Bank Charge News

HSBC has been accused of imposing a stealth charge of £25 on patrons who go over their agreed overdraft limit.

The bank claims the charge is fair because it covers the time taken to review the customer’s account, but campaigners say it is a device to get round the rules on unfair penalty fees.

The charge is levied on clients who have gone over their authorised overdraft limit more than once in the prior six months.

The banks says the review - which This is Money belives takes no more than a couple of minutes - involves checking the customer’s ability to stay within their limit over the coming year.

Its introduction is part of the bank’s ‘fair fees’ policy, introduced in 2002.

Ben Green, 31, a picture editor from Norfolk, does not believe the charge is fair however and did not recognise it when it appeared on his account statement at the end of December, described as an ‘arrangement fee’. At first he thought it was an unauthorised overdraft charge and asked the bank if they could remove it.

However it declined, referring to it as a fixed annual charge for reviewing this 12-month overdraft agreement.

He said: ‘I contacted the bank about two months ago to ask them to increase my overdraft by £200 and they said there would be a £25 charge for this. I decided it wasn’t worth it and declined.

‘When the statement arrived, I didnt have a idea what the charge was for. I think I may have gone over my limit twice in the past six months, so maybe that’s why I was charged. The terms of my overdraft haven’t changed though so I don’t see why I should have to pay £25 for someone to have a quick look at my account and then allow me to use the same overdraft for an alternative year.’

While acknowledging HSBC has been one of the banks with the unsurpassed track record for repaying clients unfair charges, Marc Gander from the bank charges lobbying organisation Consumer Action Group said the £25 fee is a ’stealth charge’.

This spring should see the end of a long wait for customers of the High Street banks that have been accused of making unlawful charges for unauthorised overdrafts.

It is nearly two years since the Office of fair trading (Oft) first reviewed the controversial charges and matters will now be settled in the High Court.

The case is scheduled to begin on 14th January, when the Court will determine the legality of charges made to account holders who exceeded overdraft limits and bounced cheques and direct debits.

The banks could be ordered to refund their account-holders and only charge for the administration costs of their regulars’ misdemeanours.

Over £800 million has already been awarded out by the banks in refunds, although this process has been suspended until the outcome of the test case brought by the Oft.

If the Oft is successful, some estimates put the amount owed by banks to their patrons as high as £4.7 billion.

The Office of fair trading has already offered the major banks a chance to establish an acceptable level of charges prior to the Court date, but the banks have maintained their stance that the charges are legal and fair.

Last year, the chief executive of the British Bankers’ Association, Angela Knight, stated: “The banks have always been seriously of the view that the fees they charge clients are fair and clear. The court case will clarify these points and provide demonstrability for customers and banks identical.”

CONFUSED by the changes to bank overdraft charges? We explain what they mean - and how to claim back unfair fees

As the court hearing nears between banks and the Office of Fair Trading over unauthorised overdraft charges, several high-street lenders have announced changes to their charges.

Below we give the Which? Money verdict on the changes:

Lloyds TSB

Lloyds TSB has decreased its monthly unauthorised overdraft charges from a maximum of £90 to £15, and interest from 29.8 per cent to between 10.4 per cent and 19.3 per cent, depending on which account you have. However, it has also introduced day after day fees. For overdrafts of less than £25 the daily fee is £6, for amounts between £25 and £100 the fee is £15, and for more than £100 this rises to £20 a day, with a maximum of ten day after day fees charged in a month.

The new charges still appear to be excessive. Those who go only slightly overdrawn for a short period may pay less, but a minority of clients could pay more than £200 a month.

Alliance & Leicester (A&L)

A&L has scrapped interest charges on overdrafts and replaced them with a day by day fee. For unauthorised overdrafts, you now pay £5 a day. Before, A&Lcharged £25 on day one, followed by a second £25 fee if you remained overdrawn for a further four days, plus interest. On authorised overdrafts, the day after day fee is 50p (capped at £5 a month).

These fees will be cheaper for those who slip into the red for only a few days in the month. However, if you have an unauthorised overdraft for a full month, the fees would hit £155 - more than double the previous maximum monthly penalty charge.

First Direct

First Direct has stopped paying interest on current-account credit balances but has reduced rates on unauthorised overdrafts. Overdrafts up to £250 are interest-free; above this the rate is 12.9 per cent.

The free overdraft facility up to £250 seems like a good step but consumers who make use of this facility more than once every six months will incur an ‘arrangement fee’ of £25.

