There is a price-war going on between the online retailers; Amazon.com, Wal-Mart, Target and the American Booksellers Association (ASA) who defends the independent bookstores. The 3 retailers are selling bestsellers like Stephan King’s “Under the Dome” for really low prices. The ASA will do everything to protect the independent bookstores against this ‘predatory behaviour’. They have already called for an investigation for these anti-competition acts. According to the ASA, the real reason why these online retailers offering books for low prices is because they want to attract new customers so that they will buy additional sales. The ASA say that Amazon.com, Wal-Mart and Target have a secret plot to eliminate competition. They want to have the control of the market for bestsellers. Those acts are devaluing the concept of the book and the book industry will become a danger of collateral damage in this war. That is often be said when more efficient or productive competitors challenge them in the marktplace. But like in all other industries, innovation and technology change the way of selling and buying books en there always will be winners but also losers.
The online retailers brought a chance in the industry but also increased the appetite for books. Even in the middle of the financial crisis more books have been bought. ASA counters it.
The ASA say that the can not compete because of the price advantage Amazon.com and co have but they can offer other advantages like attentive and knowledgeable service, a reader- and- author- friendly atmosphere,…
Instead of painting them as helpless victims they would better release that. Prices are important but also other things like these other advantages can be important for some people.
In the article they said that the independent book stores can offer other advantages than the price advantage that online retailers can bring. In the text you can read: ‘Prices are important but they aren’t all-important. I think that the price advantage will be the most important advantage and the only advantage for many people that they will take into account especially people who do not read much. Only a small group of book lovers will not buy their book online because of the other advantages and perhaps also on principle.
The online retailers even loose money by offering books for these low prices and it is not right that behind the strategy of it the only goal they have is that new customers would buy more. They are creating a monopoly and that is not good for the competition.
JACOBY, J.( October 28, 2009 ), Latest battle in book price wars. Retrieved from http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/10/28/latest_battle_in_book_price_wars/
vrijdag 6 november 2009
maandag 2 november 2009
Recruitment firms fined for boycotting rival (By Bieke Demeester)
The Office of Fair Trading (OFT) in the United Kingdom, announced at the end of September, that six companies breached the competition law.
The Office said that these six companies, which are recruitment companies, formed a cartel and refused to deal with the new rival ‘Parc UK’. They got a fine of £39 million in total for this serious breach of competition law. The new firm ‘Park UK’ wanted to act as an intermediary between recruitment companies and constrution firms. The six recruitment companies didn’t compete fairly: they formed a cartel, named the ‘Construction Recruitment Forum’. The OFT confirmed that between 2004 and 2006, this forum agreed to boycott ‘Park’. Therefor, they agreed upon fixed fee rates, which the intermediary firms (such as Park) would have to pay. This distorted competition and drived up staff costs, a director of the OFT said.
The company which got the greatest fine, was considering an appeal, although they admitted the charge. They said there was only one guilty employee and they already fired him. On the day of the judgment, the shares of this particular company fell be 3,5%.
Remarkable is that the Office of Fair Trading gives high fines. The construction industry in the UK had to pay in September a fine of £130 million for illegal price-fixing.
I think the OFT is necessary to investigate breaches of competition law, because consumers are always the dupe. Some companies are sentenced, but I think a lot of companies aren’t discovered yet. Although is it verbidden to breach competition law, this article shows that some companies don’t care about it and just want to raise their benefits. In Belgium, there is a similar council which has to investigate breaches on competition regulations.
Sources:
WEARDEN, G. (September 30, 2009). Recruitment firms fined boycotting rival. Retrieved from http://www.guardian.co.uk/business/2009/sep/30/oft-fines-recruitment-firms
The Office said that these six companies, which are recruitment companies, formed a cartel and refused to deal with the new rival ‘Parc UK’. They got a fine of £39 million in total for this serious breach of competition law. The new firm ‘Park UK’ wanted to act as an intermediary between recruitment companies and constrution firms. The six recruitment companies didn’t compete fairly: they formed a cartel, named the ‘Construction Recruitment Forum’. The OFT confirmed that between 2004 and 2006, this forum agreed to boycott ‘Park’. Therefor, they agreed upon fixed fee rates, which the intermediary firms (such as Park) would have to pay. This distorted competition and drived up staff costs, a director of the OFT said.
