Are Packaged Bank Accounts Set To Be The Next PPI or Personal Injury Niche for Compensation Claims?

This blog post is an addition to the previous one that I posted about packaged bank accounts being the next hot topic and includes some more up to date information and thoughts on the subject.

Over the last decade there have been two industries that have consistently been the ones which claims management companies and solicitors have focussed a lot of effort into; PPI (payment protection insurance) and personal injury. The PPI sector has been interesting because it has seen a huge marketing push from claims management companies where they have encouraged UK consumers to make repayment compensation claims on financial packages which were apparently miss-old to them by high street banks. In fact, a thriving cottage industry has popped up around these kind of compensation claims with millions of people in the UK managing to get money bank from their bank.

Could Be a New Industry of Claims Coming

Now I think that there’s a new industry set to break here, and that’s the potential mis-selling of packaged bank accounts. The reason I say this is because I have recently seen targeted Facebook adverts appear offering people help with making claims, as well as new websites popping up to capitalise on what is currently a topic a little bit under the radar.

Whilst the banks are hoping that this won’t happen, with websites such as The Money Saving Expert highlighting the issue, it won’t be long I think before we see a deluge of TV ads, SMS messages, and other adverts pushed at the general public, encouraging them to make a reclaim.   But what exactly has happened, and what does this mean?

Martin Lewis of the Money Saving Expert Website Has Had His Say

martin-lewisAccording to Martin Lewis of The Money Saving Expert website, he says that if a person was (or is) paying their bank a monthly fee on their bank account, then it might just be possible for them to reclaim packaged bank account fees up into potentially the thousands of pounds bracket. He says this, and backs it up with examples, because there are signs that bank were mis-selling packaged accounts with ridiculous and worthless add-ons that their customers didn’t actually need. This included items such as travel and car insurance, which in the event of you needing it, would be impossible to actually make a claim on.

Have You Been a Victim of Packaged Accounts?

Here’s an abridged version of Martin’s checklist for consumers to check against to see if they have been the victim of mis-sold packaged bank accounts. Have a read through it and see if you think you have been affected, because if you have then you might be liable to make reclaims on your packaged accounts via a broker such as Kangaroodle (specialist in mis-sold packaged bank accounts). If you answer yes to any of these statements below then you could be in line for some money back.

  • You were told that you had to have a packaged bank account in order to qualify for a mortgage acceptance offer.
  • You were told that you were too old for standard insurance packages.
  • You were mis-led into signing up for the packaged bank account and were told that you had to have it by the bank employee.
  • Your bank put the prices up on your packaged bank account without informing you.
  • You tried to end the contractual agreement on the account but were unable to.
  • Your bank did not tell you that you had to register your car or phone with them in order to use the packaged account insurance.
  • You were told that you would see an improvement in your credit score if you signed-up for a packaged bank account.

As you can see there are quite a wide range of qualifiers in there so potentially this could be a massive hit to the banking industry just like the PPI mis-selling scandal was – you can read more about the consequences of that here – it actually affected the UK economy.

More Media Coverage

There was even a recent episode of Watchdog on the BBC TV Channel where the host introduced a new item on the mis-selling of packaged bank accounts followed by a full seven minute report on what they described as a “scandal” – thankfully some bright spark recorded and uploaded the full TV segment from this onto the BBC video channel so you can view that below.

My Conclusion on Packaged Bank Account Reclaims

So in my view I think that there’s a big issue on the horizon for UK banks. All of them have been in the industry of flogging packaged bank accounts and there’s no doubt that most of them probably used the same techniques for sales and sign-ups that have been detailed in the Money Saving Expert checklist that I referenced.

If you have been mis-sold a packaged bank account, or even think you might have, I would get in there early and speak to a claims management company before they get over-whelmed with potentially hundreds of thousands of claimant. My experience tells me that the early birds will typically set the precedent and usually get higher pay outs too at the beginning of any trends like this.

My Personal Review of the Wall Street Journal Weekend Edition

I love the Wall Street Journal – it’s far and away my preferred financial newspaper choice.  They have recently launched a Weekend Edition.  Here is my short review of what you can expect after reading for a couple of weeks.

Taking your mind off of money matters for a change is what the Wall Street Journal Weekend Edition is all about, introduced recently with a re-vamp, the weekend magazine edition delves on culture-based topics. The first time this segment was introduced it was actually for free but it soon became a hit and so to match the public’s demand Dow Jones had to make it a paid subscription; it includes a variety of very interesting topics that will entertain people and get their minds off of serious business stuff.

