Unauthorised Recurring Card Payments and Overpaying Mortgages

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Hello, welcome to this Moneybox podcast. More than half of one bank's first-time buyers are trying to pay their mortgage off early, but is overpaying always a good idea? Have you got an up-to-date will? If not, book now to make one with a solicitor free. Well, almost. And there's been a big surge in texts saying claim winter fuel payment. Delete them. They're from thieves.

But first, is a business you don't recognise dipping into your bank or credit card account every month and taking out money? It happens a lot. They're called recurring payments. And whenever you give your debit or credit card number online or on the phone... you're potentially setting one up. Firms are very good at turning a one-off special offer into a regular payment. Thousands of unsuspecting shoppers have said they're having money taken without their knowledge. Trading Standard says...

It's outrageous these regular payments are being taken without explicit consent. Dan Whitworth in our Salford studio. Dan, they're not all bad, though, recurring payments, are they? No, and when they're used in the right way, Paul, they're actually a really helpful way for people to manage monthly payments or subscriptions for products or services. Most people will probably be aware of them for being used to pay for things like streaming music, films or TV.

but also as well as monthly discount clubs, magazine subscriptions or gym memberships. The problem is, as we've been finding out, thousands of people are complaining on review sites online that they're being hit with unauthorised recurring card payments. So money's being taken out of their account for things they say they didn't intend. to sign up for and sometimes don't even know anything about. And how much money is going this way from people's accounts?

Well, typically these individual payments, they're usually quite low, £10, £20, £30 or so. And obviously if they're unauthorised and people spot them quickly enough, they complain to their bank and any future payments can be stopped. But they can also complain to... the company involved and previous payments can be refunded. The problem is, Paul, if people don't spot them, they can quickly add up. And that's what happened to John Savage from Southampton, who emailed Moneybox.

So he has a joint bank account with his wife. It's a busy account, lots of payments going in and out on a regular basis. But he noticed a strange small monthly payment that he didn't recognise. Now I went to speak to him at Nutsford Services on the M6 during a break in his journey from Glasgow to the south coast of England.

And he told me he did some digging and it turns out this monthly payment had been getting taken from his account for nearly 10 years, totaling more than £1,700. Did you have any idea? any knowledge what this money was supposed to be paying for what you'd supposedly signed up to because the rules are really specific it has to be clear people have to know what they're getting into that apply to you

No, I had absolutely no idea at all. Right, so John, I've just pulled up the FCA, so the Financial Conduct Authority, the regulator on this, and I'm reading it here from my phone. Unauthorised recurring card payments. That's what you're saying this is. Businesses can only take recurring payments from your card with your consent. And the next line is the key line. Your consent should be clear, specific and informed for it to be valid. Was it...

Clear, specific and informed then, John? Absolutely not. It just seems to me that there's some little button on our website somewhere and it says, hey, do you want 15 quid free? And you go, or a voucher for a product or whatever. And you go, that's interesting. And you look at it and you explore it a bit. And then you realise it's a waste of time. So you just ditch it.

And that's what happens. And somehow they're able to get old of you and just continually drag this money out of your account. And the problem is, of course, we all do so much online banking that it's really hard to pick up on that unless you really go and check. They did come through to me and said that they owed me £1,776. And they're quite forthcoming. They seem to be keen to give me the money back. But I just can't believe how many other people this is affecting.

But I think 90% of the people who are locked into all this, the money is still going out of their accounts and they don't know about it. And it's really important that people check their accounts, check spam emails for these people and get their money back as soon as possible.

think of this behaviour and the impact I mean there's a proper impact on personal finances here nearly £2,000 taken from you without your knowledge all it is about is about separating ordinary people from their money and i think it's absolutely disgraceful

Now, the good news is that in this case, John did get his money back. He complained to his bank, he complained to the company Evolved, and albeit after lots of emails and phone calls, he did eventually get a full refund, but it took well over a month.

Now, the advice on this issue, Paul, of unauthorised recurring card payments, do you know what? It's really simple. If you notice a card payment going out of your bank account you don't recognise, complain to your bank and get any subsequent payments stopped. Then complain to the...

company involved and demand your money back. Thanks, Dan. Well, live now to talk to Catherine Hart. She's the lead officer for scams at the Chartered Trading Standards Institute. Catherine Hart, John completely clear there that he... did not knowingly authorise this payment. Do we know how big a problem this is?

I don't think we can actually put a figure on it. We know that these things are occurring. We've seen the reviews. But what I think is so outrageous is the consumer confusion that has evolved with this. I mean, how can they make an informed decision if they don't know the full facts? And isn't it shocking that the people aren't finding out until months?

or even years later, that this amount of money is going out of their bank accounts. Yes, and the consumer organisation, which they surveyed 2,000 people, more than a third of them had found unrecognised payments in their bank statement. But as John said, many people don't look or don't notice or maybe they're too embarrassed to think, well, maybe I've been doing something stupid. Well, I think this is the thing here. First of all, we need to keep an eye on where our money is going.

