‘Keep your cards safe over Christmas’

November 26, 2009 at 10:10 am

With more of us than ever before choosing to avoid the crowds and do our Christmas shopping online, what can we do to make sure that we are not likely to fall victim to online card fraud? The good news is that, after the success of last year’s Be Card Smart Online campaign, the UK Cards Association is rolling out its initiative once again.

MasterCard SecureCode and Verified by Visa are both systems which help protect our cards when shopping online. This time last year 25 million cards had been registered and this number has more than doubled in the last 12 months with over 53 million cards now registered.

Last year’s initiative was launched in the wake of alarming fraud figures being published, revealing that 54% of all card fraud happened when the card holder was not present. The good news is that there has recently been a downturn in online card fraud for the first time ever.

Detailed advice is given on the Be Card Smart website but in a nutshell consumers should:

  • Make sure their PC is well protected – think about firewalls, anti-virus software and download security updates without delay.
  • Look for the padlock symbol when shopping online – this shows that a website is secure and that all sensitive information will be encrypted.
  • Register their cards with MasterCard SecureCode or Verified by Visa – this gives an extra layer of security and is quick and easy to do.
  • Log out after shopping – this is particularly important if using a public computer.

Finally remember that if an offer looks too good to be true it probably is!

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‘Tougher mortgage rules to be introduced’

November 20, 2009 at 4:31 pm

The FSA (Financial Services Authority) has introduced tough new proposals regarding mortgage lending which aim to stop mortgages being handed out to those most at risk of failing to make repayments.

Once the proposals have been passed, self-certification loans will be banned so borrowers will have to prove their income. In the past these have allowed about a million people to get mortgages without proving their incomes, and have made it easier for people who cannot afford them to get a mortgage anyway.

It will also introduce ‘affordability tests’, which are designed to look into the spending habits of borrowers to see if they can afford the mortgage repayments. These will look into their bills and debts as well as such factors as alcohol spending and how many holidays they take, in order to work out their disposable income.

The FSA wants lenders to stop handing out loans to high risk customers, such as people with poor credit records. It also wants to see a move away from the concept of renting being bad and a waste of money.

Borrowers failing to pay back their mortgages has been one of the main problems of the recent recession, so this should be welcome news. The FSA has said that in 2007 about half of all new mortgages were provided without income checks, and it now wants to put the responsibility on the lenders to stop handing out risky loans.

The managing director of supervision at the FSA, Jon Pain, said that “we need to act now to address the issues we have identified”.

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‘Banks to make current account charges clearer’

November 5, 2009 at 1:32 pm

The Office of Fair Trading (OFT) has reached an agreement with UK banks to make charges made on personal current accounts more transparent.

The agreement comes after the latest study by the OFT into the current account market. Three main areas of customer concerns were identified:-

  • The cost of current account charges is not made clear
  • The difficulty of switching accounts between banks
  • The way banks charge for unauthorised accounts

The banks will now provide an annual summary of the costs for each account. Charges will be shown prominently on bank statements and average credit and debit balances will be provided. The OFT thinks that the changes will make comparison of bank charges easier and will encourage customers to shop around in a similar way to getting insurance quotes.

The OFT and the banks have worked with the payments processor Bacs (originally the Bankers’ Automated Clearing Services) to smooth the transition of Direct Debit payments for customers who switch accounts between banks.

The chief executive of the Office of Fair Trading, John Fingleton, said that the changes would give consumers more confidence in getting better value from switching banks. Also it will make it easier to keep track of the costs of the current accounts. He said: “Banks will need to offer more competitive and innovative products and services to attract as well as retain customers.”

The agreement has been welcomed by the consumer organisation Which? whose chief executive, Peter Vicary-Smith, said that the changes were a step in the right direction and hoped that customers would feel more assured about switching accounts. This would empower customers to “ditch those banks that offer bad value and poor customer service.”

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