IF YOU DON’T LIKE THE WEATHER IN BRITAIN, JUST WAIT FIVE MINUTES

My headline is not original. The phrase might or might not have been coined, but was certainly made famous, by Bob Hope. The comedian, an American citizen of course, was a native of Britain, so he was entitled to make a joke about our weather; a good joke too, IMHO.

I shan’t have a go at our weather; that would be pointless, although it sometimes seems that moaning about the subject is a national pastime. I remember many year ago, when I was running training courses in Scandinavia, one of the things people most wanted to talk about under the heading of “cross-cultural awareness” was what constitutes appropriate subjects for small-talk in Britain. This seemed to be a challenge for many Scandinavian businesspeople because there, in a business meeting, people tended (not always but generally) to get down to business immediately; they found our custom of verbal sparring through small-talk a challenge.

Well, the experts, and I am not one, say that the weather is rightly the #1 topic. That’s obvious to us but there is logic to it. Why? “Because it’s uncontroversial and it’s the same for everyone.” They might well have added that in Britain it’s worth talking about because it is so variable, as memorably pointed out by Bob Hope. If you’d been in the Sahara, on the other hand, and ventured the startling opinion that the weather was hot, it would be assumed that the sun had got to you.

No, my moan / whinge / rant is not about the weather but about the BBC’s feeling that we need to be given weather forecasts on a minute-by-minute basis, even when (and this is the key) those forecasts are, by virtue of programming time pressures, so short as to be meaningless. That’s leaving aside whether they are accurate. It’s not enough to have a full five-minute weather forecast a few times every day; useful for those who need to hear it and avoidable for the rest of us; my beef is with the assumed need to put frequent short weather forecasts into what are otherwise current affairs programmes.

Here’s an example, from BBC Radio 4’s “Today” programme, this very morning. That’s the programme of which I heard Sandi Toksvig (national treasure in both Britain and her native Denmark, I think) say, while speaking at a dinner here in Bristol: “The Today programme; isn’t it wonderful? Twenty minutes of news, crammed into three hours.” Well, whatever the truth of her witty description, the producers feel it necessary to give us weather forecasts regularly throughout the show. A show, I stress, that is going out on a national channel, to a country with weather that famously fluctuates not just from minute to minute (thank you again, Bob Hope) but from town to town.

This was the forecast, at 0830 this morning, and it was typical: “Now the weather! Well, mostly dry today. Sunny spells but there will be a few showers.”

I kid you not.

If the forecast had been important to me, I would have been so frustrated. I would have been asking, “Where, exactly, will it be like that? In London? In Scotland? Here in Bristol, where I live? And when exactly will it be like that? This morning? This afternoon? Or will it be like that the whole day?”

Why bother with such a short and generalised forecast?

And while I’m about it; the language. I recently heard: “the rain eases this afternoon.” I think you’ll find, as they say, that the use of the present simple to describe a future event is supposed (for those of us who are anal about language) to be reserved for so-called timetabled events, e.g. “our train leaves at five”. Future weather does not come into the category of a timetabled event.

Despite the expensive facilities, large staff and undoubted modelling expertise of our Met Office, described in a fascinating recent article in the FT, the implication of certainty is ridiculous. Why, why, why don’t we adopt the US habit of saying things like “there is a 40% chance of precipitation”?

I can handle that. If they’d said 60% I might take an umbrella; for 40% I won’t.

Meanwhile, I go back to my usual method of weather forecasting. I look out of the window. That works for me.

GOOD NEWS ON INFLATION: WELL, MAYBE

It’s always nice to have some good news on the economic front and today there was good news on inflation. The “favoured” CPI measure fell in June to 4.2%, having been expected to be 4.5%.

However, behind the headlines are some interesting facts. Weak retail sales have caused heavy discounting in some sectors; for example the price of video cameras fell, according to the BBC news today.

Whoa! Video cameras? I haven’t bought one of those for a few years; especially now that I have a smartphone that takes pictures, in common with about 75% of the population. Even back then, a video camera was hardly a regular and certainly not an essential purchase.

