Debt Consolidation – Put all your debts in one basket

Debt Consolidation UKThe global meltdown that started with the subprime crisis in the US had its cascading effect on many other economies since we are in an era of connectivity and the world is a global village. The financial problems of one country cannot be wished away since there is bound to be some fall out in other countries and that is what the world experienced after the collapse of some of the financial institutions in the US.

UK too had to bear the brunt of this not only due to the general financial crisis linking its own banks and lending institutions but also because of poor management of finance and indiscriminate extension of credit to people who in the first place did not qualify for them. The net result is that there are many in the UK who have run up huge debt and are now wondering how to get out of this trap they have led themselves into. Many are seeking counseling from finance experts and are trying to exercise options suggested by them such as debt consolidation as nobody wants to declare themselves bankrupt and face a whole different set of problems down the line.

However, the positive thing for UK residents is the existence of an instrument called debt relief order whereby people with no tangible assets and very little income can buy time for up to a year to either pay up whatever he or she can or have the debt written off after a year. During this period, the creditor is not allowed to take any action against the defaulter. This scheme does have a limit and other conditions that need to be satisfied by the beneficiary, but at least there is a mechanism in place.

The UK is also different in the sense that the government makes available many social health programmes and also takes it upon itself to solve problems of debt or insolvency of its citizens.

Another option is that of debt consolidation.

Under debt consolidation, the borrower takes a loan at a much lower interest rate and makes use of it to take care of other debt. This is an effective way to handle or settle credit card as well as other overdrafts. This instrument can also be used for personal requirements such as purchasing a vehicle, renovating the house or taking a vacation.

This debt consolidation loan can be of two types – the secured and the unsecured. In the former case, you are required to provide some security which can be in the form of the house, car or some other real estate papers and so on. The tenure of the loan you can take under this can range from between five to thirty years and you can draw between £3000 to £50,000. The only aspect to take care is that of repossession of the security by the lender in case of any default.

In the latter case or the unsecured debt consolidation instance, the loan tenure is a short one of between five to ten years and the amount that can be drawn is between £3000 to £25,000. The interest rate is higher in case of the unsecured one, since the lender is exposed to a higher risk.

Identity Theft – Don’t be a victim

Identity Theft – Don’t be a victim

identity theftThe problem of identity theft in the UK is a serious one and many individuals as well as businesses have had to face this scourge and are always apprehensive about how to make sure they avoid this specter of finding out suddenly one day that their identity has been impersonated due to their carelessness or due to the carelessness of some retail store, bank or government body.

The most prevalent kind of identity theft is the financial one where criminals take on the identity of an individual in order to get financial gains through goods, services or pure cash. In the business world, these criminals clone a particular business unit or organization to gain financially.

Other kinds of identity theft include simple impersonation by a criminal when he or she is apprehended. Some resort to this in order to gain benefits of medical treatment in certain countries that require the individual to have health insurance cover. Some cases of total identity cloning have also come up but fortunately they are quite rare.

Some recent instances in the UK include the theft of some 25 million records from the HM Revenue and Customs, the loss of a laptop that contained about 11 million records pertaining to the Nationwide Building Society, more than 3 million personal details of learner drivers that were again put to great risk when the computer of the third party agency working for Driver and Vehicle licencing organisation went missing and credit card details of customers stolen from the retail store TK Maxx.

So what is the importance of personal identity and why do criminals find this to be a lucrative opportunity to make money?

Well, since we still do not have a single document in the UK that can be used all across the country to prove one’s identity, many organisations are compelled to use personal details like the name, address, place and date of birth and so on through a whole host of papers such as the passport, driving licence, marriage certificate, bank and utility statements etc. These documents tell authorities who you are and unlike DNA, fingerprints which cannot be duplicated are used by criminals to access information and become that person in order to gain financial benefits or to perpetrate frauds. You therefore have somebody opening a bank account or accessing a loan using your identity or somebody getting credit cards making use of your personal details and running up huge spends on it at your expense. Other more serious cases of illegal immigration, money laundering, acts of terrorism have also occurred due to identity theft taking place.

Though organisations are putting in place various check mechanisms to prevent such frauds from happening, more needs to be done to eliminate this problem totally.

On a personal level, if you suspect your identity has been compromised, you should do the following immediately:

  • Get the latest credit history report so that you know whether any attempt has been made to acquire loans using your personal information. It also gives your updated outstanding debt as accumulated by you.
  • Contact the banks where you hold accounts and the building society to verify whether any financial impropriety has taken place.
  • Contact all utility agencies such as electricity, water, cable television, internet etc and check with them about any attempts having been made by anybody to change current arrangements.
  • Get your computer thoroughly checked by a professional for any leakage or spyware that may have been introduced to get access to any of your records.

In terms of what you can do to ensure that your identity is not stolen or compromised, you need to pay attention to the following:

  • Tear up, shred or burn receipts which display your card number
  • Make sure you do not use the same password for all accounts
  • Do not use your mother’s maiden name or your birth place as security passwords
  • Beware of phishing mails and do not respond to them.

Most importantly, if you find out there has been an identity theft,  it is essential to remain calm and keep copies of all documentation you have exchanged with the various government and other authorities for future reference if required in order to fight any legal battle.