The company which got the greatest fine, was considering an appeal, although they admitted the charge. They said there was only one guilty employee and they already fired him. On the day of the judgment, the shares of this particular company fell be 3,5%.
Remarkable is that the Office of Fair Trading gives high fines. The construction industry in the UK had to pay in September a fine of £130 million for illegal price-fixing.
I think the OFT is necessary to investigate breaches of competition law, because consumers are always the dupe. Some companies are sentenced, but I think a lot of companies aren’t discovered yet. Although is it verbidden to breach competition law, this article shows that some companies don’t care about it and just want to raise their benefits. In Belgium, there is a similar council which has to investigate breaches on competition regulations.
Sources:
WEARDEN, G. (September 30, 2009). Recruitment firms fined boycotting rival. Retrieved from http://www.guardian.co.uk/business/2009/sep/30/oft-fines-recruitment-firms
woensdag 28 oktober 2009
Microsoft: An ageing giant (by Ben Van Laere)
Ten years ago, Microsoft was the undisputed leader on the technology market. It only suffered from a ruling of a court. The judge ruled that Microsoft was enjoying a monopoly. This decision was made because the court accused Microsoft of crushing its competitors. Even Apple was not capable of competing with Microsoft.
Now, ten years later, Microsoft has many threats. First of all the old enemies, such as Apple, grew and became very successful. Apple is now making record profits with the iphone. Secondly, two students have blocked Microsoft in their successes. Larry Page and Sergey Brin created Google which is now the most popular and successful organisation on the technology market.
Windows 7, the successor of Windows Vista must recover the damage Microsoft has taken. The problem is that Microsoft was unable to expand its dominance in technology to the internet, games or gadgets. They focussed on operating systems, software and hardware dough they missed the internet and gadget popularity.
Nowadays, the technology develops in a way nobody can follow. A gadget which is now very popular becomes old school within two years. It is very difficult for companies to always be up to date. They need to innovate and hope their new products will be successful. Microsoft was maybe too afraid to change a lot. Focussing on new products is always taking risks.
I think Microsoft still has a lot of clients. They lost their monopoly but they still remain a giant. And after all, competition is not bad, it keeps organisations focussed.
Source:
http://www.guardian.co.uk/commentisfree/2009/oct/24/microsoft-ageing-giant-windows-7
Now, ten years later, Microsoft has many threats. First of all the old enemies, such as Apple, grew and became very successful. Apple is now making record profits with the iphone. Secondly, two students have blocked Microsoft in their successes. Larry Page and Sergey Brin created Google which is now the most popular and successful organisation on the technology market.
Windows 7, the successor of Windows Vista must recover the damage Microsoft has taken. The problem is that Microsoft was unable to expand its dominance in technology to the internet, games or gadgets. They focussed on operating systems, software and hardware dough they missed the internet and gadget popularity.
Nowadays, the technology develops in a way nobody can follow. A gadget which is now very popular becomes old school within two years. It is very difficult for companies to always be up to date. They need to innovate and hope their new products will be successful. Microsoft was maybe too afraid to change a lot. Focussing on new products is always taking risks.
I think Microsoft still has a lot of clients. They lost their monopoly but they still remain a giant. And after all, competition is not bad, it keeps organisations focussed.
Source:
http://www.guardian.co.uk/commentisfree/2009/oct/24/microsoft-ageing-giant-windows-7
Pub sector ‘ties’ cleared by OFT (by Greet Heyse)
The Office of Fair Trading declared to haven’t found any evidence that the link between pub companies and landlords is damaging the competition in the pub sector. The investigation came after a complaint from the Campaign for Real Ale, who claimed that landlords had to buy beer from their own pub owners.
Camra said it is important that OFT’s decision should be overturned. They can’t accept that the consumer benefits from the competition and choices within the sector.
Action is very necessary right now according to Camra. The government should prevent the flow of the pub closures and ensure that the consumers get a fair share according to the agreements as demanded by the competition law.
OFT reacted by saying that companies who are owned by a pub are not protected from competition by simple agreements with their lessees.