So how come video cameras apparently found their way into the “basket” of items on whose prices the politically-important inflation rates are calculated?

Answers on a postcard, please.

RAIL IN THE HEADLINES: BOMBARDIER JOB LOSSES, THAMESLINK SIEMENS DECISION

Rail is again in the headlines but not for the right reasons. That nice Mr Hammond has been defending the fact that Bombardier, our last train maker,  has announced redundancies at its Derby factory.

To what extent this was because Thameslink had decided to buy “1200 new trains” from Siemens, according to the FT, is  not clear. It’s not even clear how many trains are involved; the Guardian on the same day said 1200 carriages, which is rather different; unless, of course, these are single-carriage trains, which we sometimes have to tolerate on some routes here in the rail-deprived West Country.

Who’s the guilty party?

The FT’s coverage went on to say that “insiders attributed the (Siemens) decision to a procurement process set up by the previous Labour Government” and in a radio interview that day I definitely heard Philip Hammond espouse that view. However he has also flagged`up his concerns about the EU procurement directive,an unequal implementation of which meant that you get German-built trains on German railways and French-built trains on French railways but we’ll get (mostly) German-built Thameslink trains, though some of the components for the latter will be UK-sourced.

Mr Hammond should decide which to blame; although the answer is probably not simple (it rarely is), it’d make better copy if he blamed just one party.

That nice Mr Hammond

By the way, the minister seemed surprised that the level-playing-field concept is not universally accepted throughout Europe. When I worked in the chemical industry, I remember it was often said that some of our European partners (no names, no pack-drill) would always press for the strictest possible regulations on safety, environment etc, knowing that they would be less strictly policed in their own countries, thus giving them a cost advantage. So the concept is not new; if it was a surprise, that justifies my having called him that nice Mr Hammond.

Bombardier: post hoc ergo propter hoc?

The Transport Secretary did, however, point out robustly  to a Radio 4 interviewer that the job losses at Bombardier were not totally, or even primarily, caused by the Thameslink decision. And he persisted in his defence even when the interviewer (no names again) pressed him with the traditional “so you are saying that …”, followed by a summary that was totally at variance with what had actually been said. Who’d be a government minister?

WANT TO KNOW MORE?

For the Guardian story:

For the FT story:  (but you may have to register)

 

POPULAR NEW (ISH) LENDERS GAINING GROUND

A while ago I blogged about the new(ish) peer-to-peer lending websites, such as Zopa, the largest in the UK. I also said I’d be looking into the matter further.

So I decided to read what the established financial journalists (the people who are paid for their expertise) are saying.

I’ve looked at a few of them, following the principle of Lobachesvky, who famously said: (according to the legendary Tom Lehrer): “To steal from one source; that’s plagiarism. To steal from many: that’s research.”

Firstly, I’ve learned that Zopa stands for the “Zone Of Possible Agreement” and its aim is to cut out the middleman by putting lenders and borrowers directly in touch. The site acts as a facilitator and makes sure debts are repaid.

“Personal finance just got a whole lot friendlier”

In an earlier post on this subject I mentioned Maryrose Fison’s article with the above title (January 2011) in the Independent. See below for a link, as it’s still on their website. Here’s my inexpert précis of what some other writers have said.

Rosie Murray-West, Daily Telegraph

She says that “(new-style) Peer-to-peer lending websites and old-style credit unions have been major beneficiaries of public anger against the banks, seeing a huge level of growth in 2010.

“ …Zopa … allows ordinary people with savings to lend them out at an average rate of 8pc and has now lent a total of £110m. Its rising popularity has led to four new peer-to-peer lenders being created in 2010, and the industry is now working on becoming properly regulated and establishing a code of conduct.”

Credit Unions

“Meanwhile credit unions, which are co-operative organisations offering affordable loans and accounts without bank charges, have also grown.

