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1840074 f3b40a23 Payday lenders receive few complaints despite bad press
Given the continuous dressing down payday lenders receive in the mainstream press, you’d be forgiven for thinking the short-term loan sector would attract more complaints than any other financial service; perhaps surprisingly, that assumption couldn’t be much further from the truth.

First things first: a disclaimer. This is not a post written in praise of the payday lenders. Instead, it is a factual piece based on the latest industry statistics published in the Financial Ombudsman’s annual review.

The 2013/14 annual review itself is over 170 pages long, so I’ll spare you some of the more superfluous details and direct you to a snapshot of the key facts and figures which can be found here.

Is there a payday loan witch hunt?

This is not the first time payday lenders like Wonga, currently the UK’s largest, have been on the receiving end of articles which seem wholly disproportionate to the facts, figures and context of the story.

Much of the coverage focusing on the complaints made about payday lenders, as you can see from this article, was completely devoid of any context. If we take a look at payment protection insurance mis-selling, you will see that the Financial Ombudsman received a staggering 399,939 complaints about the practice in the past year alone. That’s more than 1,000 complaints every day. Compare that to the number of complaints the ombudsman received about payday lenders over the course of the year, just 794, and you soon see why the context is so important.

Payday loan complaints in context

Further examination of the Financial Ombudsman’s annual review, which spans 1 April 2013 to 31 March 2014, provides plenty of additional insight:

  • Payment protection insurance attracted 78 percent of the total complaints received by the ombudsman over the course of the year.
  • Payday loans did not appear in the 20 most complained about financial products
  • Credit cards, mortgages, hire purchase agreements, point of sale loans, personal pension plans, buildings insurance and mortgage endowments are just a few of the financial products that attracted more complaints than payday loans.

Of course, even a single complaint is one too many, but for some media sources to run sensationalist headlines with no context whatsoever is at worse behaviour indicative of an agenda, and at best, it’s simply poor journalism.

Are payday lenders cleaning up their act?

In the face of strict new guidelines introduced by the Financial Conduct Authority (FCA), payday lenders have been left with little choice other than to clean up their act, or exit the industry. Since replacing the Office of Fair Trading (OFT) as industry regulator in April 2014, the FCA has introduced a number of tough new rules which are starting to take effect.

On 1 July this year, limits were placed on the number of times short-term lenders can roll over loans; a practice which is one of the primary causes of spiralling debt levels. There have also been restrictions placed on continuous payment authority (CPA). The new rules mean lenders are only permitted to access customers’ accounts on two occasions to claw back outstanding repayments. After that point, they can only reclaim loan repayments by contacting the customer directly.

Why are there so few payday loan complaints?

Despite the constant lambasting in the mainstream press, the payday loans sector has attracted precious few complaints; but why could that be? Perhaps the majority of the two million plus individuals who use the service provided by short-term lenders are generally happy with the level of service they receive? Alternatively, it could be that payday lenders have efficient in-house customer services teams which satisfy customer complaints before they are taken any further? More pessimistically, perhaps some payday loan customers are beyond the point where a complaint will help.

Have you ever sourced credit from a short-term lender? How did you find the service? Were all the charges made clear from the start? We’d love to hear from you on this contentious topic, so please leave your thoughts in the comments section below.

David Boyd is a financial blogger, commentator and aspiring journalist who spends his free time writing for some of the UK’s most authoritative websites.

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It’s easy to get comfortable with monthly payment plans and Direct Debits for your household bills and services. For some things, it doesn’t really matter that much, you might save a few pounds here and there, but you can play it safe with some things such as your telephone bill or contents insurance.

But there are some areas you really need to review more regularly, your energy supplier for example – there are often good deals to be had, and it is worth doing your research and comparing providers to get the best deal. Unfortunately, it is quite difficult to compare prices and deals with the big energy suppliers accurately, but it’s worth the effort when you do.

Many people have bundled packages for satellite or digital TV, phone and broadband. This is a highly competitive market and it can be difficult to find the right deal to suit your needs. With these bundled packages, be sure you have a clear understanding of the terms and charges relating to your phone, TV and broadband and compare them against buying the services you need independently.

When comparing broadband deals, it’s much, much easier. You can probably search for a great deal and have it all booked while watching you favourite TV programme.

With many of us spending more and more time at home using the internet for home shopping gaming, social media and banking, it’s vital we get value for money and the best quality broadband available.

Key considerations when selecting broadband services:

1) Always choose a reputable company, check the web for user ratings and customer feedback where possible

2) Ensure the vendor has good quality broadband available in your area, aim for a minimum speed of 5MB for good quality video streaming and download speeds.

3) Check the product information so you are clear about any product banding or pricing categories. Is there a set up and installation fee? Will you have to pay line rental or organise phone line installation?

