Does it really cost £35 to send an automated letter when someone’s gone 1p over their limit’?

Over the years that’s exactly what card providers have done whenever people have missed credit card repayment dates or bust through their credit limit. And it’s for this reason that you should be able to get back the last six years’ worth of cash.

Incurring charges combined with not being able to pay off your balance is a danger signal. It means you have money management and over-indebtedness issues. While these charges are worth fighting, it’s also important to turn the spotlight on yourself.

Are you managing your money properly? Are you spending beyond your means? By far the best thing to do is to avoid them in the first place. This isn’t just to save you cash and hassle. If you’ve got fines from your credit card company each one takes a chunk out of your Credit Score. This means you need to do three important things.

Ensure you never miss a payment.

This is easy to do, simply set up a Direct Debit to pay off the card each month. You can do this for just the minimum repayment, and that way you’ll never be fined. Yet only paying the minimum will leave you in debt virtually for ever (see the Danger! Minimum Repayments article), so just consider it a way to ensure there won’t be a penalty – and continue to pay by cheque or card payment each month on top.

Cut the cost of the interest.

The more interest you pay, the less of your money goes towards paying back the actual debt; the more you’re likely to go beyond your limit. It’s easy to slash credit card interest either by shifting your debt to a new card (see Best Balance Transfers) or getting a new card for cheap spending (see Credit Card for Spending).

Sort out your finances.

It may be that your debts are simply a symptom of overspending.

There are a number of ways to combat this, by simply shifting to better value products (see Give Yourself a Payrise andBudgeting) or simply Stopping Spending). If you are getting credit card fines, this is a good way to deal with them.

ANSWER: Probably almost all of the people you know.

But how many of them also WANTED to apply for PPI, or payment protection insurance? The answer to this question is almost certainly next to none of them.

Yet, how many of them will have ended up with PPI? Yep, you’ve guessed it, most of them.

Why Do People End Up With PPI Cover?

Quite simply, because the banks and other financial institutions want them to, because it is profitable. They structure the sales process (or in some cases, used to) so that the “Financial Adviser” is paid more if they have sold the PPI to the customer.

Variations on this may include the sales person, sorry, erm, “Financial Adviser”, having to hit a target of sales before receiving any commissions, which could form a substantial part of his or her income. Weekly targets put the employee under constant pressure to keep selling what are, or were, effectively unwanted financial products to customers, or at the very least, mainly mis-sold financial products. This type of practice has been known to go so far that it was not uncommon even for bank counter staff to ask customers if they were interested in opening more accounts, or to apply for credit cards, or to take out PPI and a host of other very profitable (for the lender) financial products. Many employees who have had to do this found it somewhat demotivating, especially when they did not in the first instance apply for a job that involved selling. Incidentally, could this have had an effect on the current banking crisis where many of the people who work in and also run Britain’s banks do not now have a banking qualification – would you want to train as a banker just so you could sell?

What Benefit Do People Get Who Have Ended Up With PPI?

Another good question. How many people who take out PPI actually go through the process of making a claim i.e. if they ever experience loss of earnings and are then unable to meet the loan repayments? Probably about the same number as those who wanted to take PPI out in the first place, i.e. not very many.

How many of the people who do make a claim, actually manage to make a SUCCESSFUL CLAIM? Well, let’s just say that the numbers do not reflect favourably on the financial services industry.

So How Do People End Up With PPI Cover?

There are many techniques that were used to encourage borrowers to unwittingly inflict even greater financial hardship upon themselves. These were in many cases unfair and form the basis for claiming back your PPI payments, and possibly also the commission paid to the salesperson, from the lender. In short they were mis-sold.

How Do I Know If I Can Claim Back PPI Payments?

You can download a FREE checklist from ppi-ppi.co.uk to see if you are eligible to reclaim your premiums, which the majority of PPI policyholders are. Some of the more common failings include: you were not employed by another person or organization at the time, being pressured into the PPI, having to take out the PPI at the same time as the loan; being told the PPI increased your chances of getting the loan, not being given a choice to look elsewhere for PPI cover; being told it was compulsory; paying upfront; increasing your loan and PPI was raised too.

You can claim back 6 years of PPI.

1. Check the mis-selling checklist here to see if you have a reason. You will probably have many!

2. Write to your lender with a cheque for £10.00 to request your account details if you don’t have statements going back 6 years.  See sample here.