A spokesman for ABCUL, the credit union association, said the amount of savings in British credit unions had risen by 27% in the two years to March despite the fact that many British people were struggling to save in the current economic climate. The number of new members of credit unions rose by 18.4% in the same period.

“Mark Lyonette, ABCUL’s chief executive, said that Credit Unions continue to grow as more and more people seek a fair and affordable alternative to the high street banks. He added that if the Government made good on its interest in making credit unions accessible through the post office network, there was the potential for many more people to join them.”

Martin Lewis’s ‘Money-Saving Expert’ site; opinions on Zopa

The ‘MSE’ site was sceptical about Zopa at first. But now they are saying that under certain conditions, it makes sense. As of today, the site’s view is:

“… for those with a good credit score, there’s an alternative. Zopa is a unique internet marketplace which couples people who want to lend with those who want to borrow. On application it gives you a credit score, and if you get its top A*, A or B ranking, you can borrow.

Loan rates vary daily and are determined by the amount needed and length of borrowing. For A* or A grade credit scorers wanting cash over 36 or 60 months, it can beat some loan rates, particularly on smaller amounts; currently, 9.6% APR is available for loans of £4,000, for example.”

View of a Zopa customer

By way of a change from the financial journos, here’s a quote from an actual Zopa borrower. (5 July 2011)

“Just thought I would let you all see my finished kitchen :o) All tiled and just about back to normal now. Thank you all to those who have helped me pay for this, you have no idea how happy I am it’s finally been done! :0} xxxxxx”

Editor’s note (that’s me): there is a video on Zopa’s Facebook page too but I’m not able to reproduce that, because I haven’t done the training course to insert video.

For your guidance, their loans are apparently mostly for the purpose of home improvement (like the above), cars or debt consolidation.

Moneywise “Most Trusted” awards

… and finally, I must congratulate this peer-to-peer lender for having achieved an important award. According to Moneywise magazine, Zopa is the UK’s Most Trusted Personal Loans Provider 2011. This was for the second year running and was against a shortlist that also included First Direct, Nationwide, Tesco Bank, Sainsbury’s Bank and Natwest.

WANT TO KNOW MORE?

1. For Rosie Murray-West’s article from the Daily Telegraph: http://www.telegraph.co.uk/finance/personalfinance/savings/8214641/Savers-spurn-banks-for-Zopa-style-peer-to-peer-lenders.html

2. Peer-to-peer lending: how to choose the right site by Emma Simon. (also in the Telegraph)

3. For the article in The Independent by Maryrose Fison: http://www.independent.co.uk/money/spend-save/maryrose-fison-personal-finance-just-got-a-whole-lot-friendlier-2173935.html

4. For the Money Saving Expert site and newsletter signup: http://www.moneysavingexpert.com/

__________________________________________________________

For a free sample of my book, “Back to the Black: how to become debt-free and stay that way”:

Kindle format: http://www.amazon.com/dp/B004PLMAQM

Other e-formats, including .pdf: http://www.smashwords.com/books/view/22886

You can follow me on Twitter: @michaelmac43, on Facebook: Michael James MacMahon, or on Linked In.

 

SO FAREWELL THEN, WMBLDN, FOR ANOTHER YEAR: TRIUMPHS AND GRIPES

 

So it’s all over for another year! I have tennis withdrawal symptoms already. Here’s my totally unscientific survey of the highs and lows of Wmbldn 2011.

Highs

1: Both singles titles were won by the player who was, by my reckoning, the underdog. Celebrating the underdog’s win is The British Way. It was my way anyway.

2: The women’s singles was won by the player who didn’t scream / grunt at 110 dB every time she hit the ball (tho’ see below for my totally contradictory regret for the lovely Maria having lost).

The early grunt

On the grunt front, I still treasure an article by Clive James, many years ago, when he said that Jimmy Connors “has taken to grunting loudly at the instant of hitting the ball instead of just afterwards. Confused opponents try to hit the grunt instead of the ball.”

3: Lots more great matches, too numerous to list.

