Fraudsters using a phone scam to trick bank card holders into revealing their pin numbers stole £750,000 in the first four months of this year.

This is the same amount stolen through this scam in the whole of last year.

The fraudster telephones a bank customer, often someone elderly or vulnerable, telling them that their account has been subject to fraud and therefore their credit or debit card needs replacing.

The fraudster reassures the customer by suggesting they hang up and call the bank back, so they can be confident the call is genuine.

However, the customer is either given a bogus number or the fraudster stays on the line, tricking the customer into believing they are connected to the bank.

The customer is then told to key in their pin number on their phone and a courier is sent to collect the card, putting both card and pin number into the hands of the con men.

Detective Chief Inspector Paul Barnard, of the Dedicated Cheque and Plastic Crime Unit, said: “If you become a victim of this type of crime, you should contact your bank in the first instance.

“If you have friends or relatives who you feel may be vulnerable to this, please help them to be more aware of the potential risks and what to look out for.

Victims of the scan should have their loss refunded by the card holder.

In other banking news, both Barclays and Santander have been experiencing technical problems with their online banking websites, with customers unable to access their bank accounts online.

Santander has now resolved the issue, and Barclays is working to fix the problem with its site, which was re-launched in January following an upgrade.

Speculation that the Financial Services Authority would ban interest-only mortgages as part of its Mortgage Market Review has proved to be unfounded.

However, lenders will be required to monitor the performance of the investment product taken out by the customer to repay the mortgage at the end of its term.

Investments are performing poorly because of the weak economy and some people with interest-only mortgages are finding they have a shortfall in the funding they need to pay off their outstanding loan.

In December 2011 the FSA published proposals to limit interest-only mortgages to consumers with a “clearly understood and credible strategy” in place to repay the loan.

Lynda Blackwell, an officer in the Financial Services conduct policy division, said: “Some lenders would have liked us to ban interest-only.

“Our view is that interest-only is suitable for certain borrowers.

“We’ve said to lenders that we want you to make an informed judgement.”

The Mortgage Market Review is expected to help ensure that the mortgage market works in the best interest of both customers and lenders.

Some lenders have already withdrawn interest-only mortgage products from the market, while others offer them only to home-buyers with a deposit of between 50 per cent and 60 per cent.

In related news, Nationwide has reported a 44 per cent increase in gross residential mortgage lending to £18.4 billion.

This is particularly significant when compared with a market increase of just 5 per cent.

The building society has launched new mortgage products for holders of its FlexAccount.

Its new four-year fixed rate mortgage for Nationwide FlexAccount holders offers a rate of 3.89 per cent for loans up to 70 per cent LTV, while customers with a lower deposit are offered a four-year fixed rate at 5.99 per cent up to 90 per cent LTV.

A director of the Bank of England has warned that official intervention could be considered to end the ‘dangerous myth of free in-credit banking’.

Andrew Bailey has already spoken out against free banking in relation to the mis-selling of financial products.

In a speech made available to media, he reiterated his concern, saying that it will be difficult for banking reforms to be put in place while free in-credit is creating an unclear picture of the true price of banking.

Commenting on the need for free in-credit banking to end, he said: “this is not something that will happen spontaneously.

“It is hard for a single bank to break out of the existing situation without appearing to raise the price of its service to customers even though it may not actually be raising the price as a whole.

“And, it is hard for the industry as a whole to break out without appearing to collude.

“So, it may require intervention in the public interest.”

Mr Bailey also suggested that interest rates would remain at the historic low level of 0.5 per cent for some time, and offered the reassurance that UK banks have contingency plans in place in case Greece leaves the eurozone.

However, he warned that the euro zone crisis is the biggest risk to UK financial stability.

Mr Bailey will help to lead the Prudential Regulation Authority, a new body within the Bank of England, which will oversee the banking industry.

The Prudential Regulation Authority is being created under the Financial Services Bill, as part of a new system of regulation designed to prevent another banking crisis.

The Financial Services Authority (FSA) will close and the Bank of England will have greater regulatory powers.

A Financial Conduct Authority will be created to take responsibility for consumer protection and is expected to introduce changes to prevent further mis-selling scandals.

It is expected to work with firms on the design and testing of financial products, intervening at an early stage if necessary.

The Bank of England voted against a further round of quantitative easing, at its latest Monetary Policy Committee (MPC) meeting.

Just one member, David Miles, voted for further asset purchase to encourage growth in the UK economy, while the other eight members voted to keep the Bank’s quantitative easing programme steady at £325bn.

The minutes of the meeting note that “for several members, the decision not to expand the asset purchase programme at this meeting was finely balanced”.

The Bank is continuing to monitor the economic outlook and there is speculation that QE could restart in summer after deputy governor Charlie Bean suggested to the National Association of Pension Funds that significant deterioration could lead to further QE.

All nine members of the MPC agreed to hold interest rates at 0.5% at the May meeting.

At the time of the meeting the latest CPI inflation figures available were for March, when it stood at 3.5 per cent.

The figures for April have been released since the meeting, showing CPI inflation fell to 3 per cent in April.