It’s also bad news for those who keep their current account in credit, and this account loses its Which? Most excellent Buy status after seven years.

Abbey

Abbey patrons who go over their overdraft limit will now be charged an ‘instant overdraft request fee’, starting at £5 for a transaction of less than £10 and going up to £35 for transactions of £30 or more (previously it charged a flat fee of £30). There is also an instant overdraft monthly fee of £25 (up from £20) and interest charged at 28.7 per cent.

Many patrons who are overdrawn for longer periods will be worse off.

A GOOD CALL?

Telephone banking can certainly be convenient, but we’re not always happy with the service offered, according to a new Which? Money survey.

Common complaints highlighted in our study include not being able to speak to someone in your local branch, long-winded lists of options to choose from when calling and the amount of time it takes to get through to a human being. On the positive side, most people in our survey said they were satisfied with the overall telephone banking service they received from their bank.

WINNERS AND LOSERS

Fifty four per cent of respondents in our survey were very satisfied with their bank’s telephone service, while only 9 per cent said they were dissatisfied.

Telephone banking pioneer First Direct stood out for the right reasons. An impressive 90 per cent of its regulars were very satisfied with the service it provided. Its staff were seen as cooperative and knowledgeable and able to respond pithily to queries. ‘They’re always pleasant and ready to help,’ one member said. An alternative told us: `They always answer the phone momentarily, sort out what I want without fuss and never try to sell me stuff I don’t want.’

It’s a shame, in light of these findings, that First Direct has subsequently slashed the interest rate it pays on current account credit balances from 2 per cent to 0 per cent (see p15). This move has lost First Direct its long-held Which? Unsurpassed Buy status.

The big banks weren’t able to match this level of service. Overall, only 41 per cent of regulars of the big four (Barclays, HSBC, Lloyds TSB and NatWest) were very satisfied. Patrons of Lloyds TSB and Barclays were the smallest likely to be very satisfied. One member said: ‘There are too many buttons to press before you get a real person and then it’s not always easy to get through what you want.’ Another said: ‘It takes forever to go through the menus and then when you actually end up with a person you have to give all the same information again!’

Lenders must warn indebted borrowers if they are in danger of getting into financial difficulties, under changes to banking rules.

New guidelines made to avert a rise in the number of home repossessions will force banks to offer at-risk regulars alternative debt repayment plans, including contact details for free money advice providers.

The change to the Banking Code, which takes effect in March, transfers responsibility for dealing with debt from borrowers to lenders. Under the existing code, it is the customer’s responsibility to contact the bank if they think they could slip into arrears.

The revised code instructs banks to acknowledge that borrowers should be asked to pay off debt from credit cards, personal loans and mortgages only if they can still afford to pay for “priority” household bills such as heating and electricity.

The move comes as thousands of homeowners face the threat of repossession over coming months. The Council of Mortgage Lenders predicts that the number of repossessions will rise by 50 per cent in 2008, from 30,000 to 45,000 as the credit crunch and rises in monthly mortgage costs take their toll on household budgets.

Accountants are also predicting a record number of bankruptcies and insolvencies this year, which banks are keen to avoid. About 120,000 people are expected to file for insolvency in 2008, up from 110,000.

However, debt charities said that the change to the code did not go far enough. Chris Tapp, the director of Credit Action, the debt advice charity, said: “The change to the code is a step forward, but it is not the gentle of change we need. If what we want is legally responsible lending in the first place, this does not go far enough.”

Teresa Perchard, the director of public policy at the Citizens Advice Highboy, said: “While these and other changes represent progress, we are disappointed that the opportunity has not been taken to end the practices of unsolicited increases in credit limits and unsolicited issuing of credit card cheques.”

The British Bankers’ Association (BBA), the industry body that oversees the Banking Code, said that borrowers will still be more likely to reach a favourable repayment agreement if they cooperate with the lender.

Brian Capon, of the BBA, said: “Where the customer contacts the bank and is energetically cooperating with it, the bank will be obliged under the code to consider granting concessions on interest, fees and charges. This will be decided upon a case-by-case basis, but one of the elements will be the extent to which the customer is working with the bank to resolve the problem.”

A spokesman for Halifax said: “We always take a proactive approach. When a payment is missed we will contact the borrower straight away via letter to discuss things, offer support, and agree a way forward.”

The change to the code came after an independent review in November stipulated that there should be “more help for consumers who may be heading towards financial difficulties”.

The BBA said that borrowers should still contact their bank as early as possible if they face payment difficulties.