Wall Street Journal

The Wall Street Journal also includes a Weekend Edition.

The Content is Easy to Read… and Entertaining!

Having the option to have the weekend subscription delivered to your home does make  big difference and this is how the Wall Street Journal Weekend Edition became an instant hit. Most of the content in it is informal and has a friendly tone; you’ll know what I’m talking about when you get to see the layout and design of the magazine for yourself. The topics being discussed in the Wall Street Journal Weekedn Edition include:

  • Real estate
  • Culture and cooking
  • Shopping
  • Travel
  • Fashion
  • Lifestyle
  • Entertainment
  • Music and Movie Reviews
  • Literature
  • Health matters
  • Technology News
  • Sports

Make sure that you subscribe to the Wall Street Journal Weekend Edition Only so that you won’t miss out on any discounts and special offers that will help you save some money. For me the best subscription is the printed combo edition, where you’ll get an online copy emailed to you each week as well as the paper copy delivered at your home – this subscription will also reduce your yearly rate.

Majority of Readers of the Weekend Edition are Women

It also became an instant hit among women because they find a lot of things that interest them, for instance the cooking, fashion and decorating topics are just among the few that they like best. You can get the Wall Street Journal Weekend Edition in three different subscriptions; 1-the digital plus subscription, 2-the print and digital, and 3-the print only subscription. No matter what subscription type you’ll choose all subscribers will get 52 copies of the WSJ Weekend Edition per year. You’ll also have the opportunity to choose between a quarterly or yearly subscription, although it would be more preferable if you opted for the yearly subscription as you’ll be saving more with it.

Subscription Options of the WSJ Weekend Edition

Among the advantages that you will enjoy if you get a yearly subscription includes total price discounts, on-time delivery of the magazine without any interruption, get free 4 weeks subscription as a company courtesy from Dow Jones, and most of all have a relaxing weekend while reading the WSJ Weekend Edition. Primary payment methods are Visa, Master Card and American Express but you can also pay via other means. You’ll also have the ability to renew or unsubscribe from the Wall Street Journal Weekend Edition anytime online. A service-plus gets you a personalized customer care representative to assist you in whatever inquiries you may have about the magazine.

My Conclusion

I find the Wall Street Journal Weekend Edition entertaining and dealing with a lot of more culture-based subjects and is the right kind of item to read during the weekends. I definitely recommend this magazine to anyone who wants to get their minds off of serious stuff while enjoying their weekends. The authors and columnists remain true to their views and always provide unbiased content even for an informal kind of magazine.

Why a Bridging Loan Could Cost You Your Home

Bridging Loan News

Copyright https://www.flickr.com/photos/lendingmemo

I am always keen to keep a close eye on the latest financial news and developments coming out of the UK, and one topic that has had a lot of coverage in recent years has been bridging loans; also known as a swing loan or caveat loan for my American readers.  The reason that bridge loan applications have gone up in their public awareness is because there is an increasing demand for short-term financing due to the various negative aspects of the credit crunch that you will be all too aware of.

I read a recent news article in the Guardian newspaper’s Money Section that was written about the perils of taking out a bridge loan for UK homeowners (and commercial property owners).  Whilst the author accepted that the mortgage industry was still in a recovery period due to the recession, he did highlight bridging loans as a “boom industry”.

He went on to say how the applications going into lenders for a bridge loan was seeing a huge spike.  This is down to the fact that borrowers need immediate cash and finance in order to “bridge” any temporary shortfall in money when purchasing a new house or flat.

How Bridging Finance Works

A bridge loan will typically be applied for when a property buyer want to buy their next place, but are still awaiting for a completion on sale of their existing house.  You can understand why people want to do this considering how aggressive the property market can be – they have a desire to ensure that their purchase doesn’t fall through and so will look at a bridging loan as the ideal way in which to prevent that happening.

There are other circumstances too in which a bridging loan is secured.  For example if a borrower is unable to get a typical mortgage for whatever reason (mostly when the property needs a huge amount of work to make it liveable).  The type of buyers usually involved in this activity are commercial property landlords who buy houses for very low prices at auction and require quick and fast finance loans in order to complete the deals.

So with this increasing demand for this type of finance, there has been an emergence of these lenders.  However, the Council of Mortgage Lenders had this to say:

“Bridging loans are clearly not the solution to the scenarios they are being sold for.  They should only really be used on a small amount of very unique financial problems.”

Council of Mortgage LendersThis statement is backed up by various financial experts and analysts who believe that unless a borrower of a bridging loan has a clearly defined way in which to exit from the loan agreement then they could be taking huge risks.