But also, I do think that the banks need to take a little bit more responsibility of perhaps monitoring some of these, where this money is actually going. I don't think it's very easy to actually find out what is your direct debits, your standing orders and what your recurring car payments are. And I think that we certainly need to have a look at that a little bit better.

Yes, I did call some of the banks yesterday, and one or two of them said they could not provide me with a list of recurring payments. Others are doing it. Others are sort of halfway to doing it. But you think, just as with standing orders and direct debits, you should be able to... see a list of these and then you could more easily go through them rather than looking for an odd payment in you know 100 odd payments in a month

I agree with you completely. In fact, I was not aware that it wasn't so obvious about the recurring car payments. So that was actually news to how difficult it was actually to see these recurring car payments. So absolutely, I really do think that the banks should be making that more clear because also at the end of the day, it ought to help people be a little bit more aware of where they're.

Harder money is actually going. Dan explained to John, you know, the guidance from the regulator, the Financial Conduct Authority, is absolutely clear. For a payment to be valid, the consent has to be given. It has to be... Clear, specific and informed. If thousands of people are finding payments and they haven't given that clear, specific agreement, how are they getting away with it, these firms?

Well, I think a lot of the time is because people are not aware. As John said, I mean, unfortunately, he was a victim of this for 10 years. When I say a victim, you know, insofar as he did not know that these were... recurring banks. unauthorised payments were taken out of his bank account for so long. I mean, the rights of consumer, as we know, that, you know, for any contract whatsoever, you know,

It's got to be given in a format that's understood by the average normal consumer. And in this case, these consumers, nobody has given enough information to make an informed choice. And Jeff has emailed to say it happened with him with an annual subscription.

for software which he actually cancelled within 28 days but then he got the next payment was taken and he's afraid another one might be so how important is it to cancel with your bank because once you've done that they have to be stopped don't they Absolutely. So first of all, it's so important to...

get hold of your bank, cancel that subscription. But also, you know, it's so important to speak out about it. Let us know, let trading standards, let law enforcement know that this is an issue because if we don't know it's an issue... then we can't sort of devise, give the business advice, but also give the clear consumer advice as well. Catherine Hart from Trading Standards Institute. Thanks very much.

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Now, we often report on the programme about the problems of first-time buyers struggling to find a deposit, can't afford the monthly payments, but a report by the high street bank TSB has found that two-thirds of its recent first-time buyers are... are managing to overpay their mortgage. One in six hopes to be mortgage-free by the time they're 40. These are surprising findings to me. It's from their quarterly monthly report of a survey of 1,000 first-time buyers in the last five years.

Our reporter Joe Krasner spoke to people in Liverpool about how they're coping with their mortgage. So we've had our mortgage for five years. We took it out on a 15-year term. We recently tried to reduce the term but decided to keep our payments the same. Why did you think of reducing the term? Just to get rid of it more quickly and have more disposable income.

We were renting before, so we knew how much we could afford. So we increased our monthly payments to match what we were paying in rent, and that shortened the term. So if you did have some spare cash, where would that go? Savings, accessible savings. No, we're not making overpayments. We don't have enough money. We have a small family, we can't afford it. I feel like paying the mortgage off would give us more money.

in the long term if you had the opportunity what would you prioritize paying off some of your mortgage or putting some money into a pension probably paying off the mortgage i imagine yeah and if you could overpay would you yes It feels like having that not hang over our head for the long term would be a good thing. I own a house, it's my second mortgage but we did have to get it over 35 years and if we didn't do that it just wouldn't have been possible.

I can understand people wanting to shave time off, but for me it wouldn't be realistic right now. We pay one and a half thousand per month. That's the maximum we can go, and we've got that locked in for five years. So is the mortgage your priority? If you had any spare cash, what would you do with it? It wouldn't be putting it towards the mortgage, to be honest. No, it would just be to spend on life. Life's expensive now.

Various views there in Liverpool. But Joshua got in touch from Bristol to tell us he and his wife are making overpayments on their mortgage. We purchased the property in 2017. We fixed it for five years. towards the end of 2021. So we got really, really lucky with what we're paying now. So we're about 3% less than the present fixed rates that are being offered in the market.

so fortunately we're fixed through until the end of next year with that in mind we have both since we are earning more money and so we we decided to sort of overpay while we could while the time is good because when when off comes up at the end of next year.

