Know your consumer rights
Government consumer rights body Consumer Direct had over 1.5 million calls and emails last year from people who felt they'd been treated unfairly when they bought goods or a service.
Knowing your rights will help to reduce your chances of being ripped off. And thankfully, the financial services industry is one area where there are strict rules in place to protect you.
Rules dictate everything from how the product is advertised and presented through to a cooling-off period after the sale.
Credit cards are a good example of this. Product literature must contain a summary box that includes important details such as the APR and any fees or default charges. This information makes it easier to compare products.
You should also be sent a written credit agreement stating your rights to pay off the debt early as well as the cancellation policy.
Similar rules are in place for other products such as mortgages and loans and, whenever you buy any financial product, you'll be given a key facts document explaining its aims and risks.
When buying a house, estate agents should also ensure their description of the property is as accurate as possible.
Also check that your estate agent is registered with an OFT-approved estate agent redress scheme, such as the Ombudsman of Estate Agents.
Your right to cancel
Cooling-off periods are in place to give you piece of mind, if a product isn't suiting your needs you can get your money back. The length of time you have varies, depending on the type of product.
For instance, with any insurance policy you'll have 14 days after you take out the policy to cancel it if you decide it isn't right for you credit cards have the same cooling-off period.
You'll get a seven-day cooling-off period for anything you buy online or over the telephone as well as items over £35 you buy on your doorstep.
Make a complaint
If you do find a product or service lacking, you can complain about it.
First you should speak to the company that sold the product, and after a certain amount of time, usually four weeks, if you still have no joy, contact the Financial Ombudsman Service or relevant watchdog to assess your case for you.
Whether it's your personal loan, car or your fridge freezer, if you've got a problem, keep a record of what happened and any conversations you have with the company. This will support your case if you do need to take your complaint to a higher level.
Being a savvy personal finance consumer can often help in other areas too. With mobile phones you have similar rights as you would with other purchases.
If the phone is faulty and you have only had it a few weeks you would be entitled to a refund or a repair if it's only a minor fault. After this time, depending on the fault, you will probably still be entitled to a repair or replacement.
As far as the service agreement goes, you have seven days to cancel the contract if you decide it's not right for you. After this, your rights protect you if the service is faulty but not if you change your mind or find a better deal.
The Sale of Goods Act also protects you against being sold inferior goods. Under this law, all products should be sold to you 'as described', 'fit for purpose' and 'of satisfactory quality'.
In these circumstances you won't need a receipt but will be expected to return the item within a reasonable timeframe.
Consumer Direct: consumerdirect.gov.uk 08455 040 506
Trading Standards Services: tradingstandards.gov.uk
Advertising Standards Agency: asa.org.uk 020 7492 2222
Ofcom: ofcom.org.uk 0330 123 3333
Financial Ombudsman Service: financial-ombudsman.org.uk 08000 234 567
Ofwat: ofwat.gov.uk 0121 644 7500
If you’ve have a complaint about a financial service product you have bought but the company you bought it from refuses to resolve your problem after eight weeks, the Ombudsman can help. The Ombudsman will investigate and resolve the matter. The Ombudsman is independent and its service is free to consumers. The Ombudsman may find in the company’s favour but consumers don’t have accept its decision and are always free to go to court instead. But if they do accept an Ombudsman’s decision, it is binding both on them and on the business.
Everything you own: all your assets (property, cars, investments, savings, insurance payouts, artwork, furniture etc) minus any liabilities (debts, current bills, payments still owed on assets like cars and houses, credit card balances and other outstanding loans). When you’re alive this is called your wealth; when you’re dead, it becomes your estate.
The period of time you’re allowed, after signing an agreement, to cancel it without incurring a financial penalty. Financial products including banking, credit, insurance, personal pensions and investments are subject to a 14-day cooling-off period (this is 30 days in the case of life insurance and personal pensions). The insurer or broker must refund any money paid by you within 30 days, although it has the right to deduct a reasonable admin charge, and a sum proportionate to the number of days’ cover you had. If you have any related credit agreements, these will also be cancelled.
This is used to compare interest rates for borrowing. It is the total (or “gross”) interest you’ll pay over the life of a loan, including charges and fees. For credit cards where interest is charged at more frequent intervals, the APR includes a “compounding” effect (paying interest on interest). So for a credit card charging 2% interest a month (equating to 24% a year), the APR would actually be 26.82%.