Tarnished gold firms clean up their act

Two cash-for-gold firms were recently closed down by the OFT boot. Plus, there's bad news on the way for occasional drivers, says Ruth Jackson in a round-up of the week's personal finance news.

An investigation by the Office of Fair Trading (OFT) has led to two cash-for-gold firms ceasing trading. Three more have agreed to change the way they work. CashMyGold, Cash4Gold and Postal Gold have all been criticised for locking customers into accepting the offer made for their gold items. In some cases, jewellery had been melted down before they had accepted the quote. "These days we see more and more new business models which involve consumers distance-selling goods to firms. These options are good for consumers, providing business practices are fair. Where we see problems... we are keen to intervene early so that these markets develop with an appropriate level of consumer protection," says Heather Clayton of the OFT in The Daily Telegraph.

A new law comes into effect in the spring that requires all motorists to insure their vehicles unless they have been formally declared as off-road. So if you have a rarely used car sitting in the garage, or a motorhome you only use sporadically, be aware that soon they'll need to have year-round insurance. An effective date for the new law hasn't been set yet. But when it comes in anyone caught without insurance faces a penalty in excess of £1,000 and the possibility of their vehicle being destroyed. To avoid falling foul of the rules either get your vehicles insured or fill in a Statutory Off Road Notification (Sorn). The only vehicles that don't need one are those that have not been used or taxed since before Sorn regulations came into effect in January 1998.

Mortgage lending dropped at the end of 2010 with 4% fewer home loans granted in December compared to November, according to the Council of Mortgage Lenders (CML). But overall lending was up in 2010 compared to the previous two years. During the year, 529,300 mortgages were approved, up 3% on 2009. The value of lending also rose by 11% to £77bn. However, remortgages have hit a 13-year low. They have dropped 23% to 313,200 in 2010 compared with 865,800 in 2008. With lending criteria remaining strict, and lenders demanding an average deposit of 23%, the CML predicts that lending will remain flat in 2011.

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Tesco has launched an Isa-friendly 'retail bond' paying 5.2%. It's a reasonable rate, but you should be aware that these types of bonds aren't covered by the Financial Services Compensation Scheme. In the unlikely event that Tesco Bank goes bust, you could lose all of your money. The bond matures in 2018 and the minimum investment is £2,000. You can't buy the bond direct. Interested investors should talk to a stockbroker.

EDF has become the last of the big six energy providers to announce price hikes this winter. EDF promised last autumn not to raise prices until March, but has now said prices will go up by 6.5% for gas and 7.5% for electricity from 2 March. This will add £68 a year for the average dual-fuel customer. Anyone on a fixed, capped, or Energy Assist tariff will not be affected.

Ruth Jackson-Kirby

Ruth Jackson-Kirby is a freelance personal finance journalist with 17 years’ experience, writing about everything from savings accounts and credit cards to pensions, property and pet insurance.

Ruth started her career at MoneyWeek after graduating with an MA from the University of St Andrews, and she continues to contribute regular articles to our personal finance section. After leaving MoneyWeek she went on to become deputy editor of Moneywise before becoming a freelance journalist.

Ruth writes regularly for national publications including The Sunday Times, The Times, The Mail on Sunday and Good Housekeeping, among many other titles both online and offline.