But on the other hand …

Lows

0. The lovely Maria lost (but see 1 above)

1, 2 and 3: the BBC’s obsession with interviewing sportspeople (not just tennis stars) 30 seconds after the end of their matches. They must have decided it’s popular but, in the words of a friend of mine: “It’s sport for people who don’t much like sport”.

With a few notable exceptions, most sportspeople are not able to give anything more than a routine answer when totally knackered out, maybe crushed by the disappointment of having lost. They do their talking during the match; afterwards, I’d rather hear the views of the expensively-assembled and very expert team of commentators.

Grumpy Old Man mode

As for the interviewers themselves, don’t get me started. Oh, it seems I already have. When I hear one of them coming up, I go into default grumpy-old-man mode. I’m not alone; on a sports website after the Beijing Olympics I found lots of criticisms of these kinds of facile interviews from serious athletics fans, one of whom wrote: “when a Phil Jones interview comes up, I hit the mute button.”

Ungracious Serena?

John Inverdale was clearly shocked by Serena Williams’ “ungracious” (his word) response to an interview question. However, I’ve since seen the whole transcript; she gave serious answers to loads of questions after what was clearly a disappointing defeat. Only one, right at the end, revealed her true feelings:

Q. A lot of people would say if you come here after the best part of the year out of the game and walked away with the title, it wouldn’t necessarily have been a good thing for women’s tennis. Can you appreciate that? Does this result show it’s competitive still?

SERENA WILLIAMS: Yeah, I’m super happy that I lost. Go, women’s tennis.

To ask that question of someone who’d just come back from very serious health problems and had just been put out by an opponent playing out of her skin, got the response it deserved. Ungracious? Maybe. Understandable, I’d say.

REVERSING BEECHING: WEST OF ENGLAND COULD FOLLOW SCOTLAND’S LEAD

My local paper, the Bristol (UK) Evening Post, has thrown its influential weight behind a cause in which I believe strongly; the need for better public transport. The first five pages of yesterday’s issue (30 June) focus on the theme and the first two sentences on the front page sum it up:

“It’s time Greater Bristol had a transport system fit for the 21st century.

Most experts believe the key to this is railways, and our map shows a bold vision for the future.”

(I would have reproduced the map but my editing skills are yet up to it)

The paper also states its support for the creation of an Integrated Transport Authority for the Greater Bristol area; an area covering four different local authorities that don’t at present all agree on the rail option.

See below for link to their full story.

Scotland takes the lead

About a week ago I heard a fascinating programme on BBC Radio 4, about the recent trend to expand railway services in Scotland: reopening lines that had been closed during the Maudling / Beeching cuts of the 60s and since.

There was talk of the “business case”, e.g. reconnecting St Andrews, with its university, golf and tourism, but also much talk of the social case, when there was not a strong business case. Strangely to my ears, it seemed that the social case had more traction in Scotland than it does in England. Or am I wrong about that?

High-speed rail interesting; local rail boring?

However … the coalition has restated its commitment to HS2, the high-speed line from London to Birmingham, subsequently to Manchester and Leeds. The cost? £37bn, maybe. But wait … Philip Hammond, the Minister responsible, said in the Financial Times (June 24) that it will probably be much less than that. Why? Because we don’t have to pay for the whole project ourselves. In other words, we can move most of the cost off-balance sheet. So, to summarise: it could be £37bn. It could, of course, be much more, judging by our track record in such projects. Or it could be less; but only if we hand the private sector a “licence to print money”. Sorry, I meant a PFI project.

When it comes to rail, it seems that the Westminster village can only get interested if the project is big enough and the sums are eye-watering enough. Improving services and reducing fares on 95% of the country’s lines, where we pay the highest fares in Europe for arguably the worst service, is clearly a boring matter.

Sketchy local rail in Bristol

Where I live (in Bristol, surely one of the UK’s major cities and a mere 120 miles from Westminster) we have a pretty sketchy suburban rail service, with trains that should have been pensioned off 30 years ago. That’s why I’ve joined a lobbying group called FOSBR, which stands for Friends of Suburban Bristol Railways.