The organization will therefore take no further actions
The biggest operator does not complain hopes that the industry will still move forward. Enterprise, who is also a big operator, also has no complaints because thanks to the ‘beer’ ties that there was a chance for entrepreneurs who are unable to afford to buy a pub on their own.
Personally, I do not know precisely how far people can go in competition. But I do know that they can’t deceive people or restrain other parties from competing. It seems that both parties have some severe arguments. I think, as long as there are no clear negative consequences, the ties can remain and everything should stay as it is now. Also very important is that the consumer is very favored in the whole situation and I think that this was crucial to the decision of the government.
Source: http://news.bbc.co.uk/2/hi/business/8319771.stm
Camra said it is important that OFT’s decision should be overturned. They can’t accept that the consumer benefits from the competition and choices within the sector.
Action is very necessary right now according to Camra. The government should prevent the flow of the pub closures and ensure that the consumers get a fair share according to the agreements as demanded by the competition law.
OFT reacted by saying that companies who are owned by a pub are not protected from competition by simple agreements with their lessees.
The organization will therefore take no further actions
The biggest operator does not complain hopes that the industry will still move forward. Enterprise, who is also a big operator, also has no complaints because thanks to the ‘beer’ ties that there was a chance for entrepreneurs who are unable to afford to buy a pub on their own.
Personally, I do not know precisely how far people can go in competition. But I do know that they can’t deceive people or restrain other parties from competing. It seems that both parties have some severe arguments. I think, as long as there are no clear negative consequences, the ties can remain and everything should stay as it is now. Also very important is that the consumer is very favored in the whole situation and I think that this was crucial to the decision of the government.
Source: http://news.bbc.co.uk/2/hi/business/8319771.stm
maandag 12 oktober 2009
Lehman sells off trinkets on eBay (By Hanne Snoeck)
One of the former Wall Street’s most powerful investment bank Lehman Brothers has found an innovative way of founding money to pay off the gigantic debt they have to their creditors. Every bit will help to repay the creditors and they have organised therefore during the bankruptcy a massive garage sale of the trinkets that were produced in happier times. Those gadgets were in fact produced for their employees and clients. The trinkets are very varied: you have binoculars, umbrellas, bags, teddy bears and even a silver-plated baby rattle, all with the Lehman logo. They sell it under the slogan “Own a piece of history”. The idea came actually from former employees. They posted their memorabilia on eBay and there was apparently a lot of public demand for it. Therefore the liquidators did the same thing and they are even planning a retail store.
When I read the article the first thing that I thought was: Who will buy a trinket of a company that went bankrupt? I can’t imagine that somebody would buy a trinket of a Belgian company that had a compulsory winding-up. Of course this bankruptcy was the biggest ever in the US and we’re not talking about a company in our little country Belgium. But by further thinking, I actually agree that liquidators will search for all the possibilities they can find to pay off the debt that the company had made, even when it seemed a bit weird at first.
Sources:
Foley, S. (July 21, 2009). Lehman sells off trinkets on eBay. Retrieved from http://www.independent.co.uk/news/business/news/lehman-sells-off-trinkets-on-ebay-1754581.html
When I read the article the first thing that I thought was: Who will buy a trinket of a company that went bankrupt? I can’t imagine that somebody would buy a trinket of a Belgian company that had a compulsory winding-up. Of course this bankruptcy was the biggest ever in the US and we’re not talking about a company in our little country Belgium. But by further thinking, I actually agree that liquidators will search for all the possibilities they can find to pay off the debt that the company had made, even when it seemed a bit weird at first.
Sources:
Foley, S. (July 21, 2009). Lehman sells off trinkets on eBay. Retrieved from http://www.independent.co.uk/news/business/news/lehman-sells-off-trinkets-on-ebay-1754581.html
zaterdag 10 oktober 2009
'Kent attracts new type of tourist: Europeans seeking easy bankruptcy' by Greet Heyse
Normally, tourists vist Kent for its castles, where widowed queens lived who lived out their days and kings who fought for England. And they also came for Canterbury Cathedral, who is known for the site of the murder of Thomas à Becket. There is also a retreat where Winston Churchill brooded and the House where Joseph Conrad wrote, etc.
But now, tourist are visiting Kent for a whole other reason, namely, Kent is considered one of the finest places in Europe to declare oneself bankrupt! The number of foreign debtors seeking bankruptcy in Britain has risen by 20 per cent, that because the English insolvency laws are very comfortable.
