We Introduce You

Okay here we go - today I’m going to moan about two things. The first thing I’m going to grumble about is smiling faces. Why would I whinge about smiling faces you might ask. Well these are particular types of smiling faces - they’re the ones that appear on credit advertisements. We’ve all seen them and they generally fall into a two categories, firstly there’s the smiling blonde with bright red lipstick wearing a telephone headset and she’s saying to the prospective customer - “look at me I’m beautiful, friendly, ready to answer your call and sort out all your financial difficulties”. Then there’s the other type, which sometimes involves a young and healthy family or someone on their own with a very big beaming smile throwing money around saying to the camera that all their financial difficulties are now over. Why do people fall for these advertisements? Do they care? Or am I just having one of those days?

The second thing I’m going to whinge about is the growing trend in organisations setting up websites that look like they’re there to advise you on something, whereas in reality they are just the front end of a loans or IVA business. I don’t want to name names, but you know the type I mean. Hark at me you might say, pointing something out like that when you might not be whiter than white yourself. But I think I am being straight and honest - We Introduce You to Secured Loans - we’ll get you sorted out with a secured loan from a large lending panel of over 12 organisations and earn commision from it - simple as that.

Seriously though, if you do want some help and advice about managing debt then these three organisations will be able to help.

The Citizens Advice Bureau (CAB)

At the time of writing the Citizens Advice Bureau (CAB), funded by charity, has around twenty one thousand volunteers offering telephone advice, on the Internet or at its 3,400 ‘drop in centres’ spread across Britain. The Citizens Advice Bureau is no stranger to dealing with people looking at Secured Loans and late last year produced a comprehensive report detailing what it saw wrong with the selling of Payment Protection Insurance (PPI) for Secured Loans, credit cards and other loans in general. At the same time it reported to the FSA, OFT and various Treasury committees to get a better deal with consumers for insurance. As recently as May 2006 it also produced a report entitled ‘Deeper In Debt’ which discussed the problems their clients faced when coping with debt. Since that date, the FSA has responded by issuing judgements against the industries handling of payment insurance.

One of the major advantages CAB has over other Debt counselling advisers is how easy it is to get in touch with them. You can literally just pick up the phone for a quick discussion or call into one of their local advice centres. The CAB also has a very detailed website that contains a Frequently Asked Questions (FAQ) section, advise on how to cope with Debt, where to get the best deals on credit, how to give yourself a financial health check and where to go for further advice. The CAB is also renowned for its excellent fact sheets and with regards to Secured Loans produces them for advice about County Court Judgements, problems with keeping up Mortgage payments, negotiating with creditors and provides a jargon buster. It also has a series of sample letters that can be used to help getting debts suspended or used to negotiate a re-payment plan.

The Consumer Credit Counselling Service

Whereas the CAB deals in general advice the Consumer Credit Counselling Service (CCCS) specifically deals with coping with bad debt - so is ideally placed to offer advice on Secured Loans. Although it is physically less accessible than the CAB, as it only has eight operational centres, it does provide a free phone number - 0800 138 1111 - where you can get specific and immediate advice. For those who don’t like talking to someone in person they can also be contacted via email the address that can be found at on their contact page

Perhaps it is the sign of the times that the CCCS, founded at one centre in Leeds in 1993, grew to 4 centres in 1996 and now have 8 dedicated centres and two satellite sites, one in Northern Ireland and one a partnership with Direct Debt Line in East Sussex.

The CCCS is a registered charity and is fully funded by the Credit Industry. As is the case with the Citizens Advice Bureau it has a website that provides full details on how to cope with mounting debt problems. Unlike the CAB it is specifically targeted at people with financial difficulties.

The National Debt Line

The National Debt Line was set up in 1987 to provide purely telephone self-help guidance for people with credit and debt problems. All their advice is free, confidential and entirely independent and they can be contacted on 0808 808 4000. The National Debt Line is funded by the charity Money Advice Trust that is in turn funded primarily by the large players in the credit and finance sector. Most of these are also some of the larger players in the Secured Loans market like Barclays Bank PLC, GE Capital Bank, and Paragon. Even though the National Debt line is funded by these organisations they in no way have anything to do with its day-to-day operation.

National Debt Line will also provide on request a selection of Self-Help packs and fact sheets most of which are relevant to someone looking for a Secured Loan. As the service is telephone based their website is limited to information about the Agency only, but for a brief guide outlining how they operate.

There you go, that’s my resume of what advice is on offer. If you do find yourself tempted to any of the other websites then please just make sure in advance you know who you are dealing with. In essence, the advice you seek should always be impartial.

Perhaps unwisely for a someone who can earn commission on Payment Protection Insurance (PPI), I’ve mentioned a few times how you can save money by going to a specialist insurer rather than accepting the payment protection offered by the secured loan, loan or mortgage provider.

Well, this morning I thought - as I’ve mentioned this a few times, then perhaps I should back it up by mentioning some of the specialist companies who offer stand alone insurance.

I’m not an expert in Insurance (some may argue I’m not an expert in anything!) So I had to do a bit of early morning Internet digging. As with more or less everything in the finance world, it ended up being a bit of an eye opener.