4) If you are buying a bundle with satellite or digital TV included, make sure you ensure there are no hidden expenses for each individual item – always try and agree a fixed fee to help manage your costs

5) Be mindful of introductory deals, whilst they can be a great incentive, costs can increase considerably after the introductory period so check future costs before signing any contract.

6) Always check the terms and conditions accurately reflect the service quality you expect and that your rights are protected

7) Make sure you get a clear schedule for connection dates and make sure you know who is responsible for each item to be set up, for example, satellite installation, phone line installation, modem and wireless hub

8) If you need help setting up your broadband, ask your supplier, but it may come at an additional cost.

There are some fantastic deals around, search online and boost your roadband today.

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If you’ve just entered the adult world, you’ve probably yet to learn the wily ways of credit. Credit is a very complicated yet incredibly important concept to understand and the funny thing about it is that most places won’t give you credit unless you have credit to show (sort of a catch 22). But there are still options for those who don’t have credit, and if you use your options responsibly and show you’re a responsible borrower, you’ll find doors open pretty fast for you in the future.

  • Emergency Loan Providers – If you have no credit and find yourself in a bind, there are still options out there for you. Emergency and short-term loan providers such as Wonga.com are perfect for those who are in a tough spot financially and don’t have a whole lot of options because of their limited credit history. You can choose how long you need the money for (up to thirty days) and the amount you’re hoping to get. They process your application online and then deposit the funds in your account the following business day. If your car breaks down, your water heater goes out or some other calamity happens, at least know you’ve got options.
  • High Interest Credit Cards – Don’t assume that just because you don’t have a credit history you don’t have options when it comes to credit cards. Your options are just more limited and you’ll probably find yourself paying a higher interest rate because the company is taking more of a risk on you. Search for a card that has an introductory rate that’s low or (in a perfect world) zero, and try to find something that doesn’t charge an annual fee. Finding these things isn’t impossible but it’s much harder when you have no credit history to prove what a good customer you’ll be.
  • Unsecured Credit Cards – If you’re just searching for something to help you build your credit and not hoping to spend money right away, an unsecured credit card is a great option. Rather than giving you a loan which is essentially what a secured credit card is, you’ll place a certain amount of money in a savings account tied to your credit card. When you make purchases the funds come out of your savings account as if you were borrowing from yourself. This helps the banks see that you’re a responsible borrower and after a certain period of time (say six months or a year) you can speak to them about reevaluating your credit card and applying for something secure. If you pay off the balance each month you don’t have to worry about interest and it’s about the same as if you were spending your own money with the big exception that you’ll be earning major credit points by doing so.

There are a few other ways you can gain credit without the use of credit cards, and all of these are great ways to ensure you’re not only building a credit history but building a good one. Your credit will follow you for years so don’t hesitate to get started right away!

Gemma Davis is a freelance writer and personal finance blogger who enjoys her time clacking out posts on her noisy mechanical keyword and consuming heroic amounts of coffee.

 

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It’s Been One of Those Weeks Already

Today’s post is directly from Crystal.  icon smile Its Been One of Those Weeks Already

Yep, in the last 24 hours, I have spent more than $1500 and none of it was really planned.  This will put a slight damper on us for a few months since this of course came while our business has been slower too.  icon sad Its Been One of Those Weeks Already

Beeping, Beeping, AHHHH

We were woken up at 4am by a beeping noise Monday morning.  It ended up being the stupid fire detector that’s 20 ft in the air in our entry way.  Poop.  I called a few handymen and got quotes ranging from $100-$130.  So we drove to Lowe’s and bought a $200 multi-functional ladder that extends 18 ft.  This was a better option than my suggestion to shoot the thing (we’re Texan – that’s an option).  icon wink Its Been One of Those Weeks Already

Dental Stuff

I forgot my husband had a dental appointment for 4 fillings on Tuesday morning.  It ended up being 5 fillings and a complete cleaning and exam for $1320.  OUCH!!!  Dental insurance may or may not have covered this sort of stuff, but we skipped on it since it would have been $90 a month based on what I could find 3 years ago.  So, if it would have covered some of this, we may have been ahead by now.  But if all of his crappy teeth were considered a pre-existing condition, we would have been out the monthly premium and the $14k that we’ve put into crowns, root canals, and fillings.  My husband better treat his teeth like freaking babies from here on out or I will personally smother him in his sleep.

Things We’re Now Skipping

We enjoy vacations like cruises, Las Vegas trips, or even small weekend trips to Louisiana casinos.  We could also gamble online at places like www.888casino.com/casino-games, but now we are probably shutting down most unnecessary spending for at least the next few months.

The issues are that we already have hotel accommodations for a week long New Orleans trip in July.  We also already have booked a 7 day cruise in August with friends.  These two trips will run us about $2500 too.

