So what’s the problem? Well, they’ve confirmed that they’ve still got a lot of mess to clean up, from their errors in the past, adding £1bn to their cock-up pot.
Barclays said £250m has been put to one side for customer redress on packaged bank accounts, which basically means that they’re sorting out allegations of misselling. They’ve also kept £750m aside over the PPI scandal.
In total, they have a bill of £6bn for all the stuff they’ve messed-up on.
John McFarlane, the person who replaced Jenkins earlier this month, said that the bank need to get their act together, and that they need to “accelerate growth in earnings”, cut costs, and “streamline and eliminate unnecessary and cumbersome bureaucracy”. ”There is a lot we can do to accelerate our progress and the work has already begun,” said Mr McFarlane.
There’s been rumours doing the rounds that suggest Barclays might have to axe up to 30,000 jobs too, which is lousy news indeed.
Apple Pay has been getting loads of attention that other phone makers’ banking apps haven’t. Such is life. If you don’t know how to use it, but would like to, click here.
One of the notable things about the app, was who hadn’t signed-up with it at the time of launch. Most of the banks were on board, and now, at last, HSBC and First Direct are clambering aboard.
Both banks will now allow their credit and debit cards to be linked with Apple Pay, as well as customers now being able to pay for London Underground tickets, Starbucks coffees or McDonalds meals using their iPhone or Apple Watch.
Now, the only bank that are dragging their heels are Barclays. Initially, they had no interest in Apple Pay as they were doing their own thing with contactless payments and wearable technology.
However, customers for Barclays kicked-off and the bank decided it might be a good idea to get with the program. It is thought that they’ll be teaming up with Apple at some time in the Autumn.
The payday lender, Cash Genie, has been ordered to pay £20m to people they’ve ripped off. The lender was told by the Financial Conduct Authority (FCA) to dole out the money to more than 92,000 customers.
Turns out that they’re been ripping off customers in a number of ways, with Cash Genie charging fees which they were not entitled to, according to customer contracts. In some cases, they charged people who weren’t able to repay their loans £50 to transfer them to their own debt collection firm, Twyford Developments.
Basically, they were taking money needlessly from people who were already struggling with debt.
It transpires that Cash Genie were also rolling over and refinancing loans without customers’ consent, which of course, all means that people in financial hardship were being hit with extra interest and additional costs.
Cash Genie also traded as the online brands txtmecash and paydayiseveryday, with customers advised to go to these websites on the promise of a fresh loan. Then, when customers went to these sites, they were used to harvest banking information so they could take payments from existing loans without permission.
So, Cash Genie will reimburse some people and write-off the debts of others.
Linda Woodall of the FCA said: “We expect all firms to notify us of any unacceptable past or current practices and provide appropriate redress to anyone affected.”
What Do I Do Next If I Was A Cash Genie Customer?
For the time being, if you’ve been swindled by Cash Genie, you don’t need to do anything. Cash Genie is going to contact affected customers by 18th September.
For the time being, sit tight and wait for Cash Genie to get in touch with you. Do not appoint a claims management company to sort this out either, as they’ll charge you for a service that you won’t need.
If you feel that it is important to talk to someone, you can contact the Cash Genie Customer Service team on 0333 366 0023, or email them at firstname.lastname@example.org or by letter at Cash Genie, 2 Reavell Place, Ipswich, Suffolk IP2 0ET.
If you’d prefer, you can get in touch with the FCA by calling 0800 111 6768 or 0300 500 8082, or email them at email@example.com.
It’s rare that economists aren’t gloomy, but it seems everyone is feeling more positive about their finances. The latest Nielsen consumer confidence survey shows that UK confidence has overtaken the global average for the first time in more than nine years- last time we were this happy financially, Tony Blair was telling us things could only get better for the third time and the official interest rate was nine times higher at 4.5%
British consumers are also more confident than those in Germany for the first time in five years and we’re now second only to Denmark in confidence ratings throughout Europe. We’ve also stopped shopping around so much, with the switching of grocery brands to save money now at its lowest level since late 2009.
A different study by Lloyds Bank, of more than 2,000 people aged between 18 and 75, also reported an increase in consumers’ confidence. Its survey on spending power found that 70% of empty-nesters- people aged 45 or more whose children had left home- described their financial situation as good, compared with 61% of parents aged 25 and over with younger children and falling to 58% cent of young singles aged between 18 and 24 with no children.
And the Lloyds Bank Spending Power report suggests that confidence is rising with people’s confidence in their personal financial situation increasing by 5 percentage points. And the outlook is rosy- 31% of young single people aged between 18 to 24 said they expected to be able to save slightly more in six months times than they do at present, although this figure falls to 11% for those aged 45 or over, who already think they’re in a good position financially.
