Abacus Daily Debt News

Consumers in Wales could be at the greatest risk of debt problems caused by credit card fraud, as research has shown Cardiff is the UK’s ‘hotspot’ for the offence.

Insurance company CPP revealed that more than a third of card holders in the city have been a victim at some point, with the Welsh capital overtaking London for the first time.

Overall, card fraud was found to have risen by six per cent over the course of the last two years.

And CPP’s Sarah Blaney noted that more people are being affected as "increasingly sophisticated methods" are adopted by fraudsters.

"We urge all card holders to be vigilant and take steps to protect themselves to avoid falling victim to card criminals," she said.

Debt problems may have been caused by a recent internet scam, with the Daily Mail noting last week that an online network selling bank and credit card account details generated £100 million.

By Andy Mackay

Those facing debt problems may be adding to their money worries by paying above the odds for mobile phone usage.

According to moneysupermarket.com, the average Briton is wasting £250 worth of text messages and calls year, with 27 hours of free minutes going unused.

The price comparison site suggested that consumers could save money by switching to a cheaper tariff that caters for their needs, rather than paying too much for unnecessarily high allowances.

With the mobile industry thought to be earning £13 billion annually off the practice, manager of mobiles and broadband at moneysupermarket.com Mike Wilson stated: "It’s great that consumers are under their monthly allowance to avoid any extra costs, but it’s also important to get the most out of your contract for what you pay each month."

The site recently offered advice on credit cards to those struggling with debt, recommending that those considering switching to a cheaper provider check their credit rating first.

More people may soon be faced with increasing debt problems, as a new report to be released this week is expected to reveal that the unemployment rate in the UK is climbing.

Labour market figures to be published on Wednesday (January 20th) should show that joblessness has reached eight per cent, with the number of Britons out of work in November 2009 being 2.5 million, the Daily Mail reports.

This is an increase of 500,000 in 12 months and Commerzbank economist Peter Dixon noted that it is possible this trend could continue in 2010.

And the executive chairman of consultancy Begbies Traynor Ric Traynor corroborated this view.

"There is every reason to suggest that the insolvency peaks of this recession remain some way off," he said, noting that interest and tax rates are sure to increase.

Meanwhile, a recent study by RSM Tenon predicted that bankruptcy levels could reach 18,000 in the north-west in 2010, with such instances rising by eight per cent in Manchester and 13 per cent in Liverpool, The Business Desk reported.

By Sarah Adie

The use of loan sharks by some of the country’s poorest households to pay for Christmas will see £82 million worth of debt incurred this year, a study conducted by the Financial Inclusion Centre has found.

Commissioned by affordable housing service Circle Anglia, the research revealed that over the festive season, an approximate total of £29 million in doorstep loans was taken out, averaging almost £300 per house, the Times reports.

And the number of people using loan sharks has increased from 165,000 a year to 200,000 a year in 2009 and Andy Doylend of Circle Anglia described these statistics as "very concerning".

"We hope that by turning the spotlight on loan shark activity, we can help more people to seek help and get sound financial advice," he said, noting that opting for community finance or a credit union for borrowing needs could have saved £500 in debt payments.

Meanwhile, Frances Walker of the Consumer Credit Counselling Service recently stated that doorstep loans are necessary for some people who have less money or poorer credit scores.

By Sarah Adie

Borrowers in the UK have been advised to consider shopping around for the various deals and products being presented by banks during January, as some are holding sales similar to those found on the high street at this time.

According to banking specialist with Defaqto David Black, retaining a sense of loyalty to financial institutions at the start of the year may not be a good idea, particularly for those with good credit scores or savings that can be invested.

"You’re much better off not being loyal to anyone because of all the introductory offers around," he said, adding that although HSBC is being the most prolific, with a 2.29 per cent discount on mortgage loans available, it is not necessarily the best.

"It doesn’t mean you can’t get it better elsewhere," Mr Black continued.

Those looking to take out credit cards may like to opt for American Express, he said, as its Platinum Cashback option comes with five per cent cashback up to £100 for the first three months.

