Ripped off or caught out by the small print? It's your fault for not taking enough care, some cynics say. Martin Lewis begs to differ.
Stupid people have rights, too. As someone who's campaigned on issues like reclaiming PPI, bank charges and mortgage exit fees since 2005, I've slowly seen a trend in my mailbags to decry others' success. They berate such consumer activism as a moral hazard on the grounds that it "rewards stupidity".
Well I want to start to fight back, to, if you like, emancipate the "stupid". This isn't about compensation, it's about redress, getting money back that's wrongly been taken. Yet that doesn't appease all; here are a few examples.
"I'm sorry but if someone is stupid enough to sign up for something they don't need then it's their own fault! Don't waste your time helping them."
"Shove your 'Mini Revolution' up your ---- (this in response to helping people who'd fallen victim of unlawful auto-pre-selected expensive travel insurance on flights). People should pay attention to what they are doing. Idiots!"
"Why do these people stupid enough to sign up for PPI get the payout. What do I get for not signing up?"
I suspect on first read, some may be sympathetic to these sentiments. After all, when people have successfully fended off scams themselves, they might see it as an injustice that others are getting cash for failing to do so.
Others see this as financial Darwinism. "If it's in the terms and conditions and they sign it, then it's their problem." Yet if I walked up to you in the street and told you I was going to punch you, then punched you, the fact I'd informed you wouldn't make it legal. The same is true with commercial products. Just because you sign the terms and conditions, it doesn't mean they're within the law.
To those berating, it's worth considering who it is that fall for scams, rip-offs, entrapment products and mis-selling. Here's my non-scientific list of such people…
1. Mental health sufferers. It's reported one in four people in the UK every year suffer from mental health problems, and at such times may be incapable of acting in their own best interest.
After seeing some of these negative comments, I was contacted by Kim, who said: "I'm highly educated, bipolar with multiple personalities; depending on "who" is in charge that day can affect the outcome of my future. I have been caught by unscrupulous scallions on numerous occasions. Does that make me stupid?"
2. Those who don't read every term and condition. Over 30 pages of legalese terms and conditions aren't unheard of. If you don't read them all, well, you must be "stupid", I suppose.
3. The blind or partially sighted. According to the RNIB, websites are commonly not optimised for screen readers, which can lead to people making unavoidable mistakes.
4. Those with learning disabilities.
5. New parents and others who are sleep deprived.
6. Dyslexics, dyscalculics and the functionally illiterate.
7. People whose partner looked after the finances, then died. Joint finances managed by one spouse are common, especially among older generations. When that person passes away, it's easy to make naive mistakes when tackling complex finances for the first time.
8. Those with dementia.
9. Financial phobics. This is often linked to other mental health conditions, such as when a person with an anxiety disorder is too scared to open bills.
10. Those who trust banks. Take the PPI mis-selling; many were lied to that it was compulsory, some had it added, having turned it down, or had it added without asking. Is that stupidity?
Many talented, bright, high achievers at one time or another will have fallen into these categories. I'm far from ashamed to say I've been there too. Yet even if we exclude all these obviously not-stupid "stupid' people who certainly deserve redress when duped, what about the rest? Not everyone is a rocket scientist, but does that make them fair game, unworthy of appropriate help?
I remember being surprised by a banker turned charity worker, who said that in her former employment she commonly received standard template letters from those applying for a refund of bank charges, where people had failed to complete the "[ADD YOUR NAME]" and "[ADD HOW MANY CHARGES]" section, so there was no personal details at all. This may seem laughable, but it's tragic.
Those without the ability to understand that they needed to add details are the very same people that had been entrapped by a banking system designed to allow charges on charges to add up to thousands of pounds. Is that a fair market place?
Of course, most people should take responsibility for themselves; we don't want the lowest common denominator. But for that to happen, we first need a good run at decent financial education in our schools something that after much lobbying, is finally being added to the national curriculum next year.
Products, too, must be transparent and fair. Stealthily adding travel insurance when I sign up for a holiday is wrong, though asking me if I want it is fine.
