Scotland’s new national consumer advice service has launched a campaign to inform Scots of their rights if borrowing from a payday loan company this Christmas.
The consumeradvice.scot service, run by the charity Advice Direct Scotland and funded by the Scottish Government, has also published tips on budgeting to help people avoid borrowing cash at exorbitant rates.
The advice includes highlighting the role of credit unions and the importance of checking the APR percentage figure, not the monthly repayment level.
Consumeradvice.scot was launched in April this year following the devolution of powers to the Scottish Parliament, and provides free, impartial and practical advice on any consumer-related issue.
Colin Mathieson, knowledge coordinator with consumeradvice.scot said:
“Christmas is just around the corner, and with that, many of us are tempted – or forced – to overspend and overstretch our finances. “With parties, dinners and gifts to pay for, we may wake up on the other side of New Year with a nasty financial hangover. “Banks often have strict guidelines on who can borrow, taking into account their ability to repay, so the alternative for many is to reach out to easier-to-obtain payday loans, with higher rates of interest, resulting in a much larger long-term repayment. “This can cause those already in debt to become even deeper embroiled in the cycle of further high interest, borrowing to meet loan repayments, and other monthly commitments. “But it’s important that consumers know their rights and many customers and former borrowers of payday loans do have the ability to claim back the exorbitant interest that they have lost. “And by following our tips on budget management, people across Scotland can avoid resorting to payday loan lenders.”
The Financial Conduct Authority has a ‘good practice customer charter’ which sets out rules that payday loan companies must follow.
It states that payday loan companies are responsible for ensuring that the affordability of any loan is assessed, including any potential customer’s financial situation and personal circumstances.
When a customer is unable to realistically pay back the loan at the time it is taken out, then the company should refuse the application.
The rules are established so that lenders should also inform applicants that this method of high-interest borrowing is not intended as a long-term financial solution, and that customers should not be entering into an agreement for such a payday loan if they are experiencing financial difficulties.
By writing to the lender, advising them of the facts and outlining what the customer would like the payday lender to do about this, they may be able to get interest on existing loans frozen, or alternatively, be able to repay the balances over a longer period of time.
In this situation, the lender is required to respond within five days of receipt of the letter, acknowledging the complaint and advising what the next steps in the process will be.
If a further response is not received within eight weeks, then a complaint can be made to the Financial Ombudsman Service, advising that a satisfactory response has not been received from the payday lender within the outlined timescales.
Plan meals and save pounds – By
planning meals in advance and writing a shopping list before going to the
supermarket, you can avoid waste and the purchase of unnecessary items.
Credit unions care – A loan
from a credit union can be much cheaper in the long-run than a payday
loan. Save to borrow and borrow locally.
Compare prices and shop around
– The increasing cost of living is one of the biggest costs that
encourages people to take out payday loans. Shop around for things like
energy costs and mobile phone contracts and remember to switch to better
deals when they become available.
Remember it’s the APR % that
stings and not the monthly payment – Higher rates of interest (APR %) can
be what cost more in the long run. Remember to compare interest rates as opposed
to the monthly repayment amounts.
Sleep on a purchase – Remember
that impulse buys and items that are unnecessary can seem less appealing
in the morning. Consider expensive purchases for longer and ask yourself
if you really need them.
Callum, 26, from Glasgow, contacted consumeradvice.scot about his experiences with payday lenders after being refused a personal loan and credit card with his bank due to not meeting the affordability criteria set out in the application process.
“My wages have always been lower than my friends. They can go away for weekends and holidays without as much thought about the costs involved. For me, having to save for these luxuries, whilst paying my monthly bills means making a lot of sacrifices and living cheaper.
“I’d paid the flights and accommodation off by saving, but the spending money was a struggle for me…Ibiza isn’t a cheap place to go to and I borrowed £800 for the week. It was all very well and good at the time of the holiday, but the following month the realisation hit me that the monthly repayments were so expensive, almost £270 per month, and in the long-term, paying back almost double what I had borrowed when paying this over six months.”
Callum had to take out another three payday loans to make the monthly commitments and quickly found himself digging deeper into debt. It was only by understanding his rights as a consumer and understanding that the payday loan company should not have originally authorised his loan that he was able to take back control. He used the process outlined by consumeradvice.scot to regain control of his finances, allowing him to clear loan balances over a longer period of time.
