Recent figures suggest that people in the UK are being forced to turn to payday loans and credit cards such as Vanquis in an attempt to keep themselves above water. This results in crippling interest rates that families will struggle to pay back. Credit firm Provident Financial receives 2,700 applications per day for its Vanquis card, according to the Mail Online.

The Telegraph recently revealed that one in five Britons have three or more credit cards, with 17% using one of their cards at least once a day. A quarter of the UK’s 30 million credit cards saw an increase in interest rate over the last year, with credit card debts of £2,000 now taking two years to clear if you pay back £100 a month.

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Mortgage approvals rose to their highest level since March 2008 in September, the Bank of England has reported.

The number of mortgages approved for houses purchased rose by 3,000 in September to 56,000.
Non-mortgage borrowing by individuals shrank for the third consecutive month, representing the most sustained fall since records began in 1993.

Figures released by HM Revenue & Customs show a rise in house sales to 82,000 in September, double that of January.

“Lending activity has recovered in recent months, when compared to the start of the year, as buyers and sellers tentatively return to the market,” said Adrian Coles, of the Building Societies Association (BSA).

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The government has put forward a series of proposals to outlaw unfair credit card terms. These include stopping card firms raising interest rates on existing debts, and increasing someone’s spending limit without first asking their permission.

Under the proposals, credit card companies would also have to ensure that a customer’s most expensive debt is paid off first, and the size of minimum repayments would be raised in order that debts be paid off faster.

The UK Cards Association (UKCA), which represents British card issuers, said it would study the proposals.

“We need to be able to demonstrate what impact these would have on consumer choice and the costs to customers of using credit cards,” said UKCA chairwoman Melanie Johnson. “We will be reviewing the evidence and we expect the government to do the same.

“These proposals risk disadvantaging more customers than they protect,” she added.

The government has called on credit and store card companies to “clean up their act” with regard to “unfair” charges that are not explained properly to the customer.

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Millions of credit card customers could be putting their details at risk thanks to negligent UK call centres, 97% of which repeatedly breach guidelines on data security, according to a report published today.

A nationwide survey of UK call centre managers by audio recording specialists Veritape found that calls containing sensitive details about customers’ credit cards, including their three-digit security code, are routinely stored on call centre computers, leaving credit card holders exposed to fraud.

This is in direct breach of global industry standards drawn up by the Payment Card Industry Data Security Council.
The report, called The Great Credit Card Gamble, found that over nineteen in twenty call centres that store recordings of transactional conversations with customers do not delete or mask any sensitive information revealed during these calls.

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Cases of identity fraud have skyrocketed during the economic downturn, with the number of victims of identity theft increasing by a third since the start of the year, according to the fraud prevention service CIFAS.

The past nine months have seen 59,000 recorded cases of impersonation by criminals seeking cash, loans, credit and goods this year. This means the UK has had more instances of identity fraud this year than any other country in Europe.

Account takeover, whereby a criminal hacks into an existing account rather than setting up a new one, have more than tripled in the last two years. More than half of these instances involved credit card accounts. The increase in online shopping and customer carelessness are both thought to be behind the rise. A quarter of takeovers affected bank accounts, while the number of mobile-phone accounts hijacked increased from 899 to 2,022.

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The amount of money lost through card fraud in the UK fell by 23% during the first half of the year as new prevention measures came into effect, new figures reveal.

The total cost of fraud on credit cards and debit cards fell to £232.8 million from January to June, down from £304.2 million in the first half of last year, according to Financial Fraud Action UK (FFAUK).

Losses from counterfeit card crime, where cards are skimmed or copied, fell by the largest margin, from £88.8 million last year to £46.3 million. Card-not-present fraud, including internet, phone and mail order crime, fell 18% from £163.9 million last year to £134 million.

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A year after the collapse of travel firm XL, 10,000 customers are still waiting for refunds.

Many find themselves stuck in a deadlock between the Civil Aviation Authority and credit card operators, both of which are supposed to protect consumers whose holidays fall through, while some customers have not yet received refunds because of difficulties in proving how much they paid for their holiday.

The XL Leisure Group collapsed last September, when it was the third largest travel group in the UK. The company was covered by the Civil Aviation Authority’s Air Travel Organisers’ Licensing (ATOL) scheme, through which customers were advised to seek compensation.

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A county court judge has told a lender that it cannot demand payment of an £8,000 debt, possibly paving the way for thousands of borrowers to default on repayments.

Judge Jacqueline Smart at South Shields county court has ruled that the MBNA credit card company cannot demand that a customer repay her debt. The company tried to force Lynne Thorius to repay the £8,000 she owed on her card.

However, Judge Smart decided that there had been an unfair relationship between MBNA and Ms Thorius because of the way in which the firm sold her payment protection insurance.

The credit card was sold to Ms Thorius in the official Sunderland Football Club shop in 2002, along with payment protection insurance, which is designed to cover debt repayments in case of illness or redundancy.

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The Financial Services Authority has told banks and building societies to compensate customers who may have been mis-sold payment protection insurance.

The ruling covers firms that have sold more than 40% of their “single premium” PPI policies at the same time as giving unsecured personal loans. The FSA will also target other companies that have mis-sold PPI when offering secured loans or credit cards.

The regulator has asked firms to reopen 185,000 rejected complaints about PPI.

Payment Protection Insurance is designed to cover debt repayments if you can’t work because of illness or redundancy, and is usually offered whenever you take out a loan, mortgage, credit card or store card, or bought something on credit.

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The Bank of England’s Monetary Policy Committee voted yesterday to keep interest rates set at 0.5% for the sixth consecutive month.

The MPC also decided against increasing the amount of money the Bank is pumping into the economy through quantitative easing - the option favoured by three members of the nine-strong committee - keeping the size of the scheme at £175 billion. It said that the Bank would carry out quantitative easing for another two months, adding that “The scale of the programme will be kept under review.”

The MPC’s decision follows recent evidence that the UK economy may be returning to growth after five quarters of recession in a row, including a rise in manufacturing output, a tentative rise in house prices and reports of increased activity in the services sector.

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