Mr Capon said: “It was always unsurpassed practice for banks to get in touch if they noticed someone was struggling. Now this is in the code, although it is still most excellent to get in touch with your bank straight away if you are struggling.”

BANK of Scotland workers shared a £78million bonus bonanza this year as the company raked in profits of £191 per second.

Around 16,000 staff in Scotland have received bonuses and free shares, with an average payout of nearly £5000 per person.

A spokesman for the bank’s parent company, HBOS, said yesterday: “We believe it is very important that staff have a stake in the business and share in its success.”

Banking unions Accord and Amicus praised the bonus scheme. They said in a joint statement: “With so many negative stories about industrial relations around, it is right for unions to commend and support employers like HBOS who are doing the right thing by their workforce.”

HBOS are set to make a record £5.8billion profit this year. Antidebt campaigners accuse the big banks of selling customers loans they can’t afford then hammering them with charges and penalties.

[tags] bank charges, refund bank charges, claim back creditcard charges [/tags]

When we look back at 2007, how will we remember it? From the financial point of view, everyone will have different memories, depending on their personal circumstances. But for many, it may well be recalled as the year free banking ended.

Not officially or immediately, of course. But it was certainly the year when one of the great consumer rebellions of modern times against excessive overdraft charges laid the seeds for the UK’s big banks to think about levying fees for running our accounts for the first time in decades.

Observers have even given it a name: “the waterbed effect”. This describes a phenomenon where if you squeeze a bank’s charges, and therefore its profits in one area, it moves to recover them in another.

Get them while you can: check out the top current account deals

Why now?
So how has this all come about? Actually, it all started back in 2006, when many bank customers’ long-running anger at the way they were being hit by high charges - sometimes running into hundreds of pounds - on unauthorised overdrafts suddenly boiled over.

What turned this anger into a powerful consumer campaign were a number of factors that coalesced together.

First was the growing perception that such charges were illegal. Campaigners argue that under the Unfair Terms in Consumer Contracts Regulations 1999, bank charges must reflect actual costs incurred. Also, the level of overdraft charges failed to comply with the “reasonableness” rules required for service fees under the Supply and Services Act 1982.

Indeed, a similar test appeared to have been applied by the Office of Fair Trading (OFT), the credit watchdog, in respect of credit card charges. And in that case, credit card providers had amended their fees. Many thought: if it works with credit cards, why not bank accounts?

How customers fought back

The internet fuels the campaign
The second factor was the use of the internet to argue this point and specifically, the easy availability of so-called “template letters” from a number of websites that customers could download, personalize and send off to their banks, demanding a refund of all charges.

The third key driver in the campaign was the fact that banks started to cave in and refund the charges they had levied to tens of thousands of customers. In many cases, repayments stretched back up to six years and totalled many thousands of pounds, providing added impetus to those who could see that it was worthwhile doing the same themselves.

A mounting media clamour, in which readers’ successes were eagerly chronicled, helped stir the pot.

The endgame
It all had to end of course: the banks realized by the middle of 2007 that they could no longer continue to haemorrhage money to their customers in this way.

By this point, it was estimated that hundreds of millions of pounds had been repaid or was being offered in compensation to customers who had done little more than send a stroppy letter to their bank demanding their money back.

So the banks and the OFT struck a deal. In return for a stay on any more payouts, the banks agreed to a test case where the legality of overdraft charges would be heard by the courts some time in 2008.

If the banks lose, payouts will start up again. If they win, they will go back to charging people with overdrafts as much as they can get away with.

The fallout
Amid all the furore, few people understood one key consequence of the charges campaign: if you stop the banks making money out of the minority of people who go over their overdraft limits, they will look to earn it elsewhere. And the natural place to start is with bank account charges for all.

One intriguing feature of the UK banking landscape for several decades has been the availability of “free” current accounts for those in credit. As long as they remain in credit, they pay no fees, unlike many of their counterparts elsewhere in Europe and worldwide. Of course, we paid in other ways: with endless admin fees elsewhere.

But already in late 2006, banks were warning that if they are forced to curtail their overdraft charges, a significant source of profits, everyone would pay the price.

The first bank to make a move was First Direct, which in November 2006 announced it would charge current account customers £10 a month if they didn’t have another First Direct product or pay in at least £1,500 a month (or keep that as an average balance). In September 2007 it went further, and stopped paying interest to its 1.2 million current account customers. Nationwide also hinted that it might introduce charges.

It is now clear that if the legal test case goes against the banks - they will appeal of course, so the process could last many more months - they will bring to an end the current free banking arrangement.

