Weekly Money: round-up of the personal finance stories you may have missed 3-7 November

Booming alternative finance; current account probe; payday loan ad banned; tax avoidance; energy bill woes: doorstep crime; the stories we noticed this week

7 November

Alternative finance such as peer-to-peer lending and crowdfunding is doubling in size every year and could reach £4.4bn in 2015. Some £1.74bn will have been raised by the end of 2014, according to a study by the University of Cambridge published today, but that’s set to more than double next year, reckons Nesta, an innovation charity.

Its report suggests that the alternative finance market – which allows investors direct access to borrowers - has more than doubled in size year on year from £267m in 2012 and £666m in 2013, to £1.74bn this year.

Liam Collins, the report’s co-author, said: “These findings shed light on a growing movement that is revolutionising banking, investing and giving by using technology to simplify the links between those who want to invest money and those who need it.”

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Peer-to-peer firm Lending Works has today improved the protection given to investors by launching extended insurance for all its loans.

The company says the policies will safeguard savings against the risk of borrowers not repaying loans, because of accident, illness, death or job loss. The move is designed to reassure potential investors, worried about the higher-risks associated with peer-to-peer lending.

“Consumers still worry about how safe their money will be if they choose peer-to-peer over a bank’s savings account,” pointed out Lending Works’ chief Nick Harding. “Without action this is a stigma that we risk, as an industry, not being able to shake.”

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Britain’s landlords will own property worth more than £1trillion by next year, reckons the Kent Reliance.

The value of property in the private rented sector has already reached £930.7bn, up £109.5bn in a year.

6 November

There was more bad news for banks this morning after The Competition and Markets Authority confirmed that a full competition enquiry will be launched into current account and small business banking markets.

The investigation had been mooted in July, so today's announcement came as little surprise.

It will look into the difficulties customers face in switching banks, and the lack of smaller competitors to the "big four" High Street names.

The CMA confirmed it has launched a full enquiry into current accounts because of low levels of switching, limited transparency, and barriers to entry.

But, crucially, the CMA says there's been very little movement over time in the market shares of the 4 largest banks.

Alex Chisholm, CMA chief executive, said: "Effective competition in retail banking is critically important for individual bank customers, small and medium-sized businesses, and the wider economy.

"After carefully considering the consultation responses, most of which supported a market investigation, we remain of the view that there should be a full market investigation into the sector, conducted by a Market Reference Group drawn from the CMA's expert panel of independent CMA members.

"The Market Reference Group will investigate in detail and decide what action, if any, may be needed to improve competition for the benefit of personal and small business customers."

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Coventry Building Society has today launched a Centenary Poppy Bond, a savings account that offers a decent rate while raising cash for The Royal British Legion.

You’ll need to lock your cash away until 31 December 2017 but in return you’ll be paid a fixed 2.4 per cent gross each year on your savings.

Meanwhile the building society will make a donation to The Royal British Legion equal to 0.15 per cent of the total balances invested by December this year.

The Coventry has launched similar accounts every year since 2008 and has so far raised more than £10m for the Royal British Legion.

To apply online for the account go to www.thecoventry.co.uk

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As the weather worsens, the number of warnings about hard-pressed people facing energy bill woes grows. More than 15 million households plan to ration their energy use this winter because of sky-high energy bills, reckons uSwitch today.

Yesterday Citizens Advice warned that eighty percent of low income households are worried about energy bills. Meanwhile 21 million people would struggle to pay their energy bills if they went up, with one in six already struggling, according to MoneySupermarket. And, frighteningly, one in ten customers owes their energy supplier money, on average £239, said GoCompare.

Anger grows as wholesale prices – which make up around half of an energy bill – have continued to fall in recent months. However, the lower costs are yet to be passed on to hard-pressed consumers.

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The average annual premium for a buildings and contents insurance is now £294, says the Association of British Insurers.

5 November

Will they never learn? A company which offered payday loans so that people could use the cash to “put towards a ‘Kiss Me Quick’ hat for the beach” has been criticised today.

Cash Converters - which also offers longer-term loans and pawnbroking services - sent out a summer mailing with the offending message.