Severn Beach Line success

FOSBR’s lobbying has been successful in improving frequency and reliability on one of the local lines, from Bristol Temple Meads to Avonmouth and on to Severn Beach. After that positive outcome, there is another focus of interest for those in favour of expanding access to local rail in this area: the former passenger line from Bristol to Portbury, on the North Somerset side of the Avon Gorge.

That’s a wonderfully scenic run that’s experienced by no passengers, as freight trains constitute the sole traffic. There has for years been a proposal to reintroduce passenger services and to extend the line a mere three miles to the rapidly-growing town of Portishead.

Portishead: growth and congestion

When I arrived in this area I was told that Portishead was the fastest-growing town in the West. In fact, according to local railway lobbyists, its population has doubled in recent years.

I’ve been told that Portishead is now the largest town in the country without a rail link. It has one congested single-carriageway road connecting it with Bristol, to which a high proportion of residents commute. The rush-hour journey of eight miles (via a predictably congested junction with the M5) often takes well over an hour; a headache highlighted by a 2008 BBC4 programme. In fact, on the day presenter Simon Calder made the journey it took over two hours. Two hours for eight miles?

Despite this, the rail proposal has got nowhere. Instead, the local planners have been proposing to address the commuting problem by means of a BRT (Bus Rapid Transit) scheme. The words Rapid Transit sound impressive and modern (and rapid), don’t they? But will the vehicles be the bendy buses London doesn’t want? And where exactly will these rapid buses run, without taking a fair chunk of Green Belt?

Hope for the future?

However, I am optimistic that with the very strong support that’s been shown by the Bristol Evening Post and of the local MPs there is now a hope that the BRT decision can be reversed and the funding reallocated to rail. After that, why not a real 21st-century transport system for the Greater Bristol area? After all, if it makes sense to reverse the Beeching cuts in Scotland, why shouldn’t we emulate that trend in the West of England?

Watch this space!

 

WANT TO KNOW MORE?

For the Bristol Evening Post’s coverage 30.06.11: http://www.thisisbristol.co.uk/Bristol-s-metro-far-track-think/story-12854178-detail/story.html

About “Reversing Dr Beeching” (BBC Radio 4 programme): http://www.bbc.co.uk/iplayer/episode/b0120783/Reversing_Dr_Beeching/

About rail pressure groups in the Bristol area:

About former Bristol / Portishead / Minehead line (BBC4 TV programme):

http://www.bbc.co.uk/somerset/content/articles/2008/10/16/beeching_feature.shtml

 

A BRISTOL CULTURE-VULTURE?

For a year or two I’ve been sending out an occasional “culture-vultures’ bulletin” by e-mail, to my Bristol-based friends. My aim has been to flag up just a few upcoming (is that a word?) events that I fancy, from the impossibly wide selection of things going on in this lively city. There is nothing scientific or even systematic in my selection; just things that have caught my eye.

Here’s a recent and cut-down sample from my bulletin.

JUNE

24-26: Foodies Festival. Bristol Harbourside. http://www.foodiesfestival.com/bristol/

24: “The Opera Picnic”. All Saints, Clifton, Bristol, 6:30. Ffi Andrew Morgan, Hollis Morgan, 0117 973 6565

24: Mozart Requiem etc., Bath Choral Society. Bath Abbey, 7:30. http://www.bath-choral-society.org.uk/index.php?page=mozart-requiem

25: Andy Sheppard vs Moscow Drug Club. St George’s Bristol, 8 pm http://www.stgeorgesbristol.co.uk/

30: RWA fundraising event, “Midsummer Magic”. Royal West of England Academy, Queens Rd, Clifton, Bristol BS8 1PX. 7.30 pm. www.rwa.org.uk

30 (till 2 July): “Romeo & Juliet”, GB Theatre Co. Blaise Castle, Henbury, Bristol. www.gbtheatre.com/blaisecastle_bristol.html