The extra that we're overpaying at the moment is going to be gobbled up by the increase in the rate that we pay. And I also have a slight fear that we're going to end up extending the term in order to keep the repayments around about the level that we're paying at the moment, which is where we're comfortable.

paying us Steve and his wife from Staffordshire. Our mortgage is £560 a month at... 2.15% interest we pay 900 pounds a month so we're overpaying by 340 pounds we do this primarily to reduce the final cost of the house which you've factored in on the interest over the term but we still intend

to do this when our mortgage rate doubles early next year. We're able to do this because of things probably we don't do like buying things on finance or credit or having multiple holidays a year. We generally just try and live within our means.

and what we can afford. Listening to that is Craig Calder. He's Director of Lending at TSB, and he worked on that report. Craig Calder... 67% of your first-time buyers choosing to overpay that is in contrast with stories of people struggling to meet their payments isn't it

Yes, good afternoon, Paul. Thanks for having me on. So I think what you heard there from your listeners was a very diverse range of opinions of those who... are able to overpay and those can't 67% is a very surprising number but looking at Joshua's case study for example who you just played out

He took his mortgage when rates were very low. So he's actually using that spare capacity he has to overpay. But other homeowners who aren't able to do that, as you said yourself, are looking to prioritise life and having it. having a nice time. Yes, I suppose people who have got those very low rate threat and advantage is overpaying less of an option now for today's buyers.

It's not necessarily less of an option. It's just some homeowners are choosing to prioritise differently. So for those that we serve here who aren't overpaying, some of it is affordability. So about half of the customers said it was about affordability. Some were quite sensibly building. a safety buffer or saving for the future, or as you said, prioritising now and just living life now. We've had an email from Richard who says, I did the 10%.

which I was allowed and paid my mortgage off years earlier. How much can you save by overpaying on your mortgage? Look, even paying something simple like £50 a month on a 31-year term mortgage.

could save you about £18,000 of interest and three years on your mortgage. That's assuming you were paying 4.5% for the term of the mortgage. But even a relatively small amount, by giving up... other things you you see homeowners are giving up their they're doing the fake away as opposed to the takeaway or they're missing out the coffee for example and building up a little bit of savings reserve and looking to pay that into their mortgage so um you know it varies by the amount you

want to pay but even something quite simple like 50 pounds um can save term off the mortgage yeah so you pay less interest you pay it off earlier so yeah win-win in a way is it always a good idea though i mean people may prefer to pay the money if it's got any spare money into a pension or save it like that woman in Liverpool told us. There are circumstances when it's probably not such a good idea.

That's exactly right. It's about balance and having the priorities for your own financial circumstances. One thing that was surprising in the 1,400 bars that we looked at, only 25% of them were thinking about their pension savings, which...

probably feels a little low i think um for me i would be balancing across having an emergency fund paying into my pension and thinking about overpaying my mortgage Yes, that's, of course, assuming that you do have some spare money, which we know not everyone does. Briefly, if you would, Craig, what would you say to someone who's listening to this and thinking, oh, that sounds not a bad idea. What are the steps to think about whether it's a good idea or not, briefly?

So have a look at some online calculators that tell you how much you could save. Really think about how much money you have left at the end of the month and do a proper budget and have balance to your savings and your future goals.

Craig Calder of TSP, thanks very much. And first-time buyers are also the topic for next week's Moneybox Live on Wednesday with Felicity Hanna. What's the market like now for first-time buyers? How easy is it for them to get a mortgage? And is any help from the government available? Felicity would love to hear your questions and experiences. Email moneybox at bbc.co.uk or send a voice note or comment on WhatsApp 0306 783 183.

More than half the adults in the UK don't have a will. So if they die, and people can die at any age, they'll have no say in how their money, property and possessions are distributed. If you're listening smugly thinking... oh, I've got a will, remember that you should review it periodically as well, especially if your family has grown or changed, your relationships have altered, and if you marry or form a civil partnership, any will made before that is normally invalid.

doesn't apply in Scotland, but even there, you should revisit your will after such a major change. Now, I mention all this today because next month, November, is WillAid, where solicitors all over the UK make wills free. Well, almost. In exchange, they do want a donation to their charitable fund. It supports eight charities, including Age UK, Shelter, the NSPCC, the Red Cross, and they suggest a donation of £120 for a single... basic will 200 pounds for a pair of wills

And that is a lot cheaper than a solicitor will normally charge. Let's go live now to talk to Trusha Hirani. She's founder of Touch Solicitors in Oldham, who's taking part in WillAid this year. Trusha Hirani, I'm sure some listeners... are thinking, I've seen wills advertised for 20 quid or even free if you download a form. Why is going to a qualified solicitor so important?