Altogether, we are going to be eating way cheaper for the rest of the year to help make up for some of these expenses.  Business is slower, so we’ll probably pay less in taxes too.  But we won’t know until next April.

Any venting you need to do?

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Life insurance fraud costs international life insurance providers and estimated $68 billion dollars annually. Wow! $68B is a lot of dough – the kind of dough that makes people go crazy with desire; and commit serious crimes. Life insurance fraud cases are, as you would probably expect, at all-time highs. That means that people are comitting insurance fraud, more and more, because they feel forced to provide for their families in seemingly impossible scenarios.

They don’t want to “go out”, leaving their loved ones to struggle in the midst of an insane world – and so they try to get over on life insurance companies. It’s not the most novel idea, but it is a popular one. All the major insurers have fallen victim over the years, Allstate, GEICO,  even GIO have had to deal with these unfortunate events.

Extreme Cases of Life Insurance Fraud

Johnny works as a mortician journeyman, and he has a social issue. You see, Johnny doesn’t like playing by the rules. He likes games of  chance instead. He believes he has the “perfect crime” planned: a life insurance fraud scheme.

He knows he can do it. He has connections. He uses them to forge fake IDs, procure fictitious medical documentation and all other necessary items to fool the life insurance company out of their death benefit payouts.He loves his family and sees no other ways to make sure they are provided for after he passes. He steals a body, fakes a death, gets a doctor to sign off on medical documents and then collects life insurance benefits on someone who never really existed.

Life Insurance Fraud 2014

Modern technologies have empowered life insurance companies to detect fraud schemes easier and more effectively. DNA testing, a backlogged judicial system and $68B worth of massive inspiration to stop fraud have insurance fraud investigators hopping through their careers like bunnies; never able to completely thwart the onset.

That $68 billion is annual losses keeps those companies hiring more investigators, keeping those investigators actively investigating – and stumbling in overall inefficiency like never before. Remember: life insurance fraud is at all-time high levels.

How record high life insurance fraud affects your wallet:

Get one thing clear: life insurance companies, as well as all other types of insurance companies, do not incur long-term losses. They just don’t. They employ actuaries, some of the smartest people alive, to ensure that they do no lose money long-term. That means that every single time someone gets away with a life insurance fraud scheme, the insurance company will redefine their premium pricing schedules to absorb those losses. YOU will pay, along with the rest of everyone, for the losses life insurance companies pay out to fraud. Insurance companies do not take losses; they distribute their costs to their policyholders.

Bottom line about extreme life insurance fraud:

Extreme life insurance fraud is on the rise. Because economies are suffering while governments increase revenues, people are more and more desperate. They turn to crime, sometimes to fraud. Criminals who want to succeed get extreme, and this results in some very intricate plans to take money from life insurance companies. Even with all the investigators in place, these companies continue to lose profits because of extreme life insurance fraud.

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How To Save Money On Your Taxes

As a former accountant I can tell you the reason accountants become anti-social: they get yelled at ALOT .  Just as the employee at airline counter cannot control the weather, accountants cannot control tax law, the weather or, for the most part, the amount of time it takes to complete your taxes.

I remember my first beat-down.  I might have told the gentleman how he could save money the next year (like I’m about to tell you), but I was too busy crying under my desk.

For starters, you should know that most firms charge by the hour.  Depending on the firm, even small tasks like phone calls are billable.

They also operate on a first come, first serve basis.  So, if you bring your information in the day before April 15th, they’ll probably just do an extention for ya.

 

Here’s how you’re gonna save this year:

1. Look at your last year’s tax return to see what documents you brought last year.  If you can’t find it, or understand it, just call your firm and ask them what you need to bring.

I know you think you’ve got it covered, but you are going to forget something.  A phone call is a heck of a lot cheaper than the time it takes your accountant to sort through your documents, determine what you are missing and call you back.  That’s all billable time.

2. Make 2 copies of everything (make sure you have every page), then bring the orignals and one of the copies.  A. It’s cheaper than paying some frazzled, exhausted worker who may take a while (especially if you have a bunch of statements).  B. If an anti-social accountant calls you and accuses you of forgetting your 1099-Whatever, then you can rub it in their face.

Don’t forget to bring the originals.  Accountants can be anal-retentive and illogical.  Just appease them.

 

3. Put everything in some sort of order (maybe even highlight statement headers).  Accountants are not robots and it can be mind-numbing to go through a billion forms that all look alike – shockingly, you are not their only client.  When you take out room for errors you are likely to save yourself some cash.

 

4. When your accountant calls take GOOD notes and ask questions.  If you bring in the wrong document or you forget your checkbook you’ve made a trip for nothing.

How are you going to save on your taxes this year?

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