Patrick Foley of Lloyds Bank said: “Consumers remain in good spirits, with sentiment buoyed by a combination of strengthening wage growth and muted price pressures,” meaning that lower prices and stagnantly low interest rates, combined with wage increases mean we all feel richer.
And Asda have quantified just how much richer we are. Last week, Asda’s latest Income Tracker report revealed that UK households have an average of £189 of discretionary income to spend each week, which is £18 more than this time last year, a figure that has been consistent for the last quarter. So what are you spending your extra £18 on?
Unsurprisingly, rent is going up and up, with a third of letting agents seeing rents increase between May and June, which is the biggest climber of 2015. Of course, this is going to continue, as 80% of agents surveyed have said that private rents are set to rocket in the next 5 years.
Why? Everyone is pointing fingers at the Budget, as the impact of it trickles through to the buy-to-let market.
George Osborne has made a number of promises to get tough with the tax relief enjoyed by buy-to-let landlords, however, letting agents say that tenants are going to inevitably pick up the slack. So, while private landlords can claim tax relief on monthly interest payments at up to the 45% top level of tax, as of April 2017, this will be at a basic rate of 20%.
Not only that, but from April 2016, the ‘wear and tear allowance’ will be axed too. Basically, there’s a number of things that landlords will want to claw back, and of course, the simplest way they can do that is by putting up people’s rent.
The Chancellor thinks that the changes being brought in will ’level the playing field for homebuyers and investors’, but not a lot of people agree with that.
“Findings like this continue to prove that the housing crisis isn’t going to disappear anytime soon and it will take a while before we see steps heading in the right direction,” said David Cox, managing director of the Association of Residential Letting Agents, which compiled a report on all this.
‘The impact of the Chancellor’s reductions to the amount of tax relief buy-to-let investors can claim – announced in the Budget this month – will affect the cost of renting over the coming months and is likely to mean it will take even longer to see any improvement in affordability in the private rented sector.”
With private rents growing faster than the price of houses in June, and the average rent at an all-time high of £789 last month, something needs to be done, and quickly.
So what’s the craic? Well, they said that their statutory pre-tax profit for the six months (to 30 June) weighed-in at £23.2m compared to £41.7m in the previous half-year, and one of the things that hurt them was the takeover by Sabadell.
TSB’s statement said: “Lower average loan balances and the recognition of the full-year Financial Services Compensation Scheme levy charge of £14.8 million in H1 (first half) 2015. Statutory profit before tax was further reduced by Sabadell transaction related costs.”
That said, the bank’s chief executive, Paul Pester, is bullish, saying that TSB is going “from strength to strength”. He pointed out that the bank is delivering a 6.7% share of all new and switching bank accounts in the last quarter, which is nice. They also launched a new mortgage broker service, which will coin it in for them.
Pester added: “Customers are really starting to see TSB as a destination for their mortgages, making us one of the fastest growing mortgage providers in the UK.”
“The completion of the Sabadell Group’s acquisition of TSB at a premium of over 30% to our IPO share price is recognition of the excellent progress and great potential of the Bank. We remain unwavering in our mission of bringing more competition to UK banking and, with the extra firepower of Sabadell behind us, we look forward to accelerating our growth plans and continuing to take on the big banks that have had a stranglehold on the UK market for far too long.”
There’s a limit on how much you can spend via a contactless payment, but the watchdog found that, by buying some cheap contactless card-reading technology, they were able to remotely make off with key details from a contactless card, and then use the info to buy stuff, including a telly that was worth £3,000.
That is considerably more than the £20 limit (increasing to £30 in September).
Which!!! tested 10 cards, and they found that, via software from what they call ‘a mainstream website’, they could read the card number and expiry date from all 10 cards. Don’t worry – the cards came from volunteers.
They were not able to get the CVV security code from the back of the cards, but it turned out that this didn’t matter, as they were able to make purchases without the cardholder’s name or CVV code.
With their dodgy reader, a mere tap saw Which!!! getting enough details to enable a trip to the online shops, and thanks to online transactions not being subject to a limit, some scamster could go crazy with your card.
Peter Eisenegger, a security expert who helped develop EU standards for contactless cards, told Which!!! that it would be possible for crims to get a card reader that could lift your details from further away than the one in this test.
He said: “It’s vital to protect consumers from fraudsters who have the knowhow to develop mobile card readers with much greater reading distances than those used by retailers.”
The Consumer Finance Association said that these new rules are the reason that there’s been a 70% reduction for those wanting to access short-term credit. When the Financial Conduct Authority started to play hardball with payday lenders, people wanting cash started to look elsewhere.
And while, according to Citizens Advice, the number of complaints and problems about payday loans have halved on the previous year, the CFA ‘Credit 2.0′ report says that people have gone to nastier lenders.
