Nearly 1.4 million people in Scotland are worried about everyday money and two million do not know where to go for free, unbiased money advice, says the new national Money Advice Service which launched here this week.

The launch came in the week when bank advice came under fire in a BBC Panorama investigation, and four big banks had to be given more time by the FSA to deal with mountains of complaints about payment protection insurance (PPI).

The Money Advice Service website offers a 10-minute online health check, which produces a personal action plan to help people stay on top of their money. Funded by the Financial Services Authority, the MAS is independent and has 20 advisers on the ground in 13 areas, in partnership with Citizens Advice. Already running is a TV campaign with the theme of unbiased, independent advice which is also free, as “a breath of fresh air”.

The use of the words “advice”, “independent” and “unbiased”, has upset fee-based independent financial advisers, who have spent the past few years being told by the FSA that only they will be allowed to brand their service as independent financial advice.

Stephen Gay, of the Association of IFAs, said the public may be confused or misled by the ads. He said: “What the public understands by advice is going to somebody who knows more about a particular subject, who will help, who is on their side and, most important, who will take responsibility for that advice.”

But the FSA’s director of conduct policy Sheila Nicoll said: “The MAS is very clear that it is generic advice that it is providing.”

Gerard Lemos, chair of MAS, said in Edinburgh that the original title ‘money guidance’, as proposed by the Thoresen review, had been dropped because it had “not tested well” in trials. Mr Lemos said: “Our job is not to recommend financial services suppliers, we will say ‘get an Isa’. But our job is about decisions and action, not just information and education, that is the shift we have made.”

He added: “Advice is not going to deal with not having enough money, what it can do is put you in control of your situation better right away, and help you plan for the long-term.” MAS was keen to see people set up self-help groups around financial problem-solving, Mr Lemos said.

Alex Neil, Cabinet Secretary for infrastructure and capital investment, said: “It is vital we do all we can to support people on low-incomes.”

He added Citizens Advice was delivering financial capability as part of Community Jobs Scotland training.

The Financial Ombudsman service said it has been receiving PPI complaints at the rate of 4000 a week, twice the rate of last year, and 240,000 complaints in total. It went on: “The majority of PPI complaints the ombudsman has received relate to sales made by banks... (we have) found in favour of consumers in three out of four cases resolved – and a far higher proportion in relation to some financial businesses.”

Lloyds Banking Group, Royal Bank of Scotland, Barclays and HSBC are now being allowed longer to deal with PPI complaints. Existing cases must be decided by the end of August, and new complaints within four months.

Barclays alone has so far said it will settle all old cases as quickly as possible on a “no quibble” basis.

Andrew Hagger of Moneynet.co.uk commented: “Not only will the ‘no quibble’ policy enable compensation to be paid more quickly, it will also slam the door in the face of the growing band of claims management companies looking to make a fast buck at the consumer’s expense.”

Jim Brogan, a retired railman whose PPI complaint The Herald highlighted last month, said he had been randomly telephoned last week from India and invited to make a claim against his bank. He added: “I didn’t get the company’s name but he was very confident and said he would send me the necessary documents. When eventually I told him I was quite capable of dealing with my own affairs the line went dead.”

Another complainant, Edinburgh health worker Karina Wajchert, is still trying to get the fee she paid to claims firm Belmont Thornton reduced from 32% to the 25% advertised by the firm.

Peter Vicary-Smith, chief executive of Which?, said other banks should follow Barclays’ lead. He added: “Banks also need to start the process of reviewing the thousands of complaints that they have unfairly rejected. Even without the delay caused by their legal action, some banks have a terrible record for dealing with complaints within the regulator’s eight-week timescale”

Which? figures show the proportion of general insurance or protection complaints resolved by major banks within eight weeks in the second half of last year ranged from 72% at Tesco and 65% at Barclays to 36% at RBS and 30% at Clydesdale.

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