Hi, Paul. Thanks for having me. A will is such an important document. You want to make sure that it's right. Online wills aren't... bespoke to your requirements and there might be major things that you haven't considered. You might have young children, you might have a house. There'll be things like, you know, thinking about trust, perhaps, that you might need to consider for children who have got additional needs. So doing a will online for £20 doesn't always cut, you know.

satisfy all the needs. And of course, you never know if it's wrong, do you? It's your heirs that pick up the pieces afterwards. Now, you say the cost of a basic will through Will Aid in November will be £120, or if it's a couple where their wills sort of reflect. each other, mirror wills, I think you call them, is £200. Does that cover all wills, though? Does that cover everything, however complicated your circumstances are?

No, so will is a great scheme. It covers the basic will. So if you want anything more complicated, there's always going to be an additional charge. However, the tip is always start small. You know, the first step is always get a basic will in place.

always change it, add to it, you know, as your circumstances change, as you said at the beginning, you know, as time goes on, you might buy a property, you might receive an inheritance. So it is really a good idea to revisit that will every couple of years.

The good thing about WillAid is they do use qualified solicitors. So you're going to speak to the right expert. It's definitely worth... the donation to the charities you know you're doing a win-win supporting the charities you get a great will and of course with a solicitor they are regulated and if things do go wrong then

you can get compensation or take action, can't you? Or your heirs can. Now, what happens if you die without a will? Why is it that important? I mean, I had a message from a lady, actually. She wants to remain anonymous, but she said her friend lived with his partner for 20 years. The friend died without a will and the partner's brother inherited everything, not the partner. Is that right? Is that what happens?

Yeah, absolutely. So legally, what would happen is everything would pass to the spouse subject to the statutory limit and then children. If there's no children, it's parents and then obviously siblings. So you want to make sure that people that you don't know, perhaps nieces, nephews, long lost relatives, don't end up inheriting. But you mentioned a partner. I mean, that's a spouse or a civil partner. If you're not in a formal relationship, then you don't count at all, do you?

Absolutely. So a lot more people are in partnerships now and they're not civil partnerships, so they're legally not entitled to anything from the estate. Yes. It's often older people. I think more older people do make wills. But I did a calculation once that every half hour in the UK, someone in their 40s dies. So, you know, you've got to think about it at any age, haven't you? Absolutely. I mean, the...

Earliest age you can make a will is currently 18. They are changing that to 16. But most people start work at 18. So, you know, you're already accumulating funds, aren't you? And just tell me briefly how you apply for a will aid appointment. So you sign up to the dashboard, register your details and you'll be connected with one of the over 200 participating solicitors. So it's very easy to do. They talk you through the whole process. And yeah, it's very simple.

OK, and that's at willaid.org, or there is a phone number 0300 0300 013, I think.

Trisha Hirani of Touch Solicitors, thanks very much. Now, millions of pensioners are being warned this week not to respond to messages or texts inviting them to claim the winter fuel payment. They are fakes. They're written by thieves. They want you to click on a...

link and steal your data later perhaps use it to steal your money as well and dan's back he has more dan yes paul so in the next few weeks around 11 million pensioners will get a letter from the department for work and pensions telling them how much ... ... ... ... ... This week, the DWP has warned of a spike in the number of scam text messages telling pensioners to claim it. As you say, Paul, those messages are fake.

Anyone born on the 21st of September 1959 or earlier will get the payment crucially automatically. They do not have to claim. And that applies in Scotland too, where it's called the Pension Age Winter Heating Payment.

It's a few pounds more than the rest of the UK. So what should people do, Dan, if they get one of these fake texts? First, do not respond or engage with it in any way. Secondly, if it's a text... forward it to 7726 that spells out spam on your phone's keypad 7726 so it can be investigated and thirdly delete it permanently but the most important one is the first one do not click on it do not engage with it as you said paul that message is from a thief

Great advice. Thanks very much, Dan. And we'll leave this podcast with that serious warning for people over 66. Please pass it on to all the older people you know. And remember, if you do get the payment, but your income is over £35,000 this tax year, It'll be taken back next tax year. You can hear the show live on BBC Radio 4 midday on Saturdays and Moneybox Live is 3pm on Wednesdays. You can help set our agenda, as John did, by emailing moneybox at bbc.co.uk or send a voice note.

or comment to our WhatsApp number 0306 783 183. We do read them all. Today, the reporters were Dan Whitworth and Joe Krasner. Researcher, Ima Devlin. Studio producer, Robert Cave. Studio manager... Toby James. Our editor is Jess Quayle and I'm Paul Lewis. Oh, hello. Hello, it's Ray Winstone. I'm here to tell you about my podcast on BBC Radio 4. History's toughest heroes.

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