This is particularly relevant if the purchase of the new property falls through, or if the sale of the owners initial home falls through – as the borrower will be left with a large bridging finance agreement, with high interest rates, and no way with which to pay it back quickly before the large repayments kick-in.

Despite this, bridging loans continue to grow in popularity.  The Council of Mortgage Lenders recently published a set of the top loan lenders including bridging finance specialists – and bridging loan companies featured quite heavily in that list.

The latest forecasts state that bridging loan lenders will be arranging over a billion pounds (GPB) of finance by 2014 – with current market values just below that.

Common Questions About Bridging Loans

So with that in mind, what is the true cost of a bridging loan and what are the other common questions people want to know the answers to?  Here are my top FAQs on bridging loans to give you the bigger picture.

  1. A bridging loan will run from anything to 24 hours through to 12 months or more.  It really depends on the lender, but in most cases the finance agreement is for a couple of months at most.
  2. Bridging loans will cost more than high street bank loans and mortgages to arrange.  However, with the increase in demand and competition the costs have started to reduce over the last financial year.
  3. Monthly interest rates on bridging loans will range between three quarters of a percent up to one and a half.  It is possible to negotiate on interest rates with the lenders though, much more than you would on a classic bank loan.

Let’s look at a real world example of how much a bridging loan would cost.  Let’s say you borrow £300,000 at the interest rate is set to 0.9% (a typical rate) then your monthly repayments will be set at £2,700 a month.  Now that’s going to be the same as paying more than ten percent on an annual interest rate – which as you should know is far more expensive than a mortgage that you would get from a typical lending institution such as Halifax or Lloyds.

Calculations

There are also other costs (I don’t want to call them “hidden” because they are clearly stated) which come in the form of fees to set up the bridging loan.  These fees will shock you as they can be in excess of a couple of thousand pounds in some cases.  Having said that, you might want to negotiate on a larger bridging loan interest rate if that means reduced fees… it’s all about your strategic approach to borrowing money.

Bridging loans are regulated by the FSA, but only when applied to first charge loans.  Some bridging loans will need to enter the “second charge phase”- these are not covered by the Financial Services Authority unfortunately which is where some borrowers can fall foul of the agreement.  To be safe, I would always recommend that you choose a bridging loan lender that is fully regulated.  The link that I referred you to earlier will help with that if you need to check up on any company’s credentials in this field.

With nearly fifty bridging loan companies now active in the UK market you will have a lot of choice available to you.  Your high street bank might offer bridging finance, but it tends to be more of a specialist area so this is rarer than being the norm.

My Personal Conclusion & Opinion (with a Warning!)

To conclude, yes a bridging loan can be a great financial product in particular property purchase scenarios.  However, you can become saddled with unmanageable debt if anything goes wrong and the sale falls through.  You could be left with a large loan with large interest rates so in my view a bridging loan is only for the strong of mind who have a definite back-up plan.  Otherwise you might lose your home… just please bear that in mind.

How Mis-Sold Packaged Bank Accounts Became the Next Hot Topic

With my background in personal injury law, and now working in banking, I always find it quite interesting to see which particular finance and law niches are next on the radar for compensation.  Everyone knows about the “ambulance chasers” that work in personal injury encouraging people to claim compensation, and then more recently there were the payment protection insurance avalanche or claims (also known as PPI).  So what’s going to be next?  Well, I reckon we should be looking towards the mis-selling of packaged bank accounts by the high street banks (which I kind of like because it takes the focus off investment bankers for a change!)

What This Means for the Banks

So what does this mean for the banking industry?  Well in simple terms, it’s now becoming apparent that sales managers at banks actively encouraged their staff to sell add-ons for bank accounts that either were not needed or were worthless.  The practice has now become known as mis-sold packaged bank accounts, with thousands of people potentially eligible to make packaged bank account claims for money owing to them.

How Does it Work?

In terms of how it works, a glut of claims management companies have now popped offering to take a reclaim job on for members of the public and to fight for compensation for them.  With things such as mis-sold packaged bank accounts I think that this is actually a good shout, because the process of dealing with banks and bankers in particular can be very frustrating. Trust me, I am one, so I know how hard it can be to get any money back – blood from a stone springs to mind – here’s an example of a website for mis-sold packaged bank accounts and reclaims.

Kangaroodle Website

Example of a website for packaged accounts reclaims.

