Money roundup: MPs warn on pension scams and watchdog slams payday lenders

The Independent's Personal Finance Editor Simon Read talks over the latest Money news

The Financial Conduct Authority took the unprecedented step of making Wonga cancel the outstanding debt of 330,000 borrowers and scrap the fees and charges of 45,000 more (Dan Kitwood/Getty Images)

This week: MPs warn on pension scams; councils get tough on council tax arrears; and watchdog slams payday lenders.

MPs warn on pension scams

Senior MPs are warning that consumers will face rip-off scams when the new pension freedoms come into force next month. A report, published today by the Work and Pensions Select Committee, says that “savers will be required to make decisions regarding their retirement savings which they may not feel equipped to take”.

The committee is calling for a single pensions regulator to be set up to help combat fraud and mis-selling after people are allowed to take their cash out of their pension pots from 6 April.

“Savers need to be properly protected from being ripped off in frauds or scams, or from making the wrong decision,” said Dame Anne Begg, chair of the committee.

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Councils get tough on council tax arrears

Councils have been accused of turning to bailiffs and the courts rather than helping people in council tax arrears.

StepChange Debt Charity research suggests councils are more likely to engage in aggressive enforcement action rather than offer affordable payment options to struggling tenants.

The number of people contacting the charity with council tax arrears has increased 372 per cent in the last five years and over the same period the average amount owed has risen £157, he said.

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Watchdog slams payday lenders

The City Watchdog this morning accused payday lenders of unfair practices, particularly when dealing with people in debt.

The Financial Conduct Authority’s thematic review marking a year of its regulation of the high-cost credit sector revealed “unacceptable practices from many lenders, including failures to recognise customers in financial difficulty, failure to direct people to free debt advice and firms offering inflexible repayment options”.

The FCA found serious non-compliance and unfair practices in all firms that it reviewed, leading to poor outcomes for many customers and in some cases, serious detriment and financial loss.

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