See which banks are offering the most interest on current accounts

What comes next?
The exact form the new regime might take is not yet known. It could be a monthly fee, or a charge for visiting a branch, as happened to unfortunate Dorset residents last year.

Or we may have to pay per transaction, for example on standing orders, direct debits and cheque payments, as happens in other parts of the world.

Either way, the old system of running our current accounts looks to be on the way out. That banks could use a consumer revolt in order to hike the amount they skim off everyone’s accounts - how unlike them to behave that way.

[tags] bank charges,credit card charges, claim back [/tags]

Gordon Brown’s decision on the Rock’s future could be an historic one, reports Katherine Griffiths

Weighing on Gordon Brown’s mind over Christmas will be a financial decision which could make him as famous as his dramatic move to make the Bank of England independent in 1997. Should he nationalise one of Britain’s biggest banks?

Some believe by January Mr Brown will have no choice but to enact historic legislation to take Northern Rock into public ownership. Indeed, the Treasury has already drafted a nationalisation bill which would be pushed through in a single day.

Advisers to the Treasury hope the draft legislation will be no more than a handy bargaining tool to drive a hard bargain with bidders for the Newcastle-based lender.

The Government is still pinning its hopes on a sale to Sir Richard Branson’s Virgin, which is trying to structure a deal that gives something to Northern Rock’s shareholders - to satisfy in particular hedge funds run by Jon Wood and RAB Capital - while also repaying the Bank of England’s £25bn loan and making a return for investors.

Ex-Abbey boss Luqman Arnold’s firm, Olivant, is also working on a deal, which would see a new management team parachuted in to run it in return for taking a cut of any future upside.

However, there is a growing feeling in Westminster and the City that a sale might fail, due to adverse stock market conditions which could make it impossible for a bidder to raise a loan from banks to repay the Bank’s cash.

Robert Pitcher, a partner at law firm Eversheds, said: “Anyone who wants to acquire the shares in Northern Rock - which in reality are worthless - will have to pay a premium over the true value of the bank’s assets, particularly due to the involvement of the activist shareholders. In these markets, and in light of the apparent position of the shareholders, it is hard to see how anyone will make that work.”

A source close to the Northern Rock bidding process, said of the Government’s current thinking: “It is 60:40 in favour of nationalisation, because the numbers in the deal with Virgin are a joke and Olivant is failing to ignite any fires.”

Bankers believe the Government could either warehouse the lender for a period of time and then float or sell it, or it could break it up and sell the assets. Either scenario could see a string of new bidders - or ones that have walked away - enter the fray.

The process would not be straightforward and nationalisation would throw up several problems. It would require the Government to stand behind Northern Rock’s entire £113bn balance sheet. However, it would not guarantee the money lent by the Bank to Northern Rock could be fully recovered. At the same time, it could lead to a head-on clash with shareholders.

But some believe it might be the most sensible option. It could protect the Government against a sale falling through in January or February, by which time Northern Rock may have become more sickly.

It would also avoid the risk of the Government recommending a bid, only for that party to try to renegotiate the terms of the deal later. Worse still, it would also avoid the possibility of the new owner running into difficulties and having itself to be rescued.

Nationalisation could also be less controversial than administration, which would be very likely to lead to a fire sale of assets and heavy job losses in the north east.

The biggest headache might be lawsuits from shareholders, but some corporate lawyers believe investors - especially those who bought into the lender after its financial crisis was revealed - would have no case, on the grounds that owning shares is risky.

Vincent Cable, acting leader of the Liberal Democrats, said: “Nationalisation is a pragmatic solution. Conditions for a private sale are absolutely awful at the moment. Shareholders are fighting like cats and dogs and markets are bad. A temporary public solution could mean Northern Rock is refloated some time down the line when markets are less bad.”

Nationalising Northern Rock, one the UK’s most recognised mortgage banks which wrote almost 20pc of all new home loans in the first half of the year, would be highly embarrassing for the Government.

One analyst said: “It would send a very bad sign that British banking regulation has failed”.

In fact, there have been several public bail outs of more minor banks in the past which Mr Brown could point to. The small lender, National Mortgage Bank, was nationalised in 1994 by the Conservatives, though by that point it was little more than a shell. On a larger scale, the bailout of Continental Illinois in the US in 1984 could provide a template.

The possibility that the Government could let Northern Rock collapse, just as it stood back while the Bank of Credit and Commerce International (BCCI) went under, is thought to be inconceivable because the Government has got to try to safeguard the billions of public money loaned to Northern Rock.

