Wonga offering business loans in 15 minutes
May 9th, 2012 • 3 Comments
When the government and banks fail to lend a hand, the sharks circle. In other completely unrelated news, payday lender, Wonga, are now tottering toward the business loans market. They’ll be offering loans of (up to) £10,000 once you’ve completed an application which takes a paltry 15 minutes.
Small businesses will be given the chance of applying for loans of between £3,000 and £10,000 on terms ranging from one to 52 weeks, repaid weekly. These loans will include an application fee and variable rate interest and start at around 0.3 per cent a week.
Wonga reckon that 55 per cent of small businesses applying for an overdraft for the first time last year were rejected and nearly half of first time loan applications were declined.
Errol Damelin, the company’s founder, said: “Small business lending is broken and we intend to use our platform to offer a real alternative.”
Of course, not everyone is happy about Wonga putting themselves forward as the knights in shining armour for small businesses. Christopher Shaw, CEO of alternative finance specialists, Platform Black, commented: “Taking on sky high APRs in order to meet immediate cash flow requirements is about the worst thing you can do as a business. With loans like this, there’s a high probability that short-term pain will result in long-term pain. Wonga say it’s inappropriate to look at the APR, as the loans are often taken out for as little as a week — and yet the longest term is 52 weeks. The UK’s SMEs need fuel to restart the economy, but not at these prices.”
You’ll notice, lawyers, that it wasn’t us who implied that Wonga are robbing bastards, right? Good.
Serious Organised Crime Agency kill credit card fraud sites
April 27th, 2012 • 3 Comments
The Serious Organised Crime Agency, or SOCA from now on to save us from typing all that out, have arrested two men and shut down 36 websites which were used to sell compromised credit and debit card data.
Working with the FBI and US Department of Justice, the police managed to arrest the men who are suspected of making huge purchases of data about cards from the sites. The sites specialised in flogging stolen payment cards and online bank account details.
SOCA say that these nefarious goons used e-commerce type platforms known as Automated Vending Carts which allowed criminals sell large quantities of stolen data. People trying to access these sites are now directed to a screen which tells them that the web domain has been seized by law enforcement.
As well as these arrests, the UK’s Dedicated Cheque & Plastic Crime Unit (DCPCU) seized computers which were most likely used to facilitate offences under the Fraud Act. As such, an AVC operator based in Macedonia has been arrested by the Macedonian Ministry of Interior Cyber Crime Unit (which sounds tremendously authoritarian). And this is a huge worldwide operation. SOCA has been working with the FBI, the BKA in Germany, the KLPD in the Netherlands, the Ukraine Ministry of Internal Affairs, the Australian Federal Police and the Romanian National Police, and to date, has recovered over 2.5m items of compromised personal and financial information in just 2 years.
It is thought that the prevention of this fraud has stopped in excess of £500m being swiped, although, there’s no telling how anyone comes up with a figure like that. Sounds impressive though.
Lee Miles, the head of cyber operations for SOCA said: “This operation is an excellent example of the level of international cooperation being focused on tackling online fraud. Our activities have saved business, online retailers and financial institutions potential fraud losses estimated at more than half a billion pounds, and at the same time protected thousands of individuals from the distress caused by being a victim of fraud or identity crime.”
Barclaycard PayTag: contactless payments are go!
April 19th, 2012 • 12 Comments
Barclaycard have gone and launched a thing that allows you bozos to the chance to make wave-and-pay purchases from their mobile phone. It is called the PayTag and is a quarter of the size of a trad.arr. credit card and can be stuck on anything you like. If you put it on your smartphone, you’ll look like you’re from the future, and that’s all you’ve ever wanted – to be an early adopter with something to moan about.
Anyway, this new thing is linked to you normal credit card account and allows you to pay for things in any “contactless” store, restaurant or whatever. Barclaycard are obviously hoping that this takes off seeing as the public hasn’t been overly enthusiastic about contactless payments thus far.
Next month, a select group of Barclaycard’s customers will be the first to receive PayTag, with everyone getting offered this upgrade (or sidegrade) eventually.
David Chan, CEO of Barclaycard Consumer Europe, said: “More than half of us say that the item we’re most lost without is our mobile phone, so we’re giving people the option of using them to make easy, convenient, everyday payments without the need to upgrade their current handset.”
So far, only coffee shops, some Boots stores and McDonalds have embrace this new form of paying, but it seems that this is the way things are going with Visa predicting that contactless point-of-sale terminals will rise by 50% to 150,000 in the UK in 2012.
Are you coughing up for needless insurance costs?
April 18th, 2012 • 9 Comments
Consumer champions of the world, Which!!!, have compiled two separate reports (TWO! Count ‘em! Like the White Album, it could’ve made one great report, but there’s no telling Which!!!!!! is there?) which state that insurance customers are facing unnecessary costs.