JULY

29-31: Bristol Harbour Festival. www.bristolharbourfestival.co.uk/

AUG

11-14: International Balloon Fiesta, Ashton Court, Bristol. www.bristolballoonfiesta.co.uk/

SEPT

11-12:   “Telling Tales of Drunkenness & Cruelty.” Tony Rowlands, with the Henri Passat Band featuring Madeleine MacMahon. Brewery Theatre, 291 North Street, Bristol BS3 1JP. http://tobaccofactorytheatre.com/visit/directions/

ALEC SALMOND TALKS ON FOOTBALL AND BOOZE

A few days ago I was listening to an interview with Scotland’s First Minister Alec Salmond on Woman’s Hour (BBC Radio 4, 10 June). The topic – and I was most impressed with what Salmond said – was the Scottish Government’s efforts to tackle both alcohol abuse in general and the sectarian violence that’s recently been in the news associated with Scottish football.

On the alcohol question, I was less impressed with interviewer Jenni Murray’s suggestion: “but surely (the classic interviewer’s knee-jerk) the Scottish economy depends on the whisky industry”, or words to that effect. Salmond countered by saying that whisky wasn’t the main issue in Scotland, in his view; his primary concern seemed to be with binge drinking among the young, therefore less to do with whisky and more to do with cut-price supermarket vodka, cider and high-strength beers, as in England.

Drinking north and south of the border

By the way, Salmond said “we drink more per head (10%, was it? I can’t recall) than you do in England, and you drink too much.” That last throwaway line “ … and you drink too much”  I might have ignored, if said by your average teetotal hellfire preacher; but said with a smile (this was radio, but I can tell) by someone as humorous as Salmond is known to be – a man that I’ll wager likes a drink or two himself – it was OK by me. As G K Chesterton said: “humour gets in under the door while seriousness is still fumbling with the door-handle”. Or words to that effect.

Whisky exports

Going back to the health of the whisky industry (financial health, that is): it wasn’t mentioned but I’d always assumed its success was based largely on exports, not on sales in Scotland. I have in fact heard that Venezuelans often claim to drink more Scotch than the Scots.

Domestic violence links

Salmond mentioned the increased incidence of domestic violence connected with both alcohol and football (especially after the combination that occurs after so-called “Old Firm” matches between Celtic and Rangers). He referred to a scheme they have in Scotland to try and address the problem of domestic violence in general; it’s called the Caledonian System.

Questioning this connection, Jenni Murray said (I can’t recall if she might well have prefaced it with “but surely …”) that the organisation Scottish Women’s Aid have stated there is no link between football, alcohol and domestic violence and that it’s purely a matter of attitudes. Salmond disagreed; and from police statistics I’ve read in the past I would have disagreed too, if they’d asked me.

Want to know more?

… about the Caledonian System: http://www.scotland.gov.uk/Topics/People/Equality/violence-women/CaledonianSystem

Michael J MacMahon, Bristol, UK

e-mail michael.43@blueyonder.co.uk

Book: www.back-to-the-black.com

Voice: www.uk.voicespro.com/view.php?uid=358656

DOMESTIC RING-FENCING?

I heard an interesting discussion on the radio yesterday (BBC Radio 4 but I can’t recall which programme). The topic was the massive increases in retail prices for domestic energy, Scottish Power proudly leading the way with a planned 19% hike in domestic gas prices. (Have you ever heard of a 19% drop from any energy provider when wholesale gas prices are falling? Answers on a postcard, please.)

This news has led to predictions of widespread hardship next winter for those older people for whom energy costs are a major proportion of their budget; thus the discussion turned to the annual Winter Fuel Payment, which here in the UK will be £200 for winter 2011/12 (unless you are over 80, when it’ll be £300).

To put that allowance in perspective, the predicted energy price hike is expected to add around £175 to average annual bills for Scottish Power’s 2.4m customers; and up to £300 extra as a UK average, according to an industry commentator, when other energy companies follow suit.