Earlier this week the International Monetary Fund (IMF) urged the UK to consider implementing further QE and reducing interest rates, in the face of continuing economic weakness.

In its report the IMF acknowledged that the UK has made progress with its efforts to reduce budget deficit, but expressed concern that the country is back in recession.

“The hand-off from public to private demand-led growth has not fully materialized,” the report said.

The ongoing crisis in the eurozone, the UK’s largest export market, could lead to further economic deterioration in the UK.

The IMF warned that the crisis is the biggest threat to the U.K. economy.

“An escalation of stress in the euro area could set off an adverse and self-reinforcing cycle of lower confidence and exports, higher bank funding costs, tighter credit, and falling asset values, resulting in a substantial contractionary shock,” the IMF said.

Calls from people concerned about their debts with mail order catalogues accounted for more than 12 per cent of all calls received by National Debtline last year, compared with just 8 per cent in 2007.

More people were concerned about catalogue debt than about payday loans, mortgage or rent, according to the Money Advice Trust which runs the helpline.

National Debtline received a record 25,235 calls about catalogue debt in 2011 and it has already totted up a further 7,095 calls this year.

Joanna Elson, chief executive of the Money Advice Trust, said: “Catalogue debts go largely unmentioned in public these days, but advisers at National Debtline hear from nearly 100 people every day struggling to repay such debts.”

Customers buying goods from mail order companies are bound by a consumer credit agreement and can be taken to court if they fail to pay for their purchases.

National Debtline provides confidential and independent advice on how to deal with debt problems and the service is free.

The highest number of calls to the charity concern council tax arrears; credit and store cards; and bank loans and overdrafts.

Meanwhile, separate research by MoneySupermarket.com has identified a growing problem with grandparents and parents falling into debt because they are providing financial support to adult children and grandchildren.

The research suggests that 1.7 million grandparents and parents go into the red because they are supporting family members with so-called ‘greyday loans’.

In an online survey of 2,016 UK adults, MoneySupermarket.com found that 24 per cent of grandparents are using savings, credit cards, overdrafts and payday loans to help support their adult grandchildren.

An even larger proportion of parents – 32 per cent – are offering financial support to adult offspring.

Kevin Mountford, head of banking at MoneySupermarket.com said: “Taking out additional borrowing to support family members is an honourable thing to do but people need to consider how they will repay the debt and how this will impact their lifestyle, especially if they are in, or approaching retirement”.

HomeServe, which provides emergency insurance cover and domestic repairs to households in the UK, is to be investigated by the Financial Services Authority (FSA).

Issues over the possible mis-selling of household emergency policies were uncovered last October during an internal review at the Walsall-based company.

Homeserve’s call centre staff were found to be selling ‘Complete Cover’ policies as an upgrade to existing customers

Problems were also uncovered with how Homeserve staff were dealing with complaints.

It is believed that it is these ‘historic issues’ which will be investigated by the FSA.

In the face of the FSA enquiry HomeServe plans to streamline its business in the UK, with the number of UK customers being reduced from 2.7 million to between 2.2 million and 2.4 million.

It also plans to reduce its UK workforce by around 250 as part of the restructuring, having already announced the loss of 200 jobs earlier in the year.

The company will focus on strengthening partnerships with water utilities, manufacturers of installed appliances and financial services companies.

Richard Harpin, chief executive of HomeServe, said: “We took swift and comprehensive action to address the issues that we identified in the UK and are totally committed to restoring our customer focus.

“We are strengthening our management teams, retraining staff and continuing to make significant investments in customer service.”

The FSA investigation is expected to take several months to complete.

The news of Homeserve’s restructuring caused its shares to fall 23 per cent on the FTSE 250 Index, reducing the value of the company by nearly £200 million.

It was announced yesterday that NWF Group’s finance director, Johnathan Ford, is leaving to become Homeserve’s Chief Financial Officer.

Mr Ford will commence his new role at Homeserve in October.

Payday loan company Wonga used aggressive and misleading methods to collect debts from customers, the Office of Fair Trading (OFT) has found.

Wonga sent letter and emails to certain customers suggesting they had committed fraud and threatening to report them to the police if they did not act in the way Wonga suggested.

The company also made the allegations in phone calls to the customers.

Customers contacted in this way had either claimed money back from Wonga by reversing a card payment made to the payday lender, or had entered into debt management plans.

The OFT said that this behaviour was aggressive and misleading and warned the company that it would be fined up to £50,000 if it used similar business practices in the future.

David Fisher of the OFT said: “I would like to make it clear to businesses that they must not adopt aggressive or misleading practices with their customers.”

Wonga is appealing against the OFT’s decision and said a few letters accusing customers of dishonesty had been sent more than 18 months ago to customers genuinely suspected of dishonest conduct but these letters were no longer used.

It also said that the phone calls were made using a script that was withdrawn in January 2010.

In a statement, Wonga said: “Wonga has put in place procedures to ensure these communications cannot be repeated and it has provided assurances to the OFT to that effect.

“In particular, current fraud processes ensure cases of suspected fraud are always referred to an in-house team of experienced professionals and suspicions that a customer may have acted fraudulently are not communicated to the customer.”