CFA chief executive Russell Hamblin-Boone said of their findings: “Credit 2.0 takes a fresh look at alternative forms of credit, including short-term loans, and shows that turning off the credit tap has had no impact on demand or debt levels. It is an attempt to educate all those who continue to call for further restrictions on lenders without considering the consequences for millions of families.”
“Our analysis of hundreds of thousands of loan applications proves that borrowers are being excluded from credit and concerns are growing for how they are filling the gap in their finances. It’s time to draw a line under the attacks on short-term lenders, recognise the huge improvements in lending and accept that we have a highly-regulated, legitimate market to keep people out of the hands of unscrupulous, illegal lenders.”
“The report shows the scale of the challenge for the regulator in finding the right balance between consumer protection and maintaining a competitive alternative credit market.”
What exactly is the scale of the challenge? Well, the report reckons that 39% of payday loan customers don’t have any other access to obtaining credit. The report adds that credit unions are not a viable option for many, and that trad. arr. lending services are outdated, being usurped by new technology.
Hamblin-Boone added: “The economy is growing again, but the financial landscape has changed forever. Technology is changing the way we live and our ‘instant society’ demands quick decisions, simple products and convenient ways to borrow small sums for short periods of time. Critics of innovation that refuse to embrace the change by trying to hold back the tide could find themselves swept away by modern life.”
The best things in live are free – but you can give keep them for the birds and bees, I want… well… a card transaction or an online payment would be nice, actually.
You see, for the first time, cold hard cash is not the favoured method of paying for stuff in the UK, as cards and online transactions have overtaken the use of coins and notes. You want stats? Figures show that, last year, £19.8bn was spent using cards, online payments or cheques while £18.3bn was paid in actual physical money.
Of course, this doesn’t mean cash is going to vanish overnight – it is really pathetic to see someone trying to ‘make it rain’ in a stripclub by sending money via PayPal. No-one ever flaunted their wealth by simply pointing at the banking app on their mobile. You can’t really 2p someone with BitCoins.
Either way, the Payments Council reckon that, by 2024, less than a third of the money we spend will be in cash. And it looks like, with the advent of contactless payments and Click And Collect services, that people will have less reason to carry loads of money about their person, which is obviously bad news for muggers.
Stats show nearly 1-in-10 people say they now use cash machines less than once a month.
The PPI mis-selling scandal trundles on and, in vaguely good news, complaints about them have halved in a year. However, don’t be fooled, as PPI is still a massive issue, dwarfing most others. Basically, it won’t go away.
The Financial Ombudsman Service, which deals with all the unresolved cases, said that they’d received 204,943 complaints about PPI in the 12 months to the end of March, which is still a shedload. Other complaints about financial products don’t even come close.
The ombudsman reckons that PPI cases could still be dogging everyone for a while yet, and could take years to work through.
So far, over £24bn has been paid out via a gigantic programme of compensation. There’s still a chance that the banks are being idiots about the whole thing, still!
The Financial Ombudsman Service found in consumers’ favour in 55% of cases over the year, which tells you how shifty the financial institutions who were selling PPI, have been. Cases are still coming to light, with some banks contacting customers to tell them that they’d applied PPI to credit cards without ever telling customers. Worth ringing your bank up to see if you’re in for some compo.
This performance comes on the back of a drop of 60% in world oil prices since last summer, and while BP have made some ground back on that, the whole industry is looking at ways of saving money, which means cutting back on ‘non-core operations’.
Chief executive Bob Dudley said: “We are resetting and rebalancing BP to meet the challenges of a possible period of sustained lower (oil) prices. Our results today reflect both this weaker environment and the actions we are taking in response.”
BP’s woes were solidified thanks to their exposure to sanctions-filled Russia (thanks to their 20% stake in Rosneft), with profits from Russia’s largest oil company dropping by 65%. Oh, and let us not forget that BP have a $332m charge hanging over them thanks to their part in the Gulf of Mexico disaster five years ago.
However, it is the price of crude oil that’s giving them a kicking. Last year, BP could charge $108 per barrel, while now, it is more like $54.
Dudley continued: “We are continuing to progress our planned divestment programme, we are resetting our level of capital spending, and we are addressing costs through focusing on simplification and efficiency throughout BP.”
Avid BW readers will know that Wonga is in a complete mess at the moment, and some fear that it could actually go under.
They made a £37.3m loss in 2014.
However, the payday lender might have a trick up their sleeve as they are weighing up a name-change as they look to replace their toxic brand. With a new name will come a new range of products, according to bosses.
“With the cap on interest rates and lower fees, the margins have shrunk for individual profits,” said chief finance officer Paul Miles. “If we were setting up from scratch, we could build a sustainably profitable business. But we have the issue of our legacy, and how we manage our cost base.”