Consumer advisors can provide practical and impartial advice on how to resolve consumer problems, inform people of consumer laws which may apply to their situation, provide template letters which consumers can use to contact the trader or service provider they are having issues with, and pass relevant information onto Trading Standards for further investigation. They cannot make a complaint on an individual’s behalf or carry out any legal action on an individual’s behalf.
Scots have been issued with advice on how to safely enjoy this year’s Bonfire Night.
The country’s new national consumer advice service has published advice around fireworks sales, the impact on pets, and how to stay safe.
Last month, a Scottish Government consultation found that 94 per cent of people want more controls over the sale of fireworks and 87 per cent would welcome a ban on the sale of fireworks to the public in Scotland.
Sainsbury’s has announced a ban on the sale of fireworks and other retailers are selling low-noise fireworks.
Advice from consumeradvice.scot on fireworks and bonfires:
The law: The Fireworks Regulations 2004 requires a retailer to display a sign where fireworks are supplied or exposed for supply, stating that it is illegal to a) sell adult fireworks or sparklers to anyone under 18; b) for anyone under 18 to possess adult fireworks. Anyone with concerns about illegal fireworks can contact consumeradvice.scot for free, impartial and practical advice.
Animals: Keep animals indoors, in the quietest part of the property. Pets should not be left alone for long periods of time, especially on the louder nights, and owners are advised to act as calmly as possible with pets, rewarding calm behaviour, using the sounds of TV or radio as background noise and comfort.
Safety: • Always try to attend an officially organised display – be aware of surroundings if setting a bonfire at home If a bonfire must be set at home, ensure this is kept well away from buildings, vehicles, trees, hedges, fences, power lines, telecommunications equipment and sheds. Bonfires should not impact upon visibility on roads or otherwise inconvenience vehicles.
• Be conscious of your own and neighbour’s wellbeing (including any animals) Ensure that smoke / flying embers from the fire do not cause a nuisance to neighbours’ person or property. Remember that certain materials can cause the emission of harmful smoke and combustion. Pressurised containers and sealed vessels amongst bonfire material pose a risk of explosion – be aware. Ensure pets are kept indoors and in as quiet a place as possible.
• Alcohol and fire don’t mix Don’t go near fireworks or bonfires when under the influence of alcohol. Ignoring local by-laws and drinking in public places is still illegal. Police may issue fixed penalty tickets or send a report in relation to this to the Procurator Fiscal.
• Don’t throw fireworks onto the bonfire and avoid use of flammable liquids to ignite bonfires. Use proprietary firelighters and avoid flammable liquids
• Never leave a burning / smouldering bonfire unsupervised and never leave children unsupervised. Make sure that bonfires are completely extinguished and not left unattended. Keep children safe by ensuring they are kept away from bonfires and at a safe distance from fireworks.
Lorna Yelland, team leader with consumeradvice.scot, said: “This Bonfire Night, the best advice is to enjoy it safely. “When buying fireworks, the law is clear – it is illegal to sell adult fireworks to children or for anyone under 18 to possess adult fireworks. “This can be a stressful time for pets, and we would advise owners to keep animals in the quietest part of the property and act as calmly as possible if fireworks are going off outside. “It is vital to stay safe, and the best advice is to try to attend an officially organised display. If you are building a bonfire at home or setting off fireworks, be aware of surroundings, be conscious of your neighbours and pets, never leave children unsupervised, and remember that alcohol and fireworks don’t mix. “Anyone with any consumer-related queries can contact the national consumer advice service, consumeradvice.scot, for free, impartial and practical advice.”
consumeradvice.scot is the country’s new national consumer advice service, and was launched in April this year with Scottish Government funding following the devolution of further powers to Holyrood. It provides free and impartial advice to people on any consumer issues.
Experts advise people of their legal rights, and can also refer complaints to Trading Standards Scotland for investigation, but cannot carry out legal action on a consumer’s behalf.
The service is operated by the charity Advice Direct Scotland.
A new international taskforce is to be created with the support of the UK Government to engage the Islamic finance industry with the UN’s Sustainable Development Goals.
The high-level Islamic Finance and Sustainable Development Goals (SGDs) taskforce will be anchored in London and run by the Glasgow-based Islamic Finance Council UK (UKIFC).