In related news, the Citizens Advice Bureau was criticised yesterday after its Medway branch revealed Wonga had provided it with funding to carry out a survey about peoples’ employment, income and debt.

Dan McDonald, the chief executive of Medway CAB, said: “On the surface this may seem an unusual partnership, bearing in mind that Medway CAB has been at the forefront of the campaign to highlight the risks associated with payday loan lenders.

“However, our knowledge and experience leads us to believe that there is a great deal more work needed to understand the issues and the challenges associated with the costs of day-to-day living.

“I have had a number of open and frank discussions with Wonga and have been impressed by their commitment to this independent inquiry.”

National Savings & Investments (NS&I) has re-launched its Investment Account at a higher interest rate than it previously offered.

The account now offers 0.75 per cent before tax, compared with between 0.2 and 0.3 per cent previously, depending on the account balance.

Deposits and withdrawals on the account can no longer be made at Post Office branches as the account has been made postal only as part of a modernisation strategy and pass books are no longer used.

Regular deposits to the account can be made through a standing order.

Existing Investment Account holders will automatically have their investment held at the higher rate of interest, or can have their balance repaid in full.

They also have the option to transfer their balance to NS&I’s Direct Saver account which pays 1.5 per cent before tax.

Jane Platt, chief executive at NS&I, said: “The decision to move the Investment Account to postal only reflects the growing number of customers who are now managing their NS&I savings directly with us.

“I’m pleased that we can now offer Investment Account savers an improved rate of interest.”

Other changes being introduced by NS&I include the closure of the Easy Access Savings Account from 27 July.

Consumer group Which? has warned that NS&I’s relaunched Investment Account still offers poor value compared with similar accounts offered by banks and building societies.

New internet bank GE Capital Direct has recently launched two easy access savings accounts.

The GE Capital Direct Saver pays 2.35 per cent before tax, with no initial bonus, while its second new account pays 2.65 per cent before tax, which includes a 1.15 per cent bonus for the first year.

Sainsbury’s Bank’s eSaver Special offers 2.7 per cent before tax.

Two in five property owners planning to sell in the next year are planning to ‘trade down’, compared with one in four who plan to ‘trade up’.

A survey by property website Rightmove found that moving to a smaller home is the main reason for moving in nine out of the ten regions in the UK.

London, where there is a greater proportion of wealthy homeowners, is the only region where the majority of house movers want a larger property.

Rightmove attributed the downsizing trend to the UK’s aging population combined with a shortage of mortgages for potential first-time buyers.

Miles Shipside, director of Rightmove, said: “The ability to trade up is a vital component of a healthy housing market.

“There are more old people at the top of the chain trying to downsize and fewer at the bottom trying or able to trade up.

“Some people may be facing redundancy and looking to reduce their outgoings, and others may be looking to supplement their underperforming pension pots.”

There was a 10 per cent fall in the number of properties coming to market last month and demand from first-time buyers has fallen substantially since the stamp duty holiday on homes between £125,000 and £250,000 ended in March.

There is growing concern that the supply of mortgages could be further hampered if Greece defaults on its debt.

The decision by Santander UK to scale back its lending to home buyers from 25 per cent to 14 per cent will add to the mortgage scarcity.

Santander’s decision follows a downgrade of its credit rating by Moody’s.

“With overall market volumes already in the doldrums, we need a fair and consistent wind of mortgage lending to prompt a speedier housing market recovery,” Mr Shipside said.

Separate research by Lloyds TSB Private Banking suggests that house prices have contributed to a 55 per cent increase in household wealth to £242,000 over the past decade.

Families are now worth an extra £86,000 according to the study, largely because the value of property has outpaced rising mortgage debt.

The proportion of people with no pension savings has grown from 20 per cent to 22 per cent over the past year, according to Scottish Widows’ latest survey.

The pension provider surveyed 5,200 adults in the UK, aged 30 or over, and earning at least £10,000 a year, for its annual review of pensions.

Ian Naismith, head of pensions market development at Scottish Widows, said: “People failing to make any kind of provision for their later years are in a particularly precarious position.

“Some may think that they will be able to fall back on the state pension, property or a partner’s pension and while these options may provide some level of support, saving nothing for retirement could be a fast track to financial problems.”

According to the report, people who are saving for their pensions tend to have unrealistically high expectations of the value of the future pension they will be able to afford.

Many workers could be facing poverty in old age, Scottish Widows suggests, with just 46 per cent of people saving the minimum amount in a private pension needed for a comfortable retirement, compared with 54 per cent in 2009.

The government’s planned reforms of the state pension should help parents who stay at home to look after their children, and other carers.

Under the reforms they will be treated as if they had worked throughout their lives and will receive the full-state pension for the first time.

Previously, workers needed a minimum 30 years of contributions to receive the full pension, with the entitlement being reduced for each full year they were not employed.

Mothers and carers who retire from 2015 will receive a flat-rate payment of at least £140 a week under the reforms, which are being introduced to simplify the state pension system.

However, the state second pension will end, meaning that wealthier workers will be worse off.