Wonga’s UK gaffer, Tara Kneafsey added: “We have worked hard to repair our position with the short-term loan product, and coming out of that we have 600,000 loyal customers who like the brand and use the product in the right way. But in the wider 13m market, we have to ask how far the brand travels. There are different customers with different needs.”
So with that, comes a rebranding: “No puppets will feature, nor anything that looks like a puppet,” confirmed Kneafsey. Not surprising as the ad company that came up with the puppets won’t have anything to do with Wonga.
The Government confirmed a couple of months ago, that the fee for issuing a money claim for anything worth more than £10,000 would be increased to 5% of the sum claimed, which has left one lobbying group outraged at the ”astonishing” fee increases of up to 600%.
Under these new rules, for example, fees on a claim worth £300,000 have been raised to £8,080, where it would have once been £1,920. That’s a rise of 421%.
Director of policy at the British Chambers of Commerce, Adam Marshall, said: “We remain concerned that a lot of companies in supply chains could be dissuaded from using the courts to resolve long running late payment disputes.”
“At a time when the situation seems to be getting worse not better, restricting access to one potential remedy is not encouraging.”
The Government won’t be raising the cost of getting a divorce and other fee reforms, mercifully. Justice Minister Shailesh Vara said: “Access to justice is a fundamental principle of our legal system and this is not threatened. 90% of the claims will be unaffected by these changes and waivers will also be available for those who cannot afford to pay. Our courts play a critical role and it is important that they are properly funded.”
“It is only fair that businesses and individuals who can afford to pay and are fighting legal battles should contribute more in fees to ease the burden on hardworking taxpayers.”
“Court fees are a small fraction of the overall cost of litigation and Britain’s reputation for having the best justice system in the world remains intact.”
The never-ending saga that is the misselling of PPI to the people of the UK rumbles on, taking a fresh turn with Santander’s UK wing adding more money to the naughty pot as it looks like there’s going to be more compensation being paid out to customers.
Sky News has found that the bank, alongside announcing their full-year results, will also be putting £20 million aside for PPI misselling, which will be the third time they’ve done it over the scandal.
This follows the news that the FCA are still looking into this giant mess, and that it looks like there’s going to be a time-limit added to proceedings in a bid to get this all sorted, once and for all.
The Financial Conduct Authority (FCA) said it would “consider whether further interventions may be appropriate – which could include a consumer communication campaign; a possible time limit on complaints; or other rule changes or guidance – or whether the continuation of the PPI scheme in its current form best meets its objectives”.
Since January 2011, the various banks involved in this fiasco have handled over 14 million PPI consumer complaints, upholding somewhere in advance of 70% of them, paying out billions in compensation.
Santander themselves, put aside £751m in 2011 to give to customers, and a further £65m in 2014. And now, there’s going to be a further £20m, which adds to to a whole lot of money.
A time limit is expected to be welcomed by Santander, and to be honest, everyone else involved in this as it would be beneficial for not just the banks, but for customers too.
If you think you’re owed compensation from your bank, wait until the official announcement tomorrow and they’ll invariably be in touch. Failing that, call the bank at 0845 600 6014 on a landline, or 0345 600 6014 from a mobile, 8am to 6pm Monday to Friday and 9am to 4pm on Saturdays. Or you can do it online.
The PPI debacle has become one of the most shameful episodes in British banking of the last ten years. And there’s quite a range of knobbery to select from.
A whopping £17.3 billion has now been paid out, after PPI was ruled to be an utterly despicable piece of mis-selling, often with no actual thought as to whether the customer could pay it back or not.
Payment Protection Insurance or PPI, was meant to protect borrowers in the event of sickness or unemployment, but were often sold to those who would have been ineligible to claim.
The Financial Conduct Authority (FCA) said it would use its findings, due to be published in the summer, to assess if the current approach to compensating customers is working properly. Because there just hasn’t been enough money squandered on this.
The FCA said in a statement: “The FCA will then consider whether further interventions may be appropriate, which could include a consumer communication campaign; a possible time limit on complaints; or other rule changes or guidance, or whether the continuation of the PPI scheme in its current form best meets its objectives,”
“While this work continues, the FCA expects firms to continue to deal with PPI complaints in accordance with our requirements,”
Banks such as Lloyds, Barclays, HSBC and Royal Bank of Scotland have already set aside £24 billion to compensate consumers, with many of them wiping off the entire debt of customers
Since 2011, the banks have dealt with over 14 million complaints about PPI, and have got to around 70% of customers paid back.
There’s still around 4,000 complaints coming through the banks each week about PPI, so even if you have the slightest doubt, get in touch with them.
Honestly, you can’t trust anyone these days.