Monday, 28 January 2013

Book Review: "Money Fight Club" by Lindsay Cook and Anne Caborn

@Sophie Robson

We have known since the financial crisis that there is a gap between ordinary people's financial knowledge and the level needed to understand even simple financial products. Like-for-like products are notoriously difficult to compare, and the financial services industry does not always make it easy for us to do so. Nor has the government made it particularly easy for ordinary people, with its relentless intervention into pensions policy, tinkering with rates of inflation, and latterly, changing the entire regulatory structure, with the breaking up of the FSA. Although it looks as though banks are increasingly being held to account by the government, the media and taxpayers, consumers still need to do their bit to equip themselves with financial knowledge. 

View fightclubjacket.jpg in slide show

The problem with most people is that, at some stage in their lives, they have missed out on the basics. Numerous studies have found that young people feel confused and lack confidence when faced with ‘money issues’. Jargon holds many back: one study, published by MRM, found that young people are more likely to understand a foreign language than some basic financial terminology. Sadly, this can have a detrimental effect when it comes to making important financial and consumer decisions, with all too many people feeling powerless to challenge banks and businesses, and too willing to give up when faced with injustices, such as misselling.

Luckily, a new e-book; "Money Fight Club", by Lindsay Cook and Anne Caborn, arms them with enough knowledge to navigate their way through any purchase. This is a concise guide to knowing your rights, whether you are buying a loaf of bread, heating your home, or opening a savings account, and should be regarded as a blueprint when making any major consumer decision.   

"Money Fight Club" assumes little prior knowledge, and covers a wide range of scenarios. It teaches you how to make a complaint, by email or by phone - looking at body language and tone of voice for face-to-face issues and for written complaints, stylistic aspects, such as who to address it to, and how out to find details like this. It you through the psychology of merchandisers: apparently, giving you too much choice, and offering confusing 2 for 1 deals is a well-known marketing technique - confusion marketing (should have guessed by the name really). 

There is a much needed section on knowing your rights, which lays out relevant legislation on important matters such as the Sale of Goods Act, Trade Description Act, Consumer Credit Act, Distance Selling Regulations and the Data Protection Act, all of which govern where you stand if a purchase you make turns out to be less than satisfactory. Moreover, there is a comprehensive list of schemes and regulators - from the Financial and Pensions Ombudsman Schemes to Ofgem (the energy watchdog), Ofwat (water) and Ofcom (communications - so TV, postal services and satellite companies to name a few). Everyday decisions such negotiating household bills are also dealt with in detail. Tips are given on how to avoid paying extortionate charges on gas and electricity - or at least how to anticipate these bills more easily. As for water, well, it seems that this was charged at a fraction of the cost of today's prices before privatisation took place in the 1980s... 

But this book comes into its own when dealing with financial matters. An ongoing concern is that consumers are not given access to the information that would allow them to fight their corner successfully. "Money Fight Club" does a great deal to put this worry to bed. It helps the reader through the array of financial products they are likely to encounter: pensions, savings accounts, current accounts and credit cards to name but a few, and demystifies the language that holds ordinary customers at the mercy of powerful financial institutions. It takes both a historic look at financial services, running us through recent misselling cases, such as PPI, as well as explaining how to avoid getting into similar situations in the future, and making your money work harder for you.

This is exactly what we need in today's world: a clear, concise guide to help people take back control of their finances. As the authors assert, the fightback has indeed begun.       

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