The ad also suggested that the cash borrowed could be used for a barbecue or to help parents with “kids to entertain”. But it’s been banned by the Advertising Standards Authority for encouraging frivolous spending.

The ASA said any loan should be taken only after careful consideration and that firms flogging credit should advertise those products responsibly.

The Authority told Cash Converters “to ensure future advertising was prepared with a sense of responsibility to consumers.”

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Independent energy company First Utility has promised to cut switching time in half from next week. The company has been pushing for faster switching so that consumers don’t have to wait weeks to benefit from better deals.

From 10 November it will cut the time it takes to switch from five weeks to two and a half. Other suppliers have until the end of the year to cut their switching times. Ian McCaig, First Utility’s chief, said: “By making it easier to switch, more people will seek out the best deals and help reduce their bills.”

The Government hopes eventually to force gas and electricity firms to reducing switching time to just 24 hours.

4 November

Doorstep crime is getting worse. Older people in particular are being targeted by unscrupulous crooks who knock on their doors and pressure them into paying extortionate prices for unnecessary jobs or goods.

Take the case of Elizabeth Arnold who lives in north London. She was targeted by serial conman Adam Rafferty. He turned up at her house offering to do a minor repair in return for her agreeing to have an advertising board outside her home.

But he told the 89-year old she needed to spend £15,000 to repair a damp problem. The scam only came to light when bank staff raised the alarm when Mrs Arnold turned up to collect the cash to give to the crook. He was jailed for 18 months this summer.

Or what about builder John Jenkins who fleeced a pensioner out of her life savings, which totalled half a million pounds. She had wanted a little work done but he persuaded her to do more and more and charged the earth for it. In fact it was estimated he had done £60,000-worth of work and charged her some £530,000.

The crime was only discovered when his victim was forced to ask a neighbour for money to buy food. The crook was given a six year jail sentence this year. The stories emphasise why we have a responsibility to look out for elderly neighbours. It’s the theme of National Consumer Week, which runs until Friday.

The ‘Good Neighbours Stop Rogue Traders’ campaign is being run by Trading Standards and Citizens Advice to encourage us to look out for signs that a neighbour may be being targeted by doorstep criminals and to step in and alert the authorities.

Signs an unwanted doorstep caller may be visiting a neighbour include the sudden appearance of a workman’s van or ladders or scaffolding on their property. Call the Citizens Advice consumer service on 03454 04 05 06 for more information or help.

3 November

Criminals are using a new scam to make the people they are phoning believe they are speaking to a trusted organisation – like a bank – by fooling their phones into displaying any number the fraudster chooses.

The scam, known as ‘number spoofing’, works by fraudsters cloning the telephone number of the organisation they want to impersonate and then making it appear on the victim’s caller ID display when they phone them. The criminal will then gain the person’s trust by drawing their attention to the number, claiming that this is proof of their identity, before trying to defraud them.

Once criminals have their victim’s confidence they will try to extract information such as the victim’s PIN or online passwords and use these to steal from their account.

Financial Fraud Action UK’s (FFA UK) intelligence unit – the Financial Fraud Bureau – says the scam has become increasingly common in recent weeks. Whilst the technology needed to spoof someone’s number has existed for years, only recently have criminals begun using it to defraud people.

The advice to beat the scam is simple – never assume that someone is who they say they are just because their number matches that of an organisation you know. In fact, if someone tries to draw your attention to the number on your caller ID display, you should immediately become suspicious.

Similarly, you should be suspicious if you’re asked for your four-digit PIN, your full online banking passwords, to transfer or withdraw money, or to give your card to a courier. Your bank or the police will never ask you to do any of these things.

Craig Jones, spokesperson for FFA UK, said: “Number spoofing is becoming increasingly common and it’s not difficult for the criminals to fake a caller ID. So if a number appears on your phone’s caller ID display, you shouldn’t assume you know where the call is being made from. Remember that if a caller is trying to draw your attention to the number on your phone display, it’s very unlikely the call is genuine as there is no legitimate reason to point it out.”