Benefit used for its intended purpose? Discuss.

A contributor to the programme said “studies have shown” that in general the Winter Fuel Payment is in fact used to buy energy; 40% of recipients use it for the purpose intended. As this is the predominant use of the benefit, the measure is seen as appropriately targeted.

This made me wonder: “how do they know?” These days the payments will predominantly, if not totally, be by cheque or bank payment. So the money goes in to a bank account. It comes out to pay for … what? The concept of ring-fencing in domestic economy only means something for the minority of people who do regular and accurate budgets and cash-flow forecasts.

The alternative: they asked people through an opinion poll. Fine … but if you were in receipt of this fuel benefit and wanted to hold on to it; and then a pollster came to your door or your telephone and asked for what purpose you’d spent the money … would you admit it was for drink or drugs or gambling or going to football or a few dinners out?

Have I missed something? If not, I rest my case, m’lud.

DEBTORS IN DANGER FROM DMP FIRMS, SAYS OFT

A BBC investigation has found that some debt management companies have been holding on to clients’ cash rather than paying it to creditors, The practice has left many debtors thousands of pounds worse off and facing financial ruin.

If a firm goes out of business and client funds have not been kept in a protected account, some or all of the money is likely to be lost and the debtor becomes liable for the shortfall.

The Office of Fair Trading (OFT) has condemned the practice as “totally unacceptable” and has promised a crackdown.

Repossession order

One couple mentioned in the report had to put their house on the market and could face repossession, after responding to a cold-call from a debt management company and taking out a Debt Management Plan or DMP.

That company, Global Debt Solutions, based in Bolton, offered to arrange a repayment plan for £40,000 of credit card debt and loans. However, after having made payments to Global Debt Solutions for several months, the couple found the money was not being handed over to creditors.

Those creditors have successfully taken the couple to court, so they now have County Court Judgements against them. They’ll also have to go to court on their mortgage, so their debt problems have got far worse instead of being solved. It could soon be at a point where they’ll lose their home.

A widespread practice?

Global Debt Solutions, later known as 3 Step Finance, has been shut down by the Insolvency Service, which found that it did not monitor payments properly.

However, it has emerged that other companies have adopted the same tactic of accepting money from people in debt and not passing it on to creditors.

OFT action

A debtor taking out a DMP with a company using this tactic runs a real risk that the company might fail while the funds are in its account.

David Fisher from the Office of Fair Trading is promising action. “We regard the practice as unacceptable,” he warns. “Where we have evidence we will remove a company’s consumer credit licence, which means it cannot operate.

“We will also next month (i.e. June 2011) be issuing stronger rules for the entire sector, which explain what we expect of them.”

That is welcome news but sadly it is already too late for those debtors who are already dealing, or will soon be dealing, with a repossession order for their home.

Conclusion: take impartial advice

I conclude by saying what I always say: before making any important financial decision – including taking out a Debt Management Plan with a commercial company – take advantage of the free and impartial debt advice which is available these days. I stress the word “impartial”, because some advice is advertised as free but is not impartial, i.e. the organisation has a commercial motive for advising a certain course of action.

The advice you’ll get from the three major national charities working in this field – Citizens Advice, National Debtline and Consumer Credit Counselling Services – is indeed both free and impartial.

There are also many similar (i.e. “not-for-profit”) organisations that operate at a local level but check out carefully that they indeed “not-for-profit” before taking their advice. You can also refer to the Resources section of my book “Back to the Black: how to become debt-free and stay that way”; there you’ll find contact details for about 50 advice organisations.

 

WANT TO KNOW MORE?

The full BBC story is at: http://www.bbc.co.uk/news/business-13568152#story_continues_2

My book “Back to the Black: how to become debt-free and stay that way”, is available on the following retail sites:

Kindle Store: http://www.amazon.com/dp/B004PLMAQM

Smashwords store for other e-formats, including .pdf: http://www.smashwords.com/books/view/22886