A new rule announced this week in the final regulation from the Financial Services Authority (FSA) means that anyone who decides to swap ownership of their house to then rent it back have to have a guaranteed tenancy of at least five years. The new rule will begin from the 30^th of June this year, and aims to prevent consumers from being preyed on by companies who force them to leave their homes shortly after they begin a rent back scheme.

Ed Harley from the Financial Services Authority said:

?For some people in financial difficulty, staying in their home remains very important and selling their home and renting it back in this way can be right for them.

But we are aware of some firms exploiting vulnerable consumers at a difficult time. So, it is right that we introduce these further protections, and we will take swift action where they are not met.?

This is just one of the rules laid down by the scheme, however. There are a number of additional elements to the FSAs regulations, which have been in progress since September 2009. The new rules include a ban on heavy advertising and sales techniques, a two week cooling off period and a ban of leaflet dropping and cold calling.

These regulations have come as a direct result of an enquiry in 2008 that found many companies operating rent back schemes were being dishonest. Companies were buying homes at a discount and then selling them on within months, but promising the owners beforehand they would be free to stay in their homes.

The firms typically prey on people who are going to be facing repossession of their homes, but not they will fall under the regulation of the FSA, so scams and disreputable companies will hopefully be far less likely.

©2012 MoneyBlog. All Rights Reserved.

Insurance scams, online theft, tax fraud and evasion are costing the UK as much as ?30bn every single year, according to the latest official figures.

The National Fraud authority believes that the figures work out at costing around ?621 per adult in the UK. This is the first time such figures have ever been properly worked out on a national scale.

Over half (58%) of all fraud was carried out in the public sector, costing around ?17bn a year. The NFA believe these losses were paid for through the rising costs of products and services and through tax fraud.

Loses from tax fraud account for the highest overall loss at ?15.2 billion, while in the private sector the financial services industry were the biggest hit with a total of ?4.8bn in fraud ? something that the Financial Services Authority is taking very seriously, leading to an increase in the amount of brokers been fined and banned from the industry due to fraud.

It was also noted that consumers lose ?3.5bn in targeted fraud every single year, such as lottery and loan scams. 12% of all fraud victims were individual consumers.

Previous fraud estimates have always been much lower than the figures we?ve seen this week, normally floating around the ?13bn mark.

NFA Chief Executive, Bernard Herdan explained the differences in figures between this study and ones conducted previously:

?Although the figure appears on the face of it far greater than the previous estimate, we know this is because we have included many additional figures that other studies have not,

With this vital information, we can develop clearer priorities to prevent, detect and deter fraudsters. We will use the data to help identify those areas of fraud that cause the most harm to the UK economy.?

As consumers its worthwhile taking time over any deals as well as making sure relevant contact information is available before purchasing, including a full postal addresses and landline telephone number. Using a credit card on any purchase over ?100 will also provide additional protection for online purchases.

©2012 MoneyBlog. All Rights Reserved.

In a decision that?s sent ripples through the consumer finance world and marks the effective end of nearly half a decade of fighting with the banks over overdraft charges that many claimed were unfair, the Office of Fair Trading has officially given up the fight against banks, following the high court ruling that the charges lawful and that consumer would have to pay.

The bank charges debate is one that has been raging for many years and while many consumers managed to take advantage of the numerous court cases and legal battles to claim back their overdraft charges while the banks were scared to set a precedent, it seems like those days are over now and if you have any outstanding bank charges or past debt from overdraft fees – you?re stuck, at least for now.

Consumers who are in hardship are still able to direct complaints toward the Financial Ombudsman Service while the OFT have stated that their decision doesn’t rule out the ability for consumers to take direct personal legal action against the banks.

John Fingleton, Chief Executive of the OFT said:

“Having considered in detail all the options available to us in light of the judgment, we have decided not to continue what would be a narrow investigation with limited prospects of success.”

It’s unlikely that the battle between consumers and the banks is yet over, with many sites such as MoneySavingExpert pushing consumers to fight for their rights and start new legal avenues with the banks over the fees. However, the one million odd claims for overdraft fees that have been on hold for nearly a year are now all likely to be rejected unless given a chance to change their claims or are in direct hardship.

There’s still a chance for those who can prove that the bank charges caused continued hardship especially in cases where the charges were disproportionate, which is good news for those wanting to challenge the banks as individuals. For now though, the bank battle has lost the punching power of the biggest consumer groups in the country so any wide scale positive legal result seems wholly unlikely in the near future.

©2012 MoneyBlog. All Rights Reserved.

According to the United Kingdom?s Payment council, the concept of using cheques could be made completely obsolete by 2018, noting that the use of cheques was in ?long-term, terminal decline?

