right to pay-outs

The Icelandic ash cloud that grounded planes across the UK may have left travellers out of pocket, as well as without a flight. While they should have been offered a refund or a flight on a later date, airlines don't have to offer compensation for the delay, no matter how much it may cost people to rearrange hotels, taxis or other travel plans.

The problem is that airlines – and insurance companies – can wriggle out of payment because of a so-called Act of God clause. European law says delayed passengers are entitled to compensation, except in "extraordinary circumstances". The dangerous ash cloud could clearly not have been anticipated or prevented and so will give the airlines a get-out clause. But insurers, too, may fall back on the clause to refuse to pay out compensation.

Steve Williams, head of travel insurance at Confused.com, says: "The situation is incredibly rare and insurance providers will treat the occurrence in different ways. It is unfortunate that there is not one standard approach when an Act of God happens."

It's not just unfortunate – it's simply not acceptable. The insurance industry needs to ensure that there are standard conditions across policies that are easy to understand. The fact that it may be a lottery whether people qualify for payouts depending on the small print in their policies is just not good enough.

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