The government is today under significant pressure regarding the Student Loan Company with expectations that applications will number twice that of last year and the system will be unable to cope with his excessive demand. The government has already sent in PricewaterhouseCoopers to audit the company amid claims that the government was warned 12 months ago of the impending fiasco and has done very little about it to date.
Sean Fitzpatrick, the former head of Anglo-Irish bank, has today been released from police custody where he was being questioned regarding alleged financial irregularities at the banking institution. Mr Fitzpatrick left the company back in December 2009 amid allegations regarding the concealment of personal loans from the bank. The investigation into Anglo-Irish bank led directly to the economic crisis in Ireland and the nationalisation of the bank in 2009.
The Ministry of Justice, the government body which regulates claims management firms, has today announced that Cartel Client Review based in Manchester has had its authorisation suspended which will effectively close down the firm. This is a company which was recognised as one of the largest claims management companies in the UK and to which many customers have paid £495 in the hope of having their debts written off.
The Consumer Credit Counselling Service has revealed a 25% increase in calls during 2009 to a record 335,000. However, while it is encouraging to see people making use of various debt advisory services it is concerning that just 25% of those who called the Consumer Credit Counselling Service were in a position to repay their debts. This leaves a massive 75% drowning under increasing debt and the pressures which come with these very difficult situations.
The fallout from the UK government's £270 million loan guarantee to GM Europe continues to grow with some experts concerned at the timing of the move. As we approach the next general election there are concerns we are entering an MG Rover type scenario although in reality it is wrong to compare the two operations even at their lowest point. So was the UK government right to guarantee a £270 million loan to GM Europe?
Inter-dealer broker Tullet Prebon, which arranges trades between market participants, has today warned that it expects a second crisis to hit the worldwide economy in 2010 caused by sovereign debt defaults. This is an unwelcome reminder that many governments around the world have seen their finances stretched to breaking point and indeed some countries may default on their sovereign debt in 2010.
The Citizens Advice Bureau (CAB) took a massive 6.8 million inquiries last year as more and more of the UK population began to feel the financial pinch. This is a service in the UK which has for many years been neglected by consumers but appears to be back in favour due to the economic downturn. While the vast majority of inquiries received were in relation to debts there were also a large number of inquiries regarding benefits, tax credits and rising fuel bills. It seems that finally some consumers in the UK are prepared to take advice and take action before it may be too late.
Over the last few months we have seen a number of financial initiatives from the UK government and the Bank of England as the authorities attempt to increase liquidity in the UK marketplace. However, so far UK banks have been unwilling or unable to increase liquidity to a level which will allow the property market, the business market and the consumer market to improve. As a consequence we are likely to see a number of new initiatives and new pressures placed upon the financial sector to increase liquidity in the short term.
The majority of people in the UK are likely to have some form of mortgage, possibly a personal loan, credit card and perhaps an overdraft. While unlikely at the moment, many of us will at some point possibly come into money and have the chance to pay off a large part of outstanding debt. In this situation it is vital that you pay off the debt which attracts the highest interest as opposed to perhaps overpaying on your mortgage when you are up to date and the rate is relatively low compared to credit cards, personal loans and overdrafts.
A 78-year-old "loan shark" today walked free from court despite the fact she had been found guilty of money lending without a licence, to the tune of £33,500. It is believed that interest rates in excess of 300% per annum were being charged to some clients with allegations of intimidation from some customers. Despite being found guilty of illegal loan sharking, Joan Fionda was given a 12 month community and supervision order due mainly to her age.