According to Mr Pitcher, there are several routes towards taking control of Northern Rock. “The Government could pass primary legislation to compulsorily acquire the shares. Alternatively, as Northern Rock’s £25bn debt to the Government is secured by charges on the bank’s assets, the Government could appoint administrators with a view to a quick, ‘pre-packaged’ sale of the bank’s business and assets, with the proceeds being applied to meet the debt to the taxpayer,” he said.

The Government would have to find new management for Northern Rock. A team led by a retired building society or banking chief executive would be suitable, Mr Cable said.

Conservative leader David Cameron yesterday said nationalising Northern Rock it would be a “monumental failure” by the Government. In a few weeks’ time, he may come to the view it is the least bad option.

[tags] bank charges, mortgage[/tags]

Payment protection insurance - also called loan payment protection - is designed to cover debt repayments in the event that borrowers are made redundant or are unable to work due to illness or accident.

Policies usually pay out after a deferred period of either one month, three months or six months and then pay out for up to 12 months if you are unable to work.

The basics

When taking out a loan or credit card you may be given the option of buying PPI. It could even be rolled up into your loan without your knowledge, increasing your monthly repayments. Be sure to check with your loan provider.

PPI is not compulsory and although it is offered by most lenders it is expensive and you are entitled to refuse it. Loan and credit card providers are wrong to include it in your quote without telling you.

Whether or not you need it depends on what savings or other provision you have, and also what cover your employer may offer in the event of redundancy or illness. If you are a dual income couple the risk is also reduced.

Before you sign up for a loan always ask the lender if PPI included as part of the package. Some providers will quote your repayment amounts including payment protection insurance and fail to tell you.

Always ask to see what your loan repayments would be without payment protection insurance added so you can see the real cost of the cover. And never sign a loan agreement before reading the small print.

If you do want PPI, you will do better to take out a separate policy as tied cover is unlikely to be the cheapest.

Providers

There are many insurance providers who offer income protection cover on a stand-alone basis. You can compare the best quotes in This is Money’s Money Shop (see below).

You can tailor the type of cover you want to your individual needs. For example, you can choose to have just accident and sickness cover without unemployment protection.

Some employers will continue to pay sick or injured staff for a certain length of time – so always ask your employer first to make sure you’re not buying cover you won’t need.

Increasing your loan

If you increase the size of your loan be careful. Some lenders will simply churn the insurance and add more on top as rolling cover without telling you. So here again you should ask if PPI will be added.

Cancelling PPI

Be warned – this might not be an option after you have signed up. It depends on the nature of the insurance and the loan contract.

Many policies allow you to pay for PPI on a monthly basis so you can cancel the payment at any time but check with your provider.

If you have signed a contract that says you will have PPI, for example 12 months or the duration of the loan then you may not be able to terminate payments.

If you do redeem your loan early you might not be able to claim back your premiums. If you agreed to a loan amount upfront, where the insurance costs were included, you could be liable to repay the full amount.

Mis-selling policies

If you feel you were misled by a loan or credit card provider, or it was not made clear to you that insurance was included in your loan package before you signed up, then you may have a case for mis-selling, even if your signature is on a contract. The rules state that PPI inclusion should always be made clear at the outset.

[tags] claim back credit card charges[/tags]

A credit card provider has denied it is introducing a charge “by stealth”.

Nat West credit card holders who opted to join its new rewards scheme are now being billed £3 a month, unless they spend £1000 a month on the card.

Some customers claim the bank gave inadequate warning and is introducing the charge at Christmas when people may not notice.

Nat West says full details were in the written terms people got before registering to join last summer.

Scheme replaced Airmiles

RBS/Nat West group is the second largest UK credit card provider and introduced the Your Points reward scheme last June.

It replaced Airmiles, with Nat West claiming Your Points would be more flexible to customers’ needs.

Your Points allows points accumulated each time a purchase in made using the card, to be exchanged for budget airline flights and holidays.

Cardholders were encouraged to phone up and register to join, but now some lower spending people have complained to BBC’s Money Box, that there was no warning about the charge over the telephone at registration time, and say they feel disappointed and misled.

They have just received leaflets telling them that from 1 December, people who do not spent £1000 a month on their card, will see a £3 a month charge automatically added to their card bill.

Cardholder response

It has come by stealth… It does not seem moral to me.
Olive, cardholder from Sheffield

Some customers, including Jennie from Somerset, are angry.