People call it the "bankruptcy tourism". They come to Kent because the tax laws are
better than the ones in their country.
Now, this phenomenon is still a legitimate thing but it is nog quite ethical.
In 2002, new European insolvency legislation came into force that made cross-border bankruptcies between member states easier to complete. It is possible for a person to shop around and find the most lenient bankruptcy.
I think this is a really akward situation. People are moving to Kent just for the bankruptcy. I guess that the city musn't be that cosy or nice to live in. All those 'depressed' people are coming to you town because they have enormous debts. It is a really bizar phenomenon. I think, people are not staying put with the real citizens who live in Kent. Has anyone asked for their opinion yet? perhaps their must be a law that equalizes all the bankruptcy procedures in the European Union. But I think and hope that this will happen in the future.
Source:
The Times, 23th of September 2009, http://www.timesonline.co.uk/tol/news/uk/article6845136.ece
But now, tourist are visiting Kent for a whole other reason, namely, Kent is considered one of the finest places in Europe to declare oneself bankrupt! The number of foreign debtors seeking bankruptcy in Britain has risen by 20 per cent, that because the English insolvency laws are very comfortable.
People call it the "bankruptcy tourism". They come to Kent because the tax laws are
better than the ones in their country.
Now, this phenomenon is still a legitimate thing but it is nog quite ethical.
In 2002, new European insolvency legislation came into force that made cross-border bankruptcies between member states easier to complete. It is possible for a person to shop around and find the most lenient bankruptcy.
I think this is a really akward situation. People are moving to Kent just for the bankruptcy. I guess that the city musn't be that cosy or nice to live in. All those 'depressed' people are coming to you town because they have enormous debts. It is a really bizar phenomenon. I think, people are not staying put with the real citizens who live in Kent. Has anyone asked for their opinion yet? perhaps their must be a law that equalizes all the bankruptcy procedures in the European Union. But I think and hope that this will happen in the future.
Source:
The Times, 23th of September 2009, http://www.timesonline.co.uk/tol/news/uk/article6845136.ece
donderdag 8 oktober 2009
Reader’s Digest Headed for bankruptcy (By Bieke Demeester)
At the end of August this year, newspapers reported about the bankruptcy of Reader’s Digest. The magazines with inspirational family stories of the Reader's Digest Association Inc, are famous all over the world. This company was bought in 2007 by an investor group, led by Rippelwood Holdings LLC and from that moment, the managers tried to cut costs. This didn’t work out very well, so in Augusts 2009, they planned to file for bankruptcy for its U.S. businesses, in order to diminish the debts by 75 %. The current debt of 2.2 billion dollars, would be reduced to 550 million dollars. On that very moment, there was already a prearranged plan with all the creditors for a restructuring plan. This plan didn’t provide a lot of redundancies. The operations in other countries (f.e. Canada, Australië, Europe, Africa, Asia,…) were not affected.
This is a very good example of a restructuring of a international company. They made fundamental choices to survive. I think the economic recession has everything to do with his restructuring: people who want to read something, will now more search on the Internet, because that’s for free. The fact that the company will develop a more digitally focus, is a very good example of that.
Sources:
CHELSEA, E. (August 17, 2009). Reader's Digest plans prearranged bankruptcy. Retrieved from http://www.reuters.com/article/wtUSInvestingNews/idUSTRE57G37B20090817?pageNumber=2&virtualBrandChannel=10522
OSTROW, A. (Augusts 17, 2009). Reader’s Digest headed for bankruptcy. Retrieved from http://mashable.com/2009/08/17/readers-digest-bankruptcy/
This is a very good example of a restructuring of a international company. They made fundamental choices to survive. I think the economic recession has everything to do with his restructuring: people who want to read something, will now more search on the Internet, because that’s for free. The fact that the company will develop a more digitally focus, is a very good example of that.