Cheques have been used as a form of payment for over 3 centuries, but these days many people feel that there are more efficient ways of paying for goods.? The council said it would promote different methods of payment so that the eventual withdrawal of cheques won?t leave customers without the knowledge of make different types of payments.

The body admitted that there were still plenty of situations where cheques were used, but also stated their goal of removing the need for consumers and businesses to rely on the cheque system in the future. They stated that there will be a financial review several years before the 2018 date to see if enough progress had been made to justify getting rid of the system.

Payments Council CEO Paul Smee said: “There are many more efficient ways of making payments than by paper in the 21st century, and the time is ripe for the economy as a whole to reap the benefits of its replacement.”

The cheque has been in decline since 1990 after bank transfers and debit cards become the preferred and far quicker method of paying for goods. When internet shopping and banking exploded in the late nineties and early parts of the 21^st century, the cheque suffered an even bigger hit as most people demanded fast delivery and efficient service.

Currently there are no major retail stores that accept cheques as the payment, nor do many petrol stations ? it costs a business around a pound to process a cheque so many have just given up with the system, and we doubt its lost them much business. However, pensioners and small businesses still use cheques on a regular basis.

The Federation of small businesses has spoken out against the move, with a spokesman saying:

“This will cause concerns for both a number of small businesses who do not have electronic payment systems and their customers. It is not for the council to do the bidding of the banks, which have been against keeping the cheque because of the cost incurred.”

Liberal Democrat MP Mark Hunter has also started a motion to save the cheque, which currently has over 100 signatures: ?As well as causing unnecessary disruption for many businesses, bankers would be dealing a huge blow to hundreds of thousands of people, many of them elderly, who rely on cheques for payment?

What do you think? Should Cheques be scrapped now we have much more efficient ways to pay, or should we keep them going instead of forcing the elderly to use another system?

©2012 MoneyBlog. All Rights Reserved.

We?ve all had it happen; a computer that we brought a few years back starts getting slower and slower until eventually it takes so long to load up Windows you might as just walk down to the nearest library to get online. You might expect businesses and especially the government to avoid problems like that, but they?ve actually got a very similar problem right now ? and it?s affecting their ability to police tax recovery in a number of areas.

Amazingly, problems with computers at HM Revenue and Customs not providing essential information could lead to a huge loss in tax revenue for the government. In fact, ?11.2 bn of the ?27.7 bn owed is unlikely to be collected at all ? quite a huge amount of lost revenue for a government cutting back on public spending.

A lack of funding in the tax system on behalf the government has come back to bite them and now they don?t have the facilities available to effectively collect tax.

The total tax intake in the UK was ?436 billion in the 2008/9 financial year ? a loss of ?22 billion of the previous year due to the economic climate.

Head of the Public Accounts Committee Edward Leigh said:

?HMRC’s efforts to recover debt are being hampered by its systems, which do not provide essential information such as a profile of debt across taxes. The money needed to upgrade systems would be well spent if it were outweighed by the amount of additional tax recovered.?

With new systems not being available and working until as late as April next year, there?s currently a backlog of around 17 million PAYE cases that on hold. Mr Leigh stated:

?The government will consider the committee’s conclusions and recommendations in detail and respond formally to the committee in due course?

©2012 MoneyBlog. All Rights Reserved.

The Tax relief that was given to parents receiving childcare vouchers was saved this week after Gordon Brown gave in to pressure from various Labour backbenchers to keep the relief which is worth up to £2,300 a year for 340,000 families around the UK.

The vouchers allow parents to exchange up to £243 of their income for child care vouchers that aren’t subject to either income tax or national insurance payments, a 31% tax break on the money.

Instead, the relief will be applied to those on the standard 20% income tax rate at a cost of hundreds for parents who earn more than £43,000 and are on the 40% income rate tax band.

The back down was welcomed by childcare campaigners but was countered by the conservatives who saw the U-turn as evidence that the governments childcare system was in chaos. The change to the scheme won?t actually change anything for anyone until 2011.

Brown had initially announced he was scrapping the relief to fund new nursery places and argued that the wealthiest users gained a majority of the benefit form a tax relief. However, the Prime Minister was faced by a joint letter from several prominent back benchers and a petition of 92,000 people on the Downing Street website.

After failing to maintain a stable majority in commons over the matter, Brown stated in a letter to the rebellion backbenchers:

“…We will retain tax relief for new childcare vouchers issued in the future. However, there still remains a concern that a disproportionate benefit is accruing to higher rate taxpayers. So to ensure this tax relief is given on a fairer basis to all families, we will ensure all taxpayers get the same income tax relief as basic rate taxpayers do currently.”

However, the Conservatives believe that Labour had shown that they demonstrated ?neither consistency nor honesty? on their policies toward childcare.

©2012 MoneyBlog. All Rights Reserved.