Not every product needs to be super simple. In our complex world, sometimes products, especially financial ones, need to mirror that and that's when fair warnings and dealings must be mandated.
Strong consumer activism is needed to teach big corporations if they misbehave or mis-sell to people "stupid" or otherwise it will cost them in the end. This needs to be coupled with decent regulation which I hope the regulator will bring and political will to ensure those who are temporarily or permanently incapable of taking responsibility for themselves are protected.
If you're one of the majority who don't always get it right, here's a few things worth considering:
• Re-claim PPI for free. Payment protection insurance was mis-sold by banks to people getting credit cards and loans. Over £9 billion has been put aside to repay this money wrongly taken.
As one common mis-sell was to add it without asking, you may have it without knowing. I hear daily about scores of people getting thousands of pounds back for current and long-closed products.
Reclaiming this cash has become far easier; you don't need pay a firm to do it. Often it's just the case of a letter or phone call. Full help and template letters including FAQs such as what to do if you don't have the paperwork are at moneysavingexpert.com/ppi.
• Don't pay to get an EHIC. The European Health Insurance Card, which is free, entitles you to treatment in an EU state-run hospital or GP surgery at the same cost as a local. If they pay, you pay, if it's free for them, it's free for you.
Many people have these cards without realising they date. Over three million are currently invalid. So if you're going away this summer, check yours now. If it's out of date (or you don't have one) you can renew for free at ehic.org.uk . Don't Google (NasdaqGS: GOOG - news) to find this site: if you do, you may end up on a lookalike site promising to fast track you for a charge. This is nonsense, avoid.
And a final warning: you need to present an EHIC card to use it. So leaving it in the hotel or, worse, at home, means it's worthless if you have a problem.
• Audit your regular payments. Many people have money dripping out of their bank accounts each month unnecessarily. It could simply be due to forgetting to cancel something, as this tweeter admits: "Found out that somehow I was still paying home insurance on a house I didn't live in any more! Cancelled this and got over £600 back as a refund."
Or it could be for things you don't use, such as this: "We cancelled gym membership yesterday having been paying £40 a month for a year and half without going!" That's £720 wasted.
If you bank online, you'll be able to see a list of standing orders and direct debits; simply scan down and check everything is still in use. If you're not online, call or go into your bank and a member of staff should print a list for you.
The final regular payment is a "recurring payment" also known as a "continuous payment authority". This is when you give the long number on your debit or credit card, rather than bank details. Unfortunately, they're tough to cancel, and the only way to spot these is to look at your card's statement for transactions that occur regularly when you haven't handed your card out for it each time.
• Mental health and debt. This is a marriage made in hell. Sadly, mental health can cause debt problems, and severe debt can affect people's mental health. The stats are shocking; up to 44pc of people who've had mental health issues have had severe debts, nearly five times the likelihood of everyone else. So don't think you're alone; there are things you can do. I've a free booklet, written with the kind help of Mind, Rethink, CAP and Citizens Advice, which you can download to work through your rights: moneysavingexpert.com/mentalhealth.
• Make a financial factsheet. If one partner focuses on the family finance, ensure there's a financial factsheet listing all the savings, debts, insurance, energy bills, bank accounts and other products you have (though keep it general so it isn't a security risk).
Better still, talk it through with the spouse who doesn't look after the finances, so at least they have a basic understanding of how it works, and would therefore be in a better position to take over if death, divorce or loss of faculties were to happen.
• Switched phone? You could be owed cash. Some telecom providers, including TalkTalk and Three Mobile contract phones, don't automatically refund leftover credit when you leave, and only give it back if you ask. So if you've left a telecom company, it can be worth a quick call.
• Check your tax code. If you're an employee or get private pension income, your tax code (eg, 944L) is an instruction to them on what to deduct from your income. If wrong, it can cost you money. Each year the taxman reconciles errors, and up to 15pc of people are on the wrong code. So look at yours in some cases you'll receive a coding notice that explains what it stands for. More information at hmrc.gov.uk/incometax/tax-codes.htm . While on this subject, do also remember HMRC will never email you about a tax rebate. If you get one of those it's a scam.