Strong warnings from the Office of Fair Trading (OFT) have caused Barclaycard, HSBC and Lloyds TSB to reduce their credit card penalty charges by almost half.

On 5th April, the OFT announced that it considered the high penalty charges made by many credit card companies to be unfair and illegal. It warned companies that if they would be defending their charges in court if they didn't take swift action to bring the charges down to a maximum of £12. Penalty charges are made when a borrower misses a payment date or exceeds their credit limit, and should only be set to cover certain administrative costs.

Yesterday the BBC reported that Barclaycard, HSBC and Lloyds TSB had all reduced their penalty charges by almost half from £20 to the new £12 threshhold.

The Office of Fair Trading will today start an investigation into Payment Protection Insurance (PPI), which is often offered by lenders with loans to cover monthly repayments should the borrower get into financial difficulties.

On 10th December last year, we reported that Citizens Advice considered the way this insurance was sold as a protection racket with high premiums and complicated practices that made it difficult for customers to understand the product they were buying. Worse still, borrowers sometimes found that making a claim was impossible due to conditions of the insurance.

The charity Citizens Advice is warning consumers to be wary of lottery scams that inform people they have won, then trick them into paying money for prizes they will never receive.

The charity explains that scamsters contact people through mailshots, faxes and cold calling by phone to explain that their ‘lucky numbers’ have come up and they have won an exclusive prize or exotic holiday. Many people are so excited about their win that they respond by giving their bank details to claim what they have been led to believe is theirs. But the prizes do not exist, people are conned out of their money, and are left feeling vulnerable and all too often in a difficult financial position.

The national charity Citizens Advice is warning of increasing numbers of people falling for psychic products and services which are in fact scams.

The CAB is worried about false psychics who operate a scam by placing advertisements in newspapers, magazines and the internet and offer to send astrology readings for a fee. In some cases they use scare tactics and send out unsolicited mailings with an aggressive tone, suggesting that the recipient will experience some misfortune if they do not respond and send the money requested.

A consumer watchdog is urging companies to improve the support and assistance they offer to people who fall victim to identity theft.

The National Consumer Council (NCC) wants companies to set up dedicated ID fraud customer helpdesks where victims would be allocated a named helper to provide practical help, support and reassurance throughout the time it takes until everything is sorted out. In some sectors – banking, insurance, credit, mobile phones and the utilities, for instance - a sector-wide ID theft support service would be essential.

Increasing numbers of people are falling victim to a con where companies charge money to arrange a loan which often never materialises. Such arrangement fees are rarely returned, even when then the loan doesn't arrive or is offered on different terms.

Evidence from Citizens Advice Bureaux shows that the loan companies target people who can’t get loans from regular sources, often people with a poor credit rating and on a low income who really cannot afford to lose the arrangement fee.

Hard to believe, but some UK companies keep making the same mistakes. New research shows that arrogant and indifferent companies get hit where it hurts - the bottom line.

'The Stupid Company: How British businesses throw away money by alienating consumers' is a report authored by Philip Cullum for the National Consumer Council. It reveals a sorry picture of businesses over-promising and under-delivering, treating customers in a clinical and patronising way, and being incapable of getting the most basic things right. Too often they focus on making a quick profit at the expense of the longer-term relationship.

Worried by increasing evidence of financial exclusion, Citizens Advice is calling on the major banks to ensure that it makes banking services available to the most needy and vulnerable.

The charity paints a mixed picture, acknowledging the inclusive efforts of some banks whilst slamming practices such as penalties of up to £39 for failed direct debits charged by others.

2.8 million Adults in the UK do not have access to a bank account, despite such facilities being essential to function in everyday life. Evidence held by the charity points to serious consequences of this exclusion, including escalating debt and the threat of homelessness.

From today, consumers have new guidance for choosing a lawyer. A seven step guide backed by the government and consumer agencies will help you ask the right questions to ensure you get good legal advice.

Market research shows that most people don't know how to get the best deal from a lawyer. These questions will help you understand the service you are buying:

• What will the legal adviser do for me?
• How much will this legal adviser cost me compared with others?
• What do I get for my money?
• How often has the legal adviser handled this type of work?
• How long will it take for the transaction to be completed?
• What can I do if something goes wrong, or I am not satisfied with the service provided?
• Have I got a good deal?

National debt counselling charities are reporting significant levels of new cases since Christmas. Debt helplines are particularly busy with one charity urgently taking on additional staff to cope.

Callers are being warned that at busy times charities may simply not have enough staff available to answer calls, and to try again at another time. National Debtline report receiving nearly 13,000 calls in the first two weeks of January.

The New Year is traditionally a busy time for debt counselling organisations, but a deliberate debt awareness campaign by several organisations has likely left more consumers willing to seek early help with any problems.