Daily Mirror (Northern Ireland)
Why you should always read the small print
As Monarch customers who paid by debit card lose out
More than 250,000 people risk losing the cash they paid to Monarch Airlines for flights that no longer exist, just because they used a debit card instead of a credit card.
Paying for items over £100 on a credit card means you are legally entitled to get your money back if the firm goes bust, under Section 75 of the Consumer Credit Act.
Paying on a debit card doesn’t give the same protection. There is a voluntary chargeback scheme, where your bank will try to get your cash back from the bust firm, but there’s no legal obligation and often very little chance of success.
The financial world is a mass of complex small print that most of us don’t have the time to read, and when we do attempt to, we give up because we don’t understand it.
Independent financial expert Andrew Hagger, of Moneycomms. co.uk, says: “Legal requirements mean that the amount of small print or terms and conditions at the foot of application forms and websites often run to many paragraphs and in some cases pages.
“Unfortunately very few people have the time or inclination to wade through these finer points – and it doesn’t help that they are riddled with confusing jargon.
“This means that important information and potential pitfalls often get overlooked until it’s too late and you’ve broken a rule that you weren’t aware of.”
Here are some other nasties in the small print of financial products, that could catch you out and leave you out of pocket.
CREDIT CARDS
some circumstances you could even get slapped with a hefty bill that includes both voluntary and a compulsory excess. This helps spread the cost but double check whether your insurer is charging you interest.
It can cost you dearly, often 20% APR.YOU may not notice this as it is included in the monthly repayments you get quoted, without a breakdown of what the total includes.
More than half of parents say they would consider “fronting” – that is where they say they are the main driver of a vehicle when in fact it will be mainly driven by a younger or higher risk driver. It might seem a good way to stop extortionate cover costs for younger drivers but it has huge risks. Not only will this invalidate a policy, it is illegal and fraudulent and could land you with a criminal record and unable to find insurance cover in the future.
If you have an accident or even lose something, while drunk or taking drugs on holiday there’s a huge chance your insurer will reject your claim.
This could end up costing tens of thousands if you need urgent medical care or to be airlifted home. There is no help whatsoever if you don’t have valid travel cover.
Sports and beach activities are not included as standard on most policies. Impromptu jet-skiing, scuba diving, zip lines or even banana boating could leave you in deep water and out of pocket.
You must be totally honest about existing medical conditions, even if they seem trivial. Don’t be tempted to not declare some conditions to try and save money – it could end up an expensive mistake. Also make sure you tell your insurer if you are taking prescribed medication.
MORTGAGES
Super-low interest rates are tempting but without knowing the full cost of the loan, including all fees, over the term could mean you pay way over the odds.
The lowest rates often come with £1,500 fees, and over a twoyear deal that is high.
Get a mortgage broker to help you do the sums to ensure you really are getting the best deal.
Renting your property out on Airbnb can invalidate home insurance and you may be breaking the terms of your mortgage agreement.
MOBILE PHONES
If you can afford to pay upfront for a phone, then do it and take out a Sim-only deal so you won’t get stuck in an expensive 24-month contract. Sim-only deals can start from a month at a time. Plus you won’t end up paying interest on the handset, a cost that is often hidden in the total monthly contract bill.
SUBSCRIPTIONS
Be wary when signing up to free trials and subscriptions. Make sure you stop them before the trial period ends or you’ll end up paying out monthly sums.