HMRC proposes selling taxpayers' financial data to third parties

Under proposals currently being considered by HM Revenue & Customs (HMRC), anonymised financial data from taxpayers could be purchased by third party private companies, researchers and public bodies. Last week, a spokesman from HMRC stated that ‘no firm decisions’ had been taken on the issue, but that the confidentiality of taxpayers’ data would remain of the utmost importance. Despite such reassurances, former Conservative MP, David Davis, has branded the proposals as ‘borderline insane’. Indeed, HMRC does not have an unblemished record when it comes to dealing with confidential data. In 2007, HMRC lost computer disks containing confidential details of approximately 25 million child benefit recipients.

According to HMRC documents, plans for ‘charging options’ are being considered, meaning that firms may be required to pay HMRC to access the data. Consultations for the relaxation of HMRC data-sharing rules began last July, but concerns have been raised over such plans in light of a similar and currently suspended NHS initiative proposing the sharing of anonymised NHS medical records.

Speaking to the Guardian about HMRCs data-sharing proposals, David Davis said, ‘The officials who drew this up clearly have no idea of the risks to data in an electronic age’. Meanwhile, Emma Carr, deputy director of civil rights campaign group, Big Brother Watch, has said, ‘Given the huge uproar about similar plans for medical records, you would have hoped HMRC would have learned that trying to sneak plans like this under the radar is not the way to build trust or develop good policy’. A spokesman from HMRC, however, stated, ‘HMRC would only share data where this would generate clear public benefits, and where there are robust safeguards in place’.

Calling time on premium rate calls for consumers

 

On 14th April 2014, the UK Financial Conduct Authority (FCA) hit out against financial services firms, including high-street banks, charging customers premium telephone rates for after-sales customer care or complaints and announced its plans to launch a consultation on the issue later this year. Many financial services firms provide, particularly for existing customers, premium rate telephone numbers for consumers which can turn out painfully expensive when a simple query unexpectedly turns into a drawn out call where customers are put on 'hold' or passed to a different department or more senior call-taker (sounding familiar?).

The FCA's consultation will propose that rules relating to charges for customer services or complaints are standarised and capped at the cost of a basic rate telephone call. The consultation will also seek to examine a range of proposals aimed at improving complaints handling by financial services firms, and, amongst other points, look at issues regarding complaints records and respond to recommendations proposed by the Parliamentary Commission on Banking Standards last year.  At present, companies authorised by the FCA are required to provide customers with a free channel for making a complaint, however, this could be in the form of an email address or by post rather than a free telephone number. The FCA's announcement yesterday refers to a campaign led by consumer group Which? calling for principles relating to telephone calls outlined in the forthcoming EU Consumer Rights Directive coming into force this summer  to be applied to financial services firms used by millions of consumers across the UK.

 

Christopher Woolard, the FCA’s director of policy, risk and research said yesterday, ‘It is not fair that customers often have to use expensive phone lines when calling firms to ask for help or to complain...We would welcome companies looking again at the rates they charge for phone calls ahead of our consultation’. Which? executive director, Richard Lloyd welcomed the FCA’s announcements stating, ‘We're pleased the FCA agrees customers shouldn't have to pay a premium to talk to their bank or insurer. Changing the rules so financial firms can only offer basic rate helplines would be a big win for the 87,000 people who supported our campaign’.
 

9 million Britons in serious debt according to Financial Conduct Authority

The UK Financial Conduct Authority (FCA) watchdog has today, 1 April 2014, announced that approximately nine million Britons are in serious debt, with the problem spanning across all income levels. In a report called ‘Consumer credit and consumers in vulnerable circumstances’ (the ‘Report’), which publishes findings from the Government’s Monetary Advice Service, has also revealed that of the 9 million Britons in debt, only 1.5 million have sought advice on their debts and 1.8 million are in denial about the state of their finances.  

According to the Repot, over the last two decades, the UK population has become increasingly more indebted, primarily owing to a significant increase in mortgage debts. In its entirety, the UK owes approximately £1,476 billion, an average of nearly £56,000 per household, £6,000 of which can be attributed to consumer debts. The most common factors contributing to unmanageable debt are, according to the Report, a change in circumstances and high levels of accumulated debt. Low savings, income volatility and high debt/income ratios have all been found to reduce people’s resilience to income shocks and increase the likelihood of problem debt occurring. The Report categorises borrowers into three distinct types, survival borrowers (who use credit for their day to day expenses), lifestyle borrowers (who use credit for large and/or one-off events) and reluctant borrowers (who tend to limit their use of credit) and suggests that debt problems can be further compounded by an individual’s skills, knowledge, confidence and biases, as well as through a lack of access to credit. Indebtedness has also been found to have a detrimental impact on people’s health and well-being, particularly in respect of mental health issues including anxiety, stress and depression.

The Report has been published on the day that the FCA has taken over the regulation of the UK’s £200 billion consumer credit industry from the Office of Fair Trading. Over 50,000 businesses, including 500 payday loan companies will now be regulated under the FCA’s new rules aimed at ensuring customers are treated fairly and given the information they need to help them make informed choices. Martin Wheatley, the FCA’s Chief Executive acknowledged, “We have a big task ahead; it’s our job to make sure firms put their customers at the heart of their business and don’t just see them as an easy target or a profit line”. Wheatley also indicated the FCA’s approach to consumer credit providers who fail to follow their new rules, “We won’t shy away from taking tough, decisive action to make sure that the people who rely on these products are treated fairly.  There will be some firms that don’t get the message, or won’t play ball, those firms should know that we won’t let them carry on”. In the run up to today, the FCA has been assessing the market to understand where and how the worst financial detriment occurs and will use the findings from the Report to further develop its regulation of payday loan companies and the consumer credit industry as a whole.