3. Work out from the information how much PPI you have paid each month. Add 6% interest and write asking for this amount and stating the reasons why from the checklist.

Be persistant and go to the Financial Services Ombudsman after 40 days.

If you don’t have the time employ a PPI reclaim company. Be prepared to pay up to 25% of the refund as a fee. No upfront fees should be charged.

name and

address of bank

your name

address

date

Account Number

Dear Sir or Madam,

RE:-  Subject Access Request

I am writing to request that you forward me a copy of all data held by your organisation about me for both current and closed credit card accounts. This should include, but not be limited to all transaction lists, agreements, notes made on my account and copies of letters relating to my account.

This request should include any data held for more than 6 years as under the Data Protection Act there is no time limit for information requested.  If you do not hold data for a period longer than 6 years I also request confirmation of this in writing along with your methods used for disposal of such information to comply with the Data Protection Act stating the name and contact information of your registered Data Controller and Code Compliance Officer.

I look forward to your response within 40 days, as you are obliged to reply within this time under the Data Protection Act.

I enclose the statutory maximum fee of £10.

I wish to request a full refund of these charges.

Yours faithfully,

signature

insert your name (printed)

If you answer YES to any of the questions below, there is a good chance that you were mis-sold your PPI policy. N.B. If you have, or have had, more than one PPI policy in the last 10 years, even if the finance that was covered has now been repaid, you should ask yourself the questions below for EACH and every PPI policy you have had.

1. Were you self-employed or not working at the time you signed up for the PPI cover?

YES ____ NO _____

2. Were you pressured into signing up for the PPI?

YES ____ NO _____

3. Were you told you had to take out the PPI at the same time as the loan?

YES ____ NO _____

4. Were you (or would you become during the course of the policy) the wrong age specified for PPI?

YES ____ NO _____

5. Were you told the PPI increased your chances of getting the loan?

YES ____ NO _____

6. Did they omit to tell you that you had a choice to look elsewhere for PPI cover?

YES ____ NO _____

7. Were you told or given the impression that the PPI cover was compulsory?

YES ____ NO _____

8. Did you have to pay upfront for the PPI but were not told that policies are available where you could pay monthly?

YES ____ NO _____

9. Did you ever increase your loan and find that your PPI premium was raised too without your consent?

YES ____ NO _____

10. Did they fail to ask if you had other insurance that would cover the loan? (It doesn’t matter if you didn’t have this, what matters is that they asked if you did. For instance, you may have had a separate loss of income protection policy through an insurer)

YES ____ NO _____

11. Did they omit to tell you there were some exclusions that might affect your eligibility to make a claim?

YES ____ NO _____

12. Did you pay an upfront premium, repay the loan early but then still not receive a refund?

YES ____ NO _____

13. Did they fail to fully explain the terms and conditions to you?

YES ____ NO _____

14. Did you ever experience a loss of income and then try to make a claim on ANY of your PPI policies?

YES ____ NO _____

If, yes, was it successful?

YES ____ NO _____

If no, why not? ___________________________

Have you taken out a Car Loans, Home improvement loans, Secured Loans and even personal Loans. It doesn’t mattet if the loan is current or previously redeemed.

If you have already tried to claim and been refused by your lender it doesn’t matter. You will be taken much more seriously if you use a professional service.

It doesn’t matter if you win or lose (which is unlikely). You pay no fees to make a claim. Research now shows that up to 90% of policies sold in the UK are useless. Many people when trying to claim on their PPI are told that they are not eligible to make a claim on these policies.

It is estimated that over 20 million people in the UK have been mis-sold a payment protection policy, some might not know they even have one. Recent changes in the consumer credit act has forced companies to issue at the very least, annual financial statements. If you have never recei ved a financial statement from your lender then chances are you have no idea how much you actually owe.

The sale of Single Premium Payment Protection Policies, insurance to your loan in one lump sum, has recently been BANNED at the point of taking out the loan. If you have one of these policies then chances are it was mis -sold and you are paying for something in which you will never likely be able to make a claim on.

