We're calling on the financial regulator to take action on '0% balance transfer' credit card deals after discovering that only one in 20 people understands their true cost.
As part of our campaign we asked people how much a balance transfer would cost - only 4% of them got it right. Seven in 10 wrongly thought the transfer was free, even though we showed them the fee.
We also asked people to pick the cheapest credit card deal for someone making a balance transfer, but only a third picked the correct card.
Read more results from our '0% balance transfer' credit card research
We've shared this evidence with the Financial Conduct Authority (FCA) requesting that balance transfer fees be included in its investigation into the credit card market. Ultimately, we want the FCA to take action, including the possibility of banning credit card firms from advertising deals as '0%' when there's a fee.
Our Executive Director Richard Lloyd said:
'Too many credit card deals appear to include sneaky fees designed to catch customers out. With millions now using credit cards to pay for essentials, it's vital that the Financial Conduct authority takes action to ensure consumers are well protected.'
If you too want the regulator to take action on balance transfer, sign our petition to Stop Sneaky Fees and Charges.
Our latest research has unearthed the eye-watering fees that some car insurers are charging. Some of which don’t reflect the actual cost to the company.
As part of our campaign to Stop Sneaky Fees and Charges, we looked at the different types of admin fees charged by car insurers. We found fees can vary widely, with some insurers charging more than double the average for certain fees.
There are fees to change your name or address, for paying monthly or by credit card, for setting up or renewing premiums and for cancelling policies.
The highest fee we found was £75. IGO4 charges this much if you want to cancel during the 14 day cooling-off period. Budget, Endsleigh and IGO4 all charge £75 for ending your policy early, whereas the average cost is £49.55. Age UK, NFU Mutual, Volkswagen and Volvo don’t charge any cancellation fees for ending a policy early.
With such a huge variation between providers, we want the companies using rip-off fees to justify why they’re charging such a high amount for what are, in some cases, simple policy changes.
All fees associated with setting up, amending or duplicating any type of insurance policy should be reasonable and no more than the cost to the company. We also want companies to set out all fees and charges clearly so you can easily compare between providers.
Our executive director Richard Lloyd said:
‘We want companies to ensure their fees reflect actual costs and aren’t just a way to squeeze more money from customers.’
If you agree and want to stop sneaky car insurance fees and charges, join more than 55,000 others by signing our petition.
If you can’t afford to pay annually for your cover consider using a 0% credit card (with at least 12 months of interest-free purchases). You may face a credit card fee, and it isn’t something you can do every year, but it should be cheaper overall.
Many companies charge you to make adjustments to your policy if you call them on the phone but allow you to change your policy online free of charge.
With car insurance being ultra-competitive you may be able to beat the fees by bartering. Call your insurer and haggle over the fees – even threaten to leave – and see if you can get them dropped.
We also have advice on finding cheap car insurance.
In today's Budget the Chancellor has announced proposals to change confusing mortgage fees that can leave people paying over the odds.
As the progress report (below) details, Which? has been working with the Council of Mortgage Lenders (CML) to simplify the bewildering range of complicated fees and charges in the market. These changes should be in place by the end of 2015.
The report outlines the key proposals for change, which are:
- Introducing a common approach by lenders to make their "tariff" of fees and charges available to customers to avoid confusion and make it easier to find information about mortgage costs;
- Wider use of consistent terms to describe the same types of fees and charges that currently have an array of different names;
- Better explanations of whether fees are compulsory or avoidable and when they will be charged;
- Clearer ways of presenting information to help borrowers compare the cost of particular mortgage deals over specific periods, not just the upfront costs.
In July Which? and the CML will publish firm proposals and a timeline for implementation.
In good news for our Sneaky Fees and Charges campaign, Barclays has announced that it has simplified its mortgage fees.
Over the last 18 months Barclays has reduced the number of fees and charges on its mortgages from 21 to six.
The changes include:
- £150 withdrawal fee removed
- Final Repayment Charge reduced from £275 to £80 for new mortgages
- £25 charge for additional requests for information removed
- £100 arrears litigation and enforcement fees removed
- £150 further advance admin fee for new mortgages
Our research published last month found that there were more than 40 different fees and charges across the market.
We've been campaigning for George Osborne to make it easier for people to compare the cost of mortgages.
In a win for our campaign, the Chancellor announced in the Autumn Statement on 3rd December that he has asked the industry to work with Which? to develop new guidance on how fees should be displayed and charged. We will report back to the Chancellor within six months.
The Chancellor has today announced that the Council of Mortgage Lenders (CML) will work with us to consider practical solutions to end mortgage confusion for consumers.
On 3 November we called on the Chancellor to use his Autumn Statement to Stop Sneaky Fees and Charges on mortgages and make it easier for people to find the best deal. More than 45,000 people signed our petition and 3,000 emailed their MP to ask the Chancellor to take action.
Over the next few months we’ll be working with the CML to consider practical solutions for the following issues:
a) transparency and presentation of fees and charges to help improve consumer outcomes;
b) standardisation of terminology around fees and charges;
c) consumer education;
d) setting administrative charges so that they reflect the cost to the lender.
