The financial news you need to know with Sarah Pennells – April 3rd 2018

Sarah Pennells is a personal finance journalist and the face behind SavvyWoman.co.uk. We think she does a great job at explaining financial subjects in a very clear and accessible manner. You can find her column below where she writes about the latest financial news, and helps you get more from your money.

Over £236 million stolen in ‘push payment’ fraud

New figures show that over 35,000 people lost an average of £2,784 each through authorised push payment fraud. This is where fraudsters trick people into making a payment to another account – usually by online or telephone banking. According to UK Finance, which compiled the data, only a quarter of the money stolen was returned to customers.

Under the current rules, banks aren’t generally liable if you transfer money to a fraudster’s account, even if you thought you were paying someone genuine at the time. And, because payments between banks are often made within minutes, the money usually disappears before anyone realises they’ve been scammed.

The payment regulator is looking at introducing a code so that victims of this kind of fraud could get their money back. But it won’t be introduced for sometime.

So what should you look out for? Here are some of the most common examples of push payment fraud:

  • Paying the deposit when buying a property: Normally, when you buy a property, you use a solicitor to sort out the legal side of the process, and you pay the solicitor the deposit (typically 10 per cent) which he or she then passes onto the seller. Fraudsters have realised that this is a potentially lucrative source of money and are either hacking solicitors’ emails or those of the buyer. Either way, they send plausible looking emails to homebuyers with details of the bank account they should pay the deposit into. The payment’s made and the money disappears. Some buyers have lost over £100,000 in this way.

What you can do: Discuss how you’ll pay the deposit and other costs and get the solicitor’s bank details early on (not at the last minute when you may be under pressure!). Tell the solicitor you won’t respond to any emails that say their bank details have changed. If you get an email like this, even if it looks plausible, check with the solicitor. Either ring them to check the bank details are correct (on a phone number you’ve contacted them on before), or make a small test payment of a few pounds. Check that the test payment has arrived.

  • Paying a builder: This works in the same way as property deposit fraud, except – generally – the amounts are smaller.

What you can do: As before, check the bank details with the builder by phone and be wary if they tell you their bank details have changed.

  • The technical helpline/broadband problem scam: There are variations of this scam, but essentially, a fraudster calls up and tells you there’s a problem with your computer, broadband or Wi-Fi router, and that they can help you sort it out. They pretend they’re from a company like BT, Microsoft or Talk Talk (there was a sharp rise in these calls after the Talk Talk hack in 2015). You’re tricked into giving the fraudster remote access to your computer and they get you to transfer money from your account. They may have information about you, which makes the fraud even more convincing.

What you can do: Don’t give remote access to your computer to anyone who calls you out of the blue, even if they’re from a company you deal with and they sound plausible.

SAVVY TIP: If you think you’ve been scammed, contact your bank as soon as possible. It may not be able to get the money back for you, but the faster you act, the better the chance you have. Tell Action Fraud as well (actionfraud.police.uk). If your bank refuses to give your money back, complain to the Financial Ombudsman Service. In some cases, they have asked banks to reimburse money that’s been stolen, even where the fraud has been ‘authorised’.

Mind the gender pay gap

Companies that employ 250 people or more had until April 4th to report their gender pay gap. Some banks have reported a gender pay gap of over 45 per cent, while others have a pay gap of only two per cent.

Having a large gender pay gap doesn’t mean a company is paying women less than men for doing the same job. What it does show is that the average that a female employee is paid is less than the average that a male employee is paid. As part of the reporting, companies also have to show how much less women receive, on average, as a bonus and the percentage of women and men in each earning band.

I’ve been keeping a fairly close eye on this, and, although the way these figures are compiled isn’t perfect, it will help companies to focus on how they recruit and pay staff. Nothing like going public with some news you’d rather keep quiet about to focus the mind!

As part of the gender pay gap reporting, they must publish their report on their website and explain how they plan to tackle their own gender pay gap.

At SavvyWoman, we carried out some research and we found that over 40 per cent of people would consider switching their bank if it had a large gender pay gap. Over half of women (51 per cent) said they’d consider switching, compared to over a third of men (37 per cent). Millennials were far more likely to switch bank (57 per cent said they would consider it) compared to those aged 55 or over (only 36 per cent).

If you want to find out about the gender pay gap at banks, card companies and insurers that you use, go to gender-pay-gap.service.gov.uk

Energy firm feels the heat from the regulator

Energy firm Iresa has been banned from taking on new customers, or from asking existing customers to increase direct debits or make one-off payments. The regulator, Ofgem, imposed the three-month ban because of the company’s poor customer service.

Calls and emails went unanswered and vulnerable customers weren’t identified (there are schemes that mean they should be a priority if there’s a power cut, for example). If you have a look at what customers are saying about Iresa on review sites, you’ll get an idea of some of the issues they’ve encountered.

Ofgem says that Iresa must reduce call waiting times to below five minutes (that still seems pretty long to me!) and reply to emails within five working days. If the company doesn’t improve it could be in danger of losing its licence. That would mean it wouldn’t be able to supply energy and customers who are with them would automatically be transferred to a different supplier.

SAVVY TIP: One of the issues seems to be that customers have tried to give meter readings, but have received much higher bills based on estimated readings. If you pay by monthly direct debit, energy companies can ask you to increase the amount you pay if it’s not enough to cover your usage, but if you think you’re paying too much, you can ask them to explain the increase. If you’re still not happy, complain to the company and to the Energy Ombudsman if you don’t get anywhere. Finally, if you think your energy company (or anyone else you pay by direct debit) is taking money by direct debit you’ve not agreed to, then under the direct debit guarantee, you can ask your current account provider to refund the money. They can then claim it from the company in question.

Car hire websites must be clear about upfront costs

I don’t know about you, but one of the most frustrating things about booking a holiday is trying to get a good deal on car hire. Holiday car hire has become somewhat notorious for all the hidden extras that you can be asked to pay at the last minute.

It’s a long-running problem, but it has been improving in recent years. In 2015 the regulator, the Competition and Markets Authority, forced the big car hire companies to be clearer about their costs and later turned its attention to some of the other names. Now it’s told three car hire comparison websites that they too must give people all the information about costs of car hire upfront. Weholiday.co.uk, affordablecarhire.com and flexiblecarhire.com have all agreed to show any costs that you have to pay, upfront.

The CMA says that overseas-based car hire companies are next on its list.