First of all I thought I’d build up a list of the providers, then visit their websites, read their policies, look at their prices and then present a concise list on here - job done - I could then go away and enjoy the remainder of the Bank Holiday - but oh no - life’s not like that.

To start to build up my list I visited Moneysavingexpert.com, The Motley Fool and thisismoney. I purposefully missed out the price comparison sites Moneysupermarket and Uswitch - my argument being that Insurers would only appear if they had a commission deal with the site.

Moneysavingexpert said “A growing number of firms, such as Best Insurance, Paymentcare and British Insurance offer cheap policies”

The Motleyfool said “Get it from a cheaper ’stand-alone’ provider, such as: paymentcare, Helpupay, Best Insurance, British Insurance, Burgesses, mortgageprotect and the Post Office”.

Thisismoney just repeated the same companies, but I still thought - this is great I’ve only visited 3 sites and I’ve already got 7 providers. But then I did some investigation and found that Mortgageprotect and Helpupay are one and the same company - they are both trading names of Pinnacle Insurance PLC. I then discovered that Best Insurance, British Insurance and Burgesses are trading names of British Insurance Ltd. So Martin Lewis’s (the moneysavingexpert) ‘growing number of firms’ was actually an unimpressive list of two (but I note he has a commission scheme with both!) and The Motley Fool’s slightly more impressive list of seven was actually four.

I then did a little bit more digging and found that British Insurance Ltd. trade under the names - WAIT FOR IT - Burgesses-insurance, Burgesses, 123-mortgage-protection, Protectiononline, Instant-payment-protection, Shelter, Bestinsurance, Protectyourloan, Uvinsurance, - DEEP BREATH - Rhinoinsurance, Protectyourmortgage, Protectyourearnings, Biba-mortgage-protection , Safetyfirst, Insureyourmoney , Goodinsurance and Stokeinsurance and this isn’t even a comprehensive list, believe me there are more!

I then scratched my head - scratched it some more and came to the conclusion that if you’re looking for payment protection insurance then the following seem to be the best companies to go to:-

http://www.payprotect.co.uk/
http://www.pinnacle.co.uk/
http://www.paymentcare.co.uk/
http://www.britishinsurance.com
http://www.postoffice.co.uk

Please bear in mind that some form of payment protection schemes pay the money directly to you - if you find yourself in the unfortunate position of being unemployed this may effect your benefits as it is might be seen as income by the Jobcentre. Please also note that if you apply for the Post Office cover, the Post Office is only acting as an ‘Introducer’ for Axa and as always - if you’re taking out any financial commitment, it’s sometimes wise to seek professional advice.

I always said I would post the odd Financial Tip, so here’s one for people look at a Sub-Prime (or sometimes called Credit Impaired) mortgage. To clarify We Introduce You don’t deal in mortgages, we only deal in secured loans. The idea - at this stage - is to concentrate on one thing and be good at it - but that’s not to say we don’t build up a wide knowledge base of the entire mortgage and secured loans marketplace - so here goes……

For those with an adverse credit rating getting a new mortgage, re-mortgage or even secured loan can prove to be a trip into a minefield.

One of the problems facing anyone looking for a credit-impaired mortgage is the different criterion that lenders apply to their offerings. Some might allow you to have County Court Judgements (CCJs) but do not permit mortgage arrears, while another mortgage lender might take a completely contrary view. Some take into account the amount of standing debt while others look at the number of missed payments or CCJs. Others might use more detailed criteria, for example, a CCJ over particular time old or under a set amount.

The Sub Prime market is much more complicated that the mainstream market and borrowers need to look carefully at which lenders offer the best rate and terms by taking into account their specific adverse credit.

Borrowers shouldn’t just look at the interest rate on offer they should look at the whole deal. Some of the two and three year credit impaired mortgages have a tie-in that requires the borrower to switch to one of their more expensive standard variable rates, or pay an sizeable penalty to get out of the deal when the time is up. So going with a mortgage provider with an initial lower interest may not be the best option in the long run. So the up front rate may not be high the expensive tie-in could last for another two or three years after the credit-impaired mortgage period is up.

Another thing to watch out for is that a growing trend is for Companies to only concentrate on the Sub Prime market and they may not be fully aware of what’s on offer in the mainstream market. This could operate to the disadvantage of borrowers who might still qualify for a Prime mortgage but aren’t made aware of the option. You could end up tied into expensive rates and paying 1-2 percentage points over what you could have got by going mainstream. Over the period of the mortgage this can add up to a very considerable sum.

Borrowers should also be aware that brokers earn higher commissions on credit-impaired mortgages. Because, by their very nature, sub prime mortgages are at a higher interest rate the ultimate lender is willing to pay the broker more in commission.

Higher commission fees could tempt the less scrupulous brokers to push borrowers into taking on a sub prime mortgage where he or she might be eligible for a Prime one. When you are looking for a credit-impaired mortgage always ask the broker whether they deal in both prime and sub-prime and always ask what the prime alternative is to any mortgage they offer.

After writing that I can understand why we stick with secured loans - for the time being - we have enough complications to deal with!

As I say on the Main Site if you do have money problems it’s well paying a visit to the Citizens Advice Bureau or calling one of the specialist debt advisers like CCCS or National Debtline