Our executive director, Richard Lloyd said:
'This is good news for the thousands of consumers who supported our call for the Chancellor to end confusion about the full cost of taking out a mortgage. With so many people on tight budgets trying to get a foot on the housing ladder or looking to remortgage as rates rise, it's essential that they can more easily find the best deal.'
He added: ‘We look forward to working with the Council of Mortgage Lenders to simplify the wide range of complicated fees and charges in the market so that borrowers don't pay over the odds on their loan.’
We’ll be reporting on progress by Budget 2015 and will look to produce a programme for future action.
We're calling on George Osborne to use his Autumn Statement to Stop Sneaky Fees and Charges on mortgages and make it easier for people to find the best deal.
Our latest research on the mortgage market uncovers the complex and unclear mortgage fees and charges people are facing. We found more than 40 fees and charges across the market, including set up fees, arrears fees and final repayment fees. Some providers use different names for the same or similar fees – for example a booking fee can also be called a reservation or application fee.
We want George Osborne, in his forthcoming Autumn Statement, to:
Given the limitations with APR, the Government and the FCA should explore other ways to present the total cost of a mortgage.
All compulsory fees payable throughout the deal period should be expressed as a total of fees and included in the advertised costs. It should also be clear which fees payable over the life of the mortgage are compulsory and which are not.
Non-product fees and charges that are incurred after the purchase of a mortgage should reflect lenders’ actual costs.
Our executive director, Richard Lloyd said:
'Homeowners could be paying over the odds for their mortgage because of the complex range of fees and charges that prevent them from finding the best deal.'
He added: 'The Chancellor must act now to Stop Sneaky Fees and Charges and end mortgage confusion for consumers. The Government and the regulator should also explore better ways of presenting the total cost of mortgages.'
You can help by signing our petition and supporting our campaign.
Our research shows that around 2.5 million people used an unauthorised overdraft in the last 12 months and more than two thirds think charges are too high or unfair.
Around a third of people are surprised by the amount they're charged when going overdrawn, so we're calling for banks to tackle the fees and charges associated with unauthorised overdrafts.
Our executive director, Richard Lloyd said:
'Consumers are fed up of being hit by complex and costly charges which make it almost impossible for them to shop around for the best deal for their needs.'
We’re calling on all banks and overdraft providers to sign up to, promote and encourage their customers to use the Government’s midata scheme, which would allow people to compare the amount they would be charged in bank fees between different accounts.
We also want providers to allow their customers to opt-in and opt-out of unauthorised overdrafts at no extra cost, with opt out being the default option when the account is set up.
Campaign supporter Yvonne told us: 'I've been stung with bank charges for being over drawn for less than £1 for less than a day!'
We want all banks and current account providers to Stop Sneaky Fees and Charges and put an end to excessive, unclear and hard to compare unauthorised overdraft fees that could leave consumers paying over the odds. You can help by signing our peition and sharing your exmapels of sneaky fees.
Almost half the population have paid a fee or charge on a financial product or service in the last year, and two thirds think that companies use separate fees or charges to trick us into thinking that the cost is cheaper than it is.
These findings are backed-up by our car insurance investigation which finds that fees have been on the rise while premiums have been falling.
Nearly half of the 28 car insurance providers we looked at have increased administration or cancellation fees since our previous survey three years ago, increasing by as much as 200% in one case.
We found Endsleigh's cancellation charge has tripled to £75, a huge 200% increase, while Churchill and Privilege have doubled theirs.
Six companies: Churchill, LV, More Than, Nationwide, Privilege and Saga - have increased fees to make changes to a policy by at least half, such as getting married, changing job or moving home.
Our executive director, Richard Lloyd said: 'Consumers are fed up with being hit with unexpected, additional costs for financial products that lead to them paying more than they bargained for. These fees can be hard to avoid, and people often don't know what they're really paying for.'
We want the financial services industry to Stop Sneaky Fees and Charges, and put an end to excessive, unclear and hard to compare fees that do nothing to improve the low level of trust in these markets. You can help by signing our petition and sharing this campaign with your friends and family.
Payday lenders have refused to act following our legal letters to reduce their default fees. We're now calling on the financial regulator to intervene.
We're calling on the Financial Conduct Authority (FCA) to get tough with the payday lenders we believe are charging excessive fees for late payments. We wrote to the lenders in January 2014 but have received no commitment for action from the lenders themselves.
Which? executive director, Richard Lloyd, said: 'It's outrageous that lenders are charging excessive fees which tip people into further debt.'
Find out more about our Clean up Credit campaign
Drivers are being stung with a range of additional fees when they come to renew their car insurance or even to change details on their policies, according to new Which? research.
We looked at the additional charges levied by 37 car insurance providers and found that some punish loyal customers, or put you out of pocket if you move house, change car or get married.
Of the policies we analysed, you'll be likely to have to pay £19 on average if you need to change some details on your policy. Just over 20% of the insurers we looked at, including AXA and Swiftcover, let you do this for free.
Find out more
Which? campaigns to make people's lives simpler and fairer. Get involved in our latest campaigns and find out how to take action. Let's make change happen.