Economic Secretary to the Treasury John Glen said the new initiative will ‘drive forward innovation around the world’.
The UK Government will be the founding country partner when it begins in 2020, with an aim to promote understanding and encourage adoption of the UN SDGs amongst Islamic financial institutions.
Gatehouse Bank has confirmed participation and interest has already been expressed from Malaysia and Dubai, as well as other UK organisations.
The UN’s SDGs are the blueprint to achieve a better and more sustainable future for all, addressing issues such as climate change, education and equality.
But a recent analysis from UKIFC and Malaysia-based ISRA found a considerable lack of knowledge, misunderstandings and minimal engagement by Islamic financial institutions with the SDGs.
Islamic finance is one of the fastest growing sectors in the global financial industry, with assets expected to reach US $3.8 trillion in 2022.
Innovative financial structuring in the sector can help create instruments that drive capital towards the SDGs.
The UK – and London in particular – has already become a centre for Islamic finance, helping finance developments such as The Shard and the Olympic Village.
In 2014, the UK Government cemented the UK’s position as a hub for Islamic finance by becoming the first western country to issue sovereign Sukuk – Islamic bonds.
With the City’s strength in conventional financial services, the strong legal framework and progressive outlook it continues to intellectually innovative and assist developments in the global Islamic finance arena.
The UKIFC was established in 2005 as a specialist advisory and developmental body focused on promoting and enhancing the global Islamic and ethical finance industry. It was the first global specialist Islamic finance body to sign up to the UN Principles of Responsible Banking (PRB).
With Gatehouse Bank the only fully Shariah-compliant signatory, the UK is leading the way in relation to the Islamic finance sector’s engagement with the global framework that aligns with the SDGs.
In 2016, the Church of Scotland and the UKIFC signed a partnership agreement to co-develop an ethical finance solution open to all society, regardless of race, religion or ethnic background and based on the shared values between the faith traditions.
The UKIFC supported this month’s Ethical Finance 2019 global summit in Edinburgh, which brought together over 400 senior representatives from more than 200 companies and organisation.
The Economic Secretary to the Treasury, John Glen MP, said: “The UK is a world leader in Islamic Finance, so I am pleased we’re now a founding country partner and observer member of the new Islamic Finance SDG Taskforce. “This Taskforce will bring together the global Islamic finance community so it can help us meet our international, environmental and sustainability objectives – using UK expertise in sustainable finance to drive forward innovation around the world.”
Richard de Belder, Advisory Board Member of the Islamic Finance Council UK, said: “Delivering the UN’s Sustainable Development Goals will require private sector involvement. “But business-as-usual in the global financial arena will not deliver the 2030 goals. “A step-change in private investment in SDGs is required, and Islamic finance, as one of the fastest growing sectors in the global financial industry, provides a unique opportunity for innovative solutions. “We need a fairer system of financial management that delivers more than just profit and the inherent principles within Islamic finance are naturally aligned to the sustainability agenda. “This new taskforce will explore ways to bring people and institutions together to help achieve the UN SDGs.”
Charles Haresnape, CEO, Gatehouse Bank, said: “We welcome the opportunity to support and participate in the Islamic Finance and Sustainable Development Goals Taskforce. “Our Shariah-compliant finance principles mean that our products and services are ethical by design and as a founding signatory of the UN’s Principles for Responsible Banking, Gatehouse Bank has committed to strategically aligning its business with the UN’s Sustainable Development Goals. “We are confident that the taskforce will play a significant role in identifying innovative solutions for sustainable finance in the future.”
The Islamic Finance Council UK (UKIFC) is a specialist, not-for-profit, advisory and developmental body focused on promoting and enhancing the global Islamic and ethical finance industry. It has helped six countries develop enabling regulatory frameworks for Islamic finance, enhancing financial inclusion to over 15 million people, established the award-winning Ethical Finance Round Table series running since 2010, launched the world’s first joint venture between Islamic finance and the Church of Scotland, and delivered development sessions to over 500 Islamic scholars across the globe.
The framework of an Islamic financial system is based on elements of Sharia (the law of Islam) which governs Islamic societies. The fundamental concept of Islamic finance is that money has no intrinsic value and should only be used as a measure of worth.
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