By Sarah Adie

Those considering taking out a loan may benefit from asking themselves if the reason for this is a necessity.

This is the opinion of Jed Anderson of the Merritt Herald, who said that these applications should be made only in emergencies, or in circumstances that would yield "higher economic return", such as a mortgage.

"A small loan can snowball into a crushing debt that can create a prison out of our lives," he remarked, adding that student loans are also "a risky endeavour".

Mr Anderson noted that young people lack the ability to ascertain whether asking for a loan is prudent, stating that a lot of graduates often find themselves on low incomes and can struggle to repay large debts at the start of their working lives.

His comments follow a recent survey conducted by Sainsbury’s Finance, which found that debt worries may not be curbing spending, with the amount of money withdrawn from cash machines in December reaching an estimated record amount of £10.6 billion.

By Sarah Adie

UK adults are turning away from organised fitness in order to save money and perhaps steer clear of falling into debt.

According to a new survey conducted by moneysupermarket.com, 46 per cent of respondents believe the gym to be an unnecessary cost, while one-tenth state they often do not go and plan to cancel their subscriptions.

Head of protection with the website Emma Walker said: "With gym membership costing as much as £500 a year, people are reviewing their disposable income and deciding they simply cannot afford the costs."

Commenting on the fact that approximately five per cent of those with memberships cannot keep up the payments, Ms Walker reminded people that joining a leisure centre can be a huge commitment financially.

This follows a study carried out by Gfk, which found that money attitudes in the UK have changed because of the recession, with 44 per cent spending less on going out and 38 per cent cutting back on holidays.

By Sarah Adie

Those with mortgages may face debt management problems despite the base rate freeze by the Bank of England as a number of lenders have increased standard variable rates (SVRs).

This means that homeowners are now faced with costs of up to £1,400 extra each year, the Daily Mail reports, citing research from Moneyfacts that revealed that eight financial institutions have driven their SVRs up.

Darren Cook of the company noted that as some have taken this action, it is likely that others will do the same.

"The momentum to increase SVRs appears to be gathering pace," he was quoted as saying.

And the news source observed that approximately 5.5 million people in the UK have a mortgage either on or linked to SVRs, a number that has climbed in recent years as it can be the cheapest option.

In related news, Hannah-Mercedes Skenfield of moneysupermarket.com recently noted that the rise being seen in first-time buyer mortgages was "encouraging" and could lead to a strong improvement in the market if it continues.

By Sarah Adie

Indebted Britons may find that the government’s newly launched boiler scrappage scheme could help them save money on bills, cutting tariffs from between £200 and £235 every year.

Under the initiative, heating systems will be upgraded, with some 125,000 households currently in possession of operational G-rated boilers able to apply for vouchers entitling them to £400 off the modernised A-rated appliance.

Other alternatives include a heat pump or a biomass boiler and energy and climate change secretary Ed Miliband noted that the move will help educate people about energy use, "leading to permanently reduced fuel bills".

And Roger Webb of the Heating and Hot Water Industry Council said that the project is "good on many levels".

"Householders are naturally reluctant to replace a working boiler even though it is wasteful on energy," he continued, adding that bringing in incentives is essential.

In addition, uSwitch.com’s Tom Lyon welcomed the news, although he advised consumers to ensure they shop around to find the most competitively-priced products.

By Sarah Adie

Many people view the month of January as the time when they need to reassess their finances and come up with solutions for their debt problems.

At least this is the suggestion of Beccy Boden-Wilks of National Debtline, who told the Daily Mail the month will be a busy one for her charity and that it could set new records for the number of people ringing up to ask for advice.

Calls for debt help were at an all-time high throughout 2009, with 40,000 enquiries in January alone - double the number in 2008.

And Ms Boden-Wilks indicated that the trend could continue this year.

"Both January and February 2010 could be new records," she commented. "We’re advising people with concerns about coping with their debts to get in touch early and seek help."

As well as looking for debt advice, the new year could also see people saving more. Figures from NS&I show 27 per cent of the British population anticipate that they will put a greater amount of money away over the next 12 months than they did in 2009.

By Chris Trimble