We Introduce You

I’d like to go into this in more detail sometime, but some of the things the so called finance comparison sites get up to annoy me. For one thing, when you apply for a secured loan it is almost impossible to give an APR until the loan is actually approved. So people using a price comparison cannot really compare prices (or, more accurately, the APR) between loan providers. Another thing that annoys me is the strange games the price comparison sites get up to. For example, peopleschampion, powered by Moneysupermarket, says the “Best Secured Loans” are :-

Firstplus Exclusive 5.8% typical APR and
Loans.co.uk 11.9% typical APR.

There are only these two loans listed with no more detail and yet one is OVER DOUBLE the APR of the other. Now its pretty obvious to someone ‘in the know’ that the second loan is for more risky clients, but how is the ‘man in the street’ visiting the comparison site supposed to know this? I’m also quite wary of how Firstplus always get one of their so-called ‘exclusive secured loans’ as the one with the lowest APR. I firmly believe the price comparison sites should be given guidelines on how they present the different secured loans and their respective APRs.

On a similar vein, Mortgage Introducer made the following report today :-

“Research for MoneyExpert.com has warned some financial comparison websites could be damaging client’s credit ratings.

Nearly one in five adults have bought financial services products through comparison websites over the past 12 months, according to MoneyExpert.com. Around 8.7 million people have used the sites to buy up to 13.6 million financial services products in the past year - more than 1.1 million sales a month.

But a report from Professor Merlin Stone, commissioned by MoneyExpert.com, warns some of these sites are potentially damaging for consumers as they can encourage people with poor credit ratings to apply for loans, credit cards and mortgages they have little chance of being accepted for. This can further damage their credit rating.

MoneyExpert.com research shows over 2.8 million people have had applications for 3.5 million financial products turned down in the past year. Around six per cent of the population have been rejected when applying for credit cards, loans and mortgages and MoneyExpert.com expects the rate of rejection to rise dramatically.

Professor Stone of the Bristol Business School believes comparison sites can focus too much on price and need to do more to educate and advise customers who are often buying complex financial products. “

Following on from previous posts about PPI, today Cardif Pinnacle have released a press statement announcing an industry seminar in October. Guests from the FSA, PWC, AMI and ABI will be speaking at the event and Steve Devine of Cardif Pinnacle will once again be presenting on the Trade Associations acitivity.

The objective of the seminar is to gain a first-hand insight and interpretation from the Regulators and discuss the implications of current regulatory announcements on PPI.

Angie Burgess, Cardif Pinnacle’s National Sales Manager: “As part of our continued drive to assist our partners and support the industry, in understanding and interpreting the latest regulatory thinking, we are delighted to receive speakers from the main bodies associated with our business. It’s crucial that we keep abreast of the regulatory changes that affect all of us and understand their potential impact, so we can work together to tailor our businesses effectively to meet them.”

The Seminar, entitled “Understanding the Regulatory Environment” will be held at Arsenal’s new Emirates Stadium, on 26 October, 2006. Anyone wishing to attend can contact Angie Burgess, Cardif Pinnacle’s National Sales Manager, details are on their website.

Sorry about the predictable pic and headlines - I feel like I could get a job working for the Sun!

Anyhow, following up on my recent post post detailing the listed companies dealing in secured loans, I thought I’d give you an update on Cattles PLC, who reported their Interims this morning. In my original post it appears I was slightly inaccurate in my assesment of their involvement in secured loans. I originally posted their only involvement was via their Dial4aloan brand, but it appears, in partnership with the Alliance and Leicester, Cattles are also growing a brand called Welcome Financial Services. To quote from this mornings results

“The re-organisation and integration of Dial4aloan into the consumer credit division was successfully completed last year. This operation also provides the division’s existing customer base with 3rd party re-mortgage facilities under the trading style Welcome Mortgages, and currently introduces new business volumes of around £10 million per month to external mortgage lenders on a commission basis.

As previously reported, Alliance and Leicester has established a partnership with Welcome Financial Services, to launch its new secured 2nd charge ‘Homeowner Loan’ product. Alliance and Leicester is undertaking the related marketing activity for this product and Welcome Financial Services is managing the application process and customer relationship management. Sales so far have been small as Alliance and Leicester gain experience in marketing to this segment and together we refine the sales fulfilment process. A number of enhancements are planned for the remainder of 2006 to build on current performance.