Packaged Accounts Companies for Reclaims

I am also seeing loads of adverts now appearing on Facebook from companies trying to look like a bank to encourage a click into the whole packaged bank account claims process.  This is a bit cheeky to be honest, and I personally would not go with a company that does this.  What they do is place a sponsored advert into your Facebook feeds that looks like it’s from Lloyds or Barclays bank for example.  It says something like “click here to reclaim money from your packaged bank account”.  What you are then prompted to do is enter in your personal details – but from that point onwards you will in their database and will probably be inundated with emails, phones, text messages all from them and their partners to see if they can reclaims packaged bank account charges for you.

My preferred and recommended approach is that you find a reputable claims management company or alternatively try to do it yourself; but only if you have the patience and time.

How Did It Get Into the News?

So how did this become such a hot topic over the last few months in the United Kingdom?  Well I can track it back to a televised report on a popular consumer program on the BBC.  There was also coverage in newspapers such as the Guardian and Daily Mail which meant the public’s exposure to the idea of being able to make packaged account claims suddenly grew more than ten-fold.  I can’t imagine that the banks were very happy about this and probably spat their morning coffee out when they saw the fall-out on social media, television, and the in news – that same website also has a calculator so people can see how much they are owed.

With PPI in particular, high street banks had to set up entire new departments just to process claims… and I wouldn’t be surprised if some of them have to do this now just to handle the influx of people reclaiming money for packaged bank accounts.

To conclude, if you think that you might have been mis-sold on your account terms, they crack on and see if you can get any money back.  It could be worth thousands to you.

Life as a Personal Injury Solicitor: What You Can Expect From This Career

Before I qualified as an investment banker, I had a brief sojourn into working in law.  It didn’t really work out so I changed careers – here’s my advice if you are thinking about this type of career.

If you are in the process of deciding what course of Law you should take once your graduate and qualify, then let me give you a bit of an insight into what life is like as a personal injury solicitor or lawyer.  Essentially your role is to fight for the rights of your client if they have been involved in an accident.  Whilst being a personal injury solicitor might not be as glamorous as a big city London lawyer, dealing in commercial law, there is still a very good living to be made from personal injury.  You can really make a huge difference to the lives of the people that you deal with and represent which is what it’s all about right?  Without the help and assistance of personal injury solicitors, there would be so many people who have been hurt or injured, who don’t have the financial means or know how in which to redress the damages that have incurred.

The Core Basics of Personal Injury

The core basis of personal injury law cases boils down to getting to the bottom of where the liability lies and what the cost of an accident should be.  For example, is it a public liability case, or employer liability – both can be very different, with varied outcomes.  This was brought further into the public eye when the House of Lords debated on the interpretation of how personal injury cases were worked on and categorized.

Understand the Law and Recent Legislation

If you work as a personal injury solicitor then things like this can be key to winning a successful case or not.  You will need to fully understand all of the regulations and how they work, or you really will stand no chance of having a high win to loss ratio for your personal injury cases.  Clients will probably be varied – you could be working with an individual one day, and a large corporation or trade union the next – it really is very interesting and varied work and is something that I personally love doing.

Working With Real People With Real Problems

Having said that, the work of a personal injury solicitor, especially one in the no win and no fee field can sometimes be a very sad one.  You do meet people who really are at their lowest ebb due to the circumstances around their accident and the effect that it’s had on their working and personal lives.  If you do manage to win their personal injury case, to see how this positively impacts them and the happiness and relief it can bring is immeasurable – it makes it fun to be a lawyer those days and very rewarding – unlike other aspects to law when you don’t always get to see the benefits of your work up close.

The Working Culture of Personal Injury Law

In terms of working culture, your day can be long – it’s no easy ride being a personal injury solicitor I can assure you.  Due to the relatively low level of compensation awarded in UK personal injury cases, in can sometimes seem like a lot of work for very little reward.  You will probably be working alone for most of the time too, as personal injury cases, especially those which go to court, will often not involve any client or colleague attendance… that just seems to be the way that it is these days.  You will spend most of your day in an office, reliant on the telephone and your computer.

The Law is Always Evolving and Changing

Having said that, personal injury law is constantly evolving and changing, usually for the better, which means you need to keep up to date with the latest developments in the law.  You must always be totally confident in what you are doing, because your client’s financial and family life can depend on your success and any judgements that are given.  You literally have people’s lives in your hands so need to be both reputable, knowledgeable, and completely on the ball 100% of the time.

My Conclusion as a Solicitor 

To conclude, I would always recommend the legal law students look into the area of personal injury as their career choice.  It can be very rewarding, and you are typically dealing with normal people or the man on the street.  It’s certainly kept me sane in all of the years that I have been a fully qualified and practicing personal injury solicitor.