She told the programme: “I think it is a very crafty way
of doing it, because you have got so many things coming through at the moment, with Christmas mail, you would not be inclined to read it properly.”

Another cardholder, Olive from Sheffield, added: “I thought this was exceptionally bad and that is why I wanted to alert other people to it.

“Why did they introduce the charge in December, not June when the scheme started?

“It has come by stealth.

“It is just about legal, but it does not seem moral to me.”

Customers’ choice

Some customers have told how they received the leaflet telling of the charge, just two days before it was being brought in, and Nat West confirmed that unless customers rang up to deregister from the Your Point scheme by 1 December, they would be charged at least for the first month.

A Nat West spokesperson said the bank had delayed charging for the Your Points scheme until December because it wanted customers to familiarise themselves with the scheme first, and for them to have had time to collect some points.

Nat West says all customers will have “actively chosen” to join.

Some other customers have contacted the BBC to say they are happy to pay the £36 a year that it will cost lower spending customers to belong to the rewards scheme, and say they are waiting to fully assess the benefits.

People who do not spend enough to avoid the charge and who now wish to deregister from the scheme, should call Nat West’s customer services department.

[tags]claim back credit card charges[/tags]

Music lovers prepare to suffer a fate worse than the Cheeky Girls. Martin Lewis, the founder of MoneySavingExpert.com, has teamed up with a band called Oystar, a kind of budget Chas & Dave, to create a protest song about bank charges.

To the tune of the Clash’s classic anthem, I Fought the Law, the unlikely ensemble sing: “I fought the Lloyds and the Lloyds lost. They even paid the interest and the court costs.” With a download fee of only 50p and a release date of January 7, the plan is to get this song to No 1 to coincide with the start of the Office of Fair Trading’s legal challenge to bank charges in the High Court.

While the musical talent of those involved is questionable, the idea is good fun and worthy of support – particularly as the banks seem to have stepped up the pursuit of profits through unfair overdraft charges in recent months. Sadly, they have been helped enormously in this cause by the fecklessness of the Financial Services Authority (FSA).

In the summer, the chief City watchdog introduced a waiver allowing the banks to delay dealing with customers’ refund claims until after the test case was resolved. At the same time, it said that overdraft charges could continue subject to certain conditions, chiefly that customers in financial difficulty were not exploited. But as we report on pages 10-11, the banks are not abiding by the rules. There is also evidence that some banks have been using the waiver as an excuse to shelve complaints about credit card charges, even though the FSA made it explicitly clear that the hold applies only to current account fees. The banks have even managed to turn the waiver to their advantage by refusing to discuss complaints about one-off fees. (Before the waiver most banks would usually reduce or remove the odd charge if customers complained or had made a genuine mistake.)

Despite all this, the FSA has decided that the waiver is working well and should be renewed. This is either wilful blindness or naivety, neither of which are qualities that you would want in a financial watchdog.

To preorder your copy of the bank charges protest song, text the word “bankers” to 82822.

Hip, Hip, hooray to speedier buying, and helping the planet

The self-serving alliance of estate agents, TV personalities and surveyors that campaigned tirelessly against the introduction of home information packs (Hips) has finally had to concede defeat.

After endless dithering and the odd U-turn, the Government has decided that from Friday, December 14, every home must have a Hip before it can be put on the market – irrespective of how many bedrooms it has.

While every new layer of official bureaucracy should be met with caution, the well-organsied campaign against Hips was decidedly overblown. The basic idea of providing local authority searches and information about a property’s energy efficiency up front offers many practical benefits at a relatively low cost. When Hips have bedded in, they should speed up the buying process, reduce costs for first-time buyers and eventually perhaps contribute to reducing carbon emissions. Sellers may have to pay a fee of about £400 but unless they are leaving the property market altogether they will benefit from receiving a Hip at no cost on the next home they buy.

The energy assessment report is the most expensive and controversial element of Hips because it requires an army of box tickers to make costly home visits. But if this process encourages people to insulate their homes more effectively and therefore reduces carbon emmissions, it will be worth it. It is also a neat way of meeting European regulations.

There is no evidence that Hips becoming mandatory for homes with three or more bedrooms in September has had any discernible impact on the property market. Despite what the doommongers said, few people have decided against selling their homes on the basis of such a relatively small fee. In many cases, sellers have deferred payment until their home is actually sold.

There is no doubt that ministers handled the introduction of Hips in a typically incompetant fashion but those who objected on such spurious grounds should now eat their words.

Scrooge of the Year – your chance to take revenge