Mis-selling checklist

1. Were you told the policy was compulsory?
2. You were told the insurance was essential for you to get the loan
3. Where you asked if you had another policy or insurance in place that would cover you?
4. The terms & conditions of the loan insurance policy were not fully explained to you.
5. You felt under pressure to take out the loan insurance
6. Where you informed that alternative and cheaper insurance products were available to you?
7. Did the adviser tell you about any significant exclusions under the policy – for example, the exclusion that says you won’t be covered for any pre-existing medical condition?
8. If you took out a loan or finance agreement, did the adviser make it clear that you would have to pay for the insurance up front in one single payment?
9. If you had to pay for the PPI as a single payment, did the adviser make it clear that the insurance cost would be added to the loan and you would be paying interest on it?
10. Single premium PPI insurance normally lasts for 5 years. If your loan or finance agreement was for longer than this, did the adviser make it clear that the insurance would run out before you had finished paying for your loan or finance agreement? The adviser should also have told you that you would continue to pay interest on the insurance premium, even after the insurance expired.
11. You were under 18 or over 65
12. You worked less than 16 hours a week
13. You were employed on a temporary or contract basis or were aware you may become unemployed
14. You suffered from stress, backache or had a pre-existing illness or injury
15. You were not told about the true cost of the insurance, (or not told you were buying it at all).
16. You were not asked about any other insurances you had
17. You were not told that the same policy could potentially be bought elsewhere cheaper.
18. You paid for loan insurance upfront and it was not refunded to you when you paid back your loan early.

If any of the above apply to you why not claim back your ppi premiums now? You could receive thousands of pounds back.

If you still need PPI you can shop around and buy it cheaper elsewhere ……………..and read the small print and exclusions first!

Step 1 – Admit that you are facing problems in
managing your finances.The first step towards debt
free life is to come to terms with the fact that your
debts have become unmanageable. Leaving bills unpaid
and ignoring the problem does nothing to wipe off your
existing debts. It only makes the situation worse.
However the fact that you’re reading this article means
you have accepted that you are in debt and you are ready
to take the next step.

Step 2 – Take an honest look at your present financial
situation. Make a list of your debts. Next to the listed
debts include the name of the creditor,the total amount
you owe, the rate of interest you are being charged and
the monthly payment you make towards this debt, if any.
It will not only give you a clear picture of your
financial standing but will also help you in choosing
an appropriate debt solution.

Step 3 – Prioritize!
Decide which bills to pay first and which ones can wait.
Concentrate on paying off the debts that have a higher
interest rate. You will save more money in the long run
by ridding yourself of these expensive loans first while
keeping up the required repayments on the others.When
making the repayment remember to pay a little more than
the minimum as minimum debt repayments only covers the
added interest. It makes no impact on the capital amount.

Step 4 – Create a realistic monthly budget for your
outgoings. List all the essential expenses and
non essential expenditures.
The non essential expenditures can be completely
cut or lowered substantially until you become
debt-free. Evaluate your monthly balance by
subtracting monthly expenses from your monthly income.
This will tell you how much money you have at the
end of the month so that you can start paying off
your debts. Do not forget to keep some money aside
for unexpected expenses. As your debt goes down,
you will see a fall in your interest charges.

Step 5 – Refuse to take on any kind of new debt.
As you already in are in debt, adding
on a new debt will increase your debt and
will hinder your progress towards being debt free.
You must decide once and for all that you will
not add any new debt and stick to it!

Step 6 – If you are not able to manage your debts on
your own then you can opt for professional credit
counseling. You will be guided by financial experts
who will help you in taking a step nearer to a
debt free life. There are options you can take such
as taking out and IVA or even opting for Bancrupcy.
Recently there are companies who offer to write off
your credit cards legally.

The Guardian, Saturday 28 January 2006
Article history by Rupert Jones

A “vulnerable” man earning £150 a week managed to rack up debts of more than £100,000 across nine personal loans in what his brother claims is the latest example of irresponsible bank lending.

The 50-year-old warehouseman has a poor understanding of financial matters and had no hope of ever repaying the loans, according to his older brother, Colin Griffiths.

Following Colin’s intervention, and the involvement of Guardian Money, all five lenders have now decided to write off the loans. One of them, Sainsbury’s Bank, says the loan application should not have been approved and steps have been taken to ensure this does not happen again. But others, such as Barclays Bank, say they lent the money based on inaccurate information provided by Douglas Griffiths about his income and outgoings.

The case coincides with a new study highlighting serious failures in banks’ lending practices. uSwitch.com, the online and phone-based comparison service that helps customers find a better deal, claims almost nine out of 10 credit card borrowers were issued cards without the lender checking that they could afford to repay the debt.

