Week Unzipped: Passenger claims service launched as year of volcanic activity predicted

SCOTTISH law firm Russel & Aitken has launched a new advice and claims service for travellers who lost money as a result of the volcanic ash cloud.

The Association of British Insurers estimates that travel insurers will pay out 62 million in compensation for cancelled flights. Russel & Aitken's new service will advise customers of their rights and whether they can claim for other financial loss. The firm will also process relevant claims on the customer's behalf.

The April disruptions to air traffic have already cost the industry up to 2 billion as 100,000 flights were cancelled and 10 million travellers left stranded, according to the European Commission. Some volcanologists predict the eruption in Iceland could continue for up to a year.

The new service is available at the firm's offices in Falkirk and Alloa, and offers a free initial 15-minute interview.

Repossessions fall

REPOSSESSIONS declined in the first three months of the year but homeowners are still vulnerable to economic shocks, according to the Council of Mortgage Lenders.

The figures show 8 per cent fewer repossessions between January and March compared with the last three months of 2009. Last year saw a 15-year high for repossessions, with 46,000 households losing their homes.

The number of home arrears also fell in the first quarter of this year. Homeowners with outstanding payments worth at least 2.5 per cent of their mortgage debt dropped to 186,300 from 196,400 in the final three months of 2009.

However, the CML warns that improvements were mostly among lower arrears bands, rather than those with more substantial arrears. Although low interest rates are keeping households afloat, those already experiencing problems are struggling to get back on track.

Research from homeless charity Shelter revealed that 29 per cent of borrowers had not thought about how they would meet their mortgage repayments it interest rates rise.

The CML, together with charities Shelter and Citizen's Advice, have written to the new Chancellor, George Osborne, urging him to extend current support measures of the borrowers in most financial difficulty.

Buy-to-let levels off

ACTIVITY in the buy-to-let market has settled back to former levels following a surge in house purchases by investors taking advantage of the stamp duty holiday at the end of last year, according to the Council of Mortgage Lenders. The number of buy-to-let loans fell by 15 per cent in the first three months of 2010. The value of lending also declined by 12 per cent over the same period.

Bank complaints up

BANKS received more than two million complaints during the second half of last year, twice as many as they handled in the first six months, according to figures from the Financial Services Authority.

The steep increase is largely due to banks handling two years' worth of back-dated complaints about unauthorised overdraft charges. Around 1.5 million complaints involved product terms or disputed charges. The second highest level of complaints related to advice and sale of insurance products.

Financial services groups paid out a total of 283.6m in compensation, with banks forking out 202.6m.

Over-50s deal

THE Scottish Building Society has launched a new instant access account for the over-50s.

The Quicksilver account pays 1.25 per cent and replaces the Senior Scotsaver product.