Sources:
CHELSEA, E. (August 17, 2009). Reader's Digest plans prearranged bankruptcy. Retrieved from http://www.reuters.com/article/wtUSInvestingNews/idUSTRE57G37B20090817?pageNumber=2&virtualBrandChannel=10522
OSTROW, A. (Augusts 17, 2009). Reader’s Digest headed for bankruptcy. Retrieved from http://mashable.com/2009/08/17/readers-digest-bankruptcy/
woensdag 7 oktober 2009
Merger Would Create Mobile Giant in Britain (by Ben Van Laere)
Two mobile giants, namely Deutsche Telekom and France Télecom, announced they have plans to merge their mobile operations in Britain.
At this moment, O2 and Vodafone are the market leaders in the mobile sector in Britain. But with this merger, Deutsche Telekom and France Télecom will become the number one in Britain. They will have a 37 % market share.
It is difficult to survive for operators in the very concentrated European mobile industry. Operators are currently selling below cost to compete with the other operators. Orange is even giving away netbook computers to win customers. Probably, more mergers will follow in the future because it is the best way to consolidate a position.
In Belgium, I think we have the same problem. A lot of operators create a crowded mobile market which makes it almost impossible for new operators to survive. For some of those starters, the only way to save themselves is a merger.
Not long ago, I read an article about making phone calls in Belgium. It taught me that Belgium is the most expensive country in the world to make phone calls. Selling below cost is a phenomenon they know in Britain, but apparently not in Belgium.
Source: http://www.nytimes.com/2009/09/09/business/global/09mobile.html?_r=1&scp=9&sq=merger&st=cse
At this moment, O2 and Vodafone are the market leaders in the mobile sector in Britain. But with this merger, Deutsche Telekom and France Télecom will become the number one in Britain. They will have a 37 % market share.
It is difficult to survive for operators in the very concentrated European mobile industry. Operators are currently selling below cost to compete with the other operators. Orange is even giving away netbook computers to win customers. Probably, more mergers will follow in the future because it is the best way to consolidate a position.
In Belgium, I think we have the same problem. A lot of operators create a crowded mobile market which makes it almost impossible for new operators to survive. For some of those starters, the only way to save themselves is a merger.
Not long ago, I read an article about making phone calls in Belgium. It taught me that Belgium is the most expensive country in the world to make phone calls. Selling below cost is a phenomenon they know in Britain, but apparently not in Belgium.
Source: http://www.nytimes.com/2009/09/09/business/global/09mobile.html?_r=1&scp=9&sq=merger&st=cse
zondag 4 oktober 2009
'Cash-strapped sell their kidneys to pay off debts' by Greet Heyse
There is a new rage in the UK.
The Sunday Times revealed results of an investigation and established that British victims of the economical crisis are offering their kidneys for £25,000 or more to pay off their debts.
Suddenly lots of adverts appeared on the net in order to offer kidneys. Some journalists went undercover as a friend of relative of a sick patient an negotiated with the kidney-donors.
One person willing to sell his kidney is a 26-year-old healthy nurse who said he needed the money to pay debts after his business went bankrupt. Another person is a 43-year-old taxi driver from Lancashire, who wants to raise cash to pay off his mortgage and to be able to buy a new kitchen.They both want to help those in need of kidney transplants and at the same time they want to set themselves free from their financial difficulties.
Professor Peter Friend, a former president of the British Transplant Society declares that there has to be a debate really quickly about the whole phenomenon.
Nearly 7,000 people in the UK are waiting for kidney transplants and 300 died last year while on the waiting list.
I think that, if nothing is going to happen that this whole situation is going to escalate! There has to be some sort of databank for donors and people who offer a kidney have to be healty and strictly inspected. It has come too far and before we all know it, people are going to take advantage of this whole commercial situation. There has to be a discussion or some rules, otherwise, all the desperate people are going to sell their kidney without even knowing the consequences. Perhaps the government can intervene in this whole new rage and they better act fast.
Sources:
The Sunday Times online 27th of September 2009:
http://www.timesonline.co.uk/tol/life_and_style/health/article6850879.ece ,
http://www.timesonline.co.uk/tol/news/uk/article6850791.ece
The Sunday Times revealed results of an investigation and established that British victims of the economical crisis are offering their kidneys for £25,000 or more to pay off their debts.
Suddenly lots of adverts appeared on the net in order to offer kidneys. Some journalists went undercover as a friend of relative of a sick patient an negotiated with the kidney-donors.
