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New Banking Rules - Helpful or not?

December 3, 2012

Late last year, The Coalition Government announced that the way people repay their debts was to be overhauled.

 

 
How do these changes help or affect you. Well I have taken a look at this and have found out the following.

Bank Overdrafts

From March this year, current account bank customers can opt to receive a text message or even an email alerting you when you are about to go into an unauthorised overdraft.

And from March next year, banks should also have to ensure that accounts have a safe buffer area, so that their customers are not penalised for going just a few pounds overdrawn into the horror red.

They should also be made aware of a grace period, allowing them time to put money back into their overdrawn account to avoid any hefty penalties. And customers will or should receive an annual statement displaying the total amount of charges they have paid to the bank. One of the reasons being is that unauthorised overdrafts are far too expensive.

Store cards

Pushy and over the top sales staff who offer a discount at the checkout if you sign up to their store card is no longer allowed, as this was changed in March this year.  And shop staff will no long receive commission for signing up customers to their store cards. Shoppers will also be unable to redeem any discount achieved until 7 days after signing up to the store ard.

Payday loans

Companies that charge interest rates equivalent to shockingly HIGH 1,000% on loans made over a few days are to have their code of practice reviewed. With the Government agreeing to work with trade and industry bodies to greaten and improve consumer protection. However, from  a personal point of view and from what I understand, these loan companies will not be forced to cap their interest rates.

Credit scoring

Consumers should be allows and able to fix errors on their credit history files as quickly as they like, and those who have not borrowed in the past should be allowed to build up their credit history. The Government will also try and ensure that consumers who shop around for the best deals will not be penalised on their credit record for doing so.


 

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