Late last summer, Colin discovered that Douglas, who lives in north London, had taken out a string of unsecured loans that he could not afford to repay. In all, he had borrowed around £70,000 between July 2002 and May 2005, saying that he needed the money for home improvements. This total is made up of:

· At least two loans – £7,000 and £15,000 – from Barclaycard. It appears the £15,000 loan was taken out to repay the £7,000 one, plus provide extra cash. Monthly repayment: £407.56.

· Two loans – £25,000 and £500 – from Barclays Bank. Monthly repayment (on the £25,000 loan): £481.48.

· Two loans – £7,000 and £12,000 – from Halifax. It appears the £12,000 loan was taken out to repay the £7,000 one, plus provide extra cash. Monthly repayment: £221.66.

· £7,500 from Sainsbury’s Bank. Monthly repayment: £191.81.

· £5,000 from Liverpool Victoria. Monthly repayment: £117.97.

· £5,000 from Tesco Personal Finance. Monthly repayment: £74.92.

With many of the lenders selling him payment protection insurance too, the total debt soared well over £100,000.

However, as many of the lenders pointed out, Douglas did not help his case by telling them he earned £400 a week. In fact, his take-home pay was £125 a week at the time and is now £150-£160.

Colin acknowledges his brother is at fault but says he is the victim of irresponsible lending because he was a vulnerable man who did not understand the implications. Furthermore, he says the lenders failed to verify his brother’s affairs to properly assess whether he was able to meet the repayments.

Colin is particularly critical of Barclays because Douglas has his current account with the bank, and therefore it would have been easy to see he could not afford more than £800 a month in loan repayments to the Barclays group.

“My older brother and I have done our best to look after him. It should be the institutions’ responsibility to protect people like Douglas as well, and they haven’t,” says Colin, 62, who lives near Milton Keynes. On being told that the lenders had agreed to wipe the debts, his reaction was: “What a relief!”

Douglas Griffiths says he accepts he lacks knowledge when it comes to financial matters and has found the whole experience distressing.

After Colin took up cudgels on behalf of his brother, and then Guardian Money got involved, things started to move fairly quickly. Sainsbury’s Bank – in a letter signed by Justin King, the boss of the supermarket group – moved swiftly to rectify the matter. It said the loan application was “processed incorrectly and therefore should not have been approved”, and added that the loan had been cancelled and wiped from Douglas’s credit file.

Tesco Personal Finance says it has written off the outstanding balance, adding that, as a responsible lender, “we take the circumstances of Mr Griffiths’ case very seriously”.

Liverpool Victoria says it has also decided to write off the debt on a goodwill basis, though adds: “Our staff followed absolutely the correct procedures.” It says it had no reason to ask for written proof of income because credit searches did not turn up anything untoward, and that it acted responsibly because it declined a request by Douglas to top up his £5,000 loan.

Meanwhile, the Halifax says it suspended the loan some weeks ago, which means no interest is accruing, and adds: “We will write this amount off.”

Barclays says it is committed to responsible lending, but this is dependent on the customer providing accurate information. “Having reviewed the sales of the loans to Mr Griffiths, Barclays found that Mr Griffiths overstated his income, underestimated his expenditure and understated the level of his existing debts. Had we been in full possession of the true facts, this would no doubt have affected our decision to lend,” says a spokesman.

He adds that Mr Griffiths appeared “confident and self-assured” during the application process, but says: “We are taking steps to write off the debts.”

Store Cards are treated much the same as credit cards and all of the same principles apply. They are a credit card issued on behalf of a store and usually administered by a major credit card lender or bank.

Once you have your agreement checked and it is found to be in breach of the 1974 Consumer Credit Act you can claim to have the balance written off.

It is the finance company’s responsibility to you, the consumer, to ensure that all aspects, all terms and each section of the agreement fulfilled the required terms and conditions of the 1974 Consumer Credit Act. If they failed in this duty to you then your car finance agreement may be unenforceable. When a motor finance claim is successful you will receive a cheque for the full amount of compensation awarded. Compensation is due to potential contract irregularities within any past or present motor finance agreements.

When you signed your car finance agreement it was the lender, not you, who produced the contract that was to be used. In most circumstances you would have had no choice over the terms within the agreement.

If you have a car with an outstanding finance agreement you may be able to claim to have the remaining balance written off. If a car finance agreement is unenforceable the lender may be forced to write off the debt with the possibility of you keeping the car. When you arrange car finance the agreement, contract and/or terms and conditions relating to the finance need to comply with all the relevant rules, laws and regulations. Even if you have ‘paid off’ your car finance in full, you may still be able to claim compensation.