One person willing to sell his kidney is a 26-year-old healthy nurse who said he needed the money to pay debts after his business went bankrupt. Another person is a 43-year-old taxi driver from Lancashire, who wants to raise cash to pay off his mortgage and to be able to buy a new kitchen.They both want to help those in need of kidney transplants and at the same time they want to set themselves free from their financial difficulties.
Professor Peter Friend, a former president of the British Transplant Society declares that there has to be a debate really quickly about the whole phenomenon.
Nearly 7,000 people in the UK are waiting for kidney transplants and 300 died last year while on the waiting list.
I think that, if nothing is going to happen that this whole situation is going to escalate! There has to be some sort of databank for donors and people who offer a kidney have to be healty and strictly inspected. It has come too far and before we all know it, people are going to take advantage of this whole commercial situation. There has to be a discussion or some rules, otherwise, all the desperate people are going to sell their kidney without even knowing the consequences. Perhaps the government can intervene in this whole new rage and they better act fast.
Sources:
The Sunday Times online 27th of September 2009:
http://www.timesonline.co.uk/tol/life_and_style/health/article6850879.ece ,
http://www.timesonline.co.uk/tol/news/uk/article6850791.ece
Rumours of more than one will left by Jackson add to the confusion (By Hanne Snoeck)
He is famous for a lot of positive things, like his beautiful songs and his charity especially for children and people of Africa . But we know him also for his ‘child abuse trial’ and his luxurious life that also led to a gigantic burden of debt. Everybody knows that we are talking about Michael Jackson.
Michael Jackson had a lot of success with many songs like “Yesterday” and “Let it Be” that has brought in a lot of money. His ownership of the bulk of The Beatles’ music was also a big source of income but nobody knows the exact extent of his fortune.
It was his child abuse trial that showed us that he was deeply in the red. His spending was more than his income and he almost lost his beloved ranch ‘Neverland’ where many sick children were welcome. There are now co-workers like his manager and his spokesperson during the criminal trial that are suing the singer for million of dollars.
There are a lot of people with financial problems but when you are a famous singer you always have a chance that your life is world-wide spread in the media. When you do something good it is of course nice but when something goes wrong in your life it is not so nice anymore.
I once saw a video of Michael Jackson where he was buying the one thing after the other. You could see that he was buying just for buying and I think that he really did not know what he was buying. These famous artists earn so much money that they can buy anything but do not know the value of money anymore. People just want more and more and when you have something there will be an other desire. People cannot live without desire.
Source: Persinko, T.(2009). Rumours of more than one will left by Jackson add to the confusion. Retrieved from http://www.independent.co.uk/news/people/news/rumours-of-more-than-one-will-left-by-jackson-add-to-the-confusion-1722616.html.
Michael Jackson had a lot of success with many songs like “Yesterday” and “Let it Be” that has brought in a lot of money. His ownership of the bulk of The Beatles’ music was also a big source of income but nobody knows the exact extent of his fortune.
It was his child abuse trial that showed us that he was deeply in the red. His spending was more than his income and he almost lost his beloved ranch ‘Neverland’ where many sick children were welcome. There are now co-workers like his manager and his spokesperson during the criminal trial that are suing the singer for million of dollars.
There are a lot of people with financial problems but when you are a famous singer you always have a chance that your life is world-wide spread in the media. When you do something good it is of course nice but when something goes wrong in your life it is not so nice anymore.
I once saw a video of Michael Jackson where he was buying the one thing after the other. You could see that he was buying just for buying and I think that he really did not know what he was buying. These famous artists earn so much money that they can buy anything but do not know the value of money anymore. People just want more and more and when you have something there will be an other desire. People cannot live without desire.
Source: Persinko, T.(2009). Rumours of more than one will left by Jackson add to the confusion. Retrieved from http://www.independent.co.uk/news/people/news/rumours-of-more-than-one-will-left-by-jackson-add-to-the-confusion-1722616.html.
Making the most of mortgage overpayments (by Ben Van Laere)
For the first time in history British families are repaying more debt than they’re borrowing . British people were European leaders in taking mortgages but now there has been a reversal.
The Bank of England has announced that for the first time, house owners are paying back more on their mortgages than house owners are borrowing. The reason why debtors are paying their mortgages is the low interest rate. And that’s not the only reason, the number of overpayments has also clearly risen. Overpaying can save thousands of pounds in interest, and can so diminish years off the mortgage.
It is important for people to read the small letters in a mortgage contract. In some mortgages you can overpay as much as you like. In others there are strict rules. The great danger of overpaying is that people are overpaying too much. Once you have made an overpayment, you can’t get that money back.
I found this article very interesting because it contains information about how you can save a lot of money. I never thought of overpaying before, but after reading this article, I think it can be very useful.
Nearly all young families have to borrow from the bank to pay their dream house. Every pound or euro counts for those families, so saving money by overpaying can really be a financial help.
Source: http://www.guardian.co.uk/money/2009/sep/05/overpay-mortgage
The Bank of England has announced that for the first time, house owners are paying back more on their mortgages than house owners are borrowing. The reason why debtors are paying their mortgages is the low interest rate. And that’s not the only reason, the number of overpayments has also clearly risen. Overpaying can save thousands of pounds in interest, and can so diminish years off the mortgage.
It is important for people to read the small letters in a mortgage contract. In some mortgages you can overpay as much as you like. In others there are strict rules. The great danger of overpaying is that people are overpaying too much. Once you have made an overpayment, you can’t get that money back.
I found this article very interesting because it contains information about how you can save a lot of money. I never thought of overpaying before, but after reading this article, I think it can be very useful.
Nearly all young families have to borrow from the bank to pay their dream house. Every pound or euro counts for those families, so saving money by overpaying can really be a financial help.
Source: http://www.guardian.co.uk/money/2009/sep/05/overpay-mortgage
Unscrupulous debt management schemes could face closure under Government proposals (By Bieke Demeester)
I read an article in the Telegraph about very high rates of interest in the United Kingdom. As everyone know, more and more people have problems to pay their debts. A debtor often makes a ‘debt management scheme’, which is an informal payment schedule between him and his creditors. This prevents a new loan or a formal insolvency procedure.
The British government will introduce soon a legislation which lays down rules for these schemes and for the companies which apply high rates of interest and charges, and really hassle the debtors for payment. Such companies can be fined or even shut down! The basic assumption is that debtors end up in a vicious circle of developing more and more debts, especially because the interest rates and charges are very high. With this intended legislation, the government wants to protect the debtors.
I think this regulation is necessary because if there aren’t any rules, people just can’t stand up against unscrupulous practices of certain companies. But I think the main problem is the possibility to buy on credit in certain companies. In that way, people buy expensive goods, which they sometimes can’t pay back.
In the public social assistance centre where I worked, I faced the same problem as described in the newspaper: debtors came to me with more debts, coming from high rates of interest, notices to pay, summons etc.
Sources:
Butterworth, M. (2009). Unscrupulous debt management schemes could face closure under Government proposals. Retrieved from http://www.telegraph.co.uk/finance/personalfinance/6206152/Unscrupulous-debt-management-schemes-could-face-closure-under-Government-proposals.html
Dept management scheme. Retrieved from http://www.personaldebtsolutions.co.uk/solutions-debt-management.htm
The British government will introduce soon a legislation which lays down rules for these schemes and for the companies which apply high rates of interest and charges, and really hassle the debtors for payment. Such companies can be fined or even shut down! The basic assumption is that debtors end up in a vicious circle of developing more and more debts, especially because the interest rates and charges are very high. With this intended legislation, the government wants to protect the debtors.
I think this regulation is necessary because if there aren’t any rules, people just can’t stand up against unscrupulous practices of certain companies. But I think the main problem is the possibility to buy on credit in certain companies. In that way, people buy expensive goods, which they sometimes can’t pay back.
In the public social assistance centre where I worked, I faced the same problem as described in the newspaper: debtors came to me with more debts, coming from high rates of interest, notices to pay, summons etc.
Sources:
Butterworth, M. (2009). Unscrupulous debt management schemes could face closure under Government proposals. Retrieved from http://www.telegraph.co.uk/finance/personalfinance/6206152/Unscrupulous-debt-management-schemes-could-face-closure-under-Government-proposals.html
Dept management scheme. Retrieved from http://www.personaldebtsolutions.co.uk/solutions-debt-management.htm
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