They found that 10 out of the 12 largest water companies are promoting pipe insurance from third parties, and this apparently costs customers more than £100m (in total) and in many cases, the money being spent is absolutely needless.
This is because water companies provide their own repair schemes which are free-of-charge. This service overlaps with what’s being offered by insurance companies. In addition to this, some water supply problems could be covered by your home insurance.
Another problem is that many water companies are promoting Homeserve policies through direct mail promotions, often on their own headed notepaper. You could argue that this is a little misleading, which is neither use nor ornament if you’re paying for things that are covered for free elsewhere.
Which?!?!? have also highlighted that insurers could well be charging hidden fees for insurance policy changes and renewals. It seems that AXA and Swiftcover are charging customers £30 to update your personal details with them.
Peter Vicary-Smith of Which!!!!! said: “These charges should reflect the real cost to the company and not a way of making easy money from consumers who are already struggling with high and rising insurance premiums.”
In other words, they’re all greedy swine. Keep an eye on ‘em.
RBS shareholders throw £2.4bn legal claim at Fred Goodwin
March 13th, 2012 • 8 Comments
Fred Goodwin is a nice, popular fellow isn’t he? The general public hate him. The Queen hates him. The media hates him. And now, it seems, so do the shareholders and investors of the Royal Bank of Scotland.
They hate him so much that they’ve started a £2.4 billion legal claim against him and other former senior executives. Or ‘cronies’ if you prefer.
They claim that they’ve been led on a merry dance and been utterly misled over the financial performance of the RBS shortly before they invested their money into a bank that was going to need a £45 billion bailout.
The RBOS Shareholders Action Group, which has the support of 80 institutional investors as well as 7,400 private shareholders, has sent claim letters to 17 former directors who believe they were given inaccurate financial information before investing £12 billion.
Lawyers Bird & Bird will send the letters to Goodwin today, as well as former finance director Guy Whittaker, former chairman Sir Tom McKillop and former head of investment banking Johnny Cameron, among others.
Investors are apoplectic with rage that they weren’t told about an alleged loan which the RBS received from the US Federal Reserve. It the loan had been made public, it would have allowed investors to decide to become part of a rights issue with the full knowledge of the situation.
If the RBS had announced the loan, this would have affected the share price which means that investors would’ve had to pay less for shares. The group of shareholders claim that Goodwin publicly denied that a rights issue would be required to raise funds.
A spokesman for RBS said the group has “substantial and credible legal and factual defences” to the claims and will “defend itself vigorously.”
Is the Royal Bank of Scotland eating itself from the inside, out?
One complaint every 12 seconds over PPI
February 29th, 2012 • 2 Comments
Britain’s banks received an impressive 2.5million complaints last year, with customers making a complaint every 12 seconds about Lloyds, RBS, Barclays, Santander and HSBC.
The bulk of the gripes focused on insurance mis-selling and terrible service with customers of the leading five establishments making 1.37million complaints between July and December 2011, a rise of 26 per cent on the previous six months.
The big beef was the misselling of payment protection insurance (PPI) and the financial ombudsman revealed that Lloyds was most griped about. Of the complaints made to banks where original queries were rejected, the ombudsman upheld more than seven in every ten complaints. This leaves the banks guilty of seemingly trying to pull a fast one over people with legitimate grievances.
The complaints list sees Lloyds at the top, followed by Barclays, MBNA, RBS/NatWest, Santander, HSBC and Capital One. It has been reported that 87 per cent of complaints against Lloyds TSB were upheld, compared with Barclays (84 per cent), MBNA (99 per cent), RBS (93 per cent), Santander (55 per cent), HSBC (80 per cent) and Capital One (11 per cent).
Peter Vicary-Smith, chief executive of ninja consumer group Which!!! said: ‘This data is further evidence that some banks are systematically failing to treat their customers fairly when things go wrong. It is especially unacceptable that tens of thousands of consumers have been forced to take their PPI compensation claim to the ombudsman, where the overwhelming majority of complaints are then upheld.’
OFT to investigate payday loan firms
February 24th, 2012 • 4 Comments
Payday loan companies are being hunted by the Office of Fair Trading (OFT) after the announced a new review of the sector because, ostensibly, people are rather concerned that these companies are exploiting poor people, putting them in more debt rather than being at all helpful.
If you don’t know about these companies, basically, they offer short-term loans with huge APRs (some as high as 16,000%) as a quick-fix to a short-term problem. Of course, this isn’t always the case and people inevitably find themselves in a much worse position after seeking one of these loans.
And now, the OFT are going to visit 50 major payday lenders and survey industry to try and determine whether companies were complying with the Consumer Credit Act and the current guidance on irresponsible lending. They will also look at evidence from consumers.
The review will look at how lenders are behaving in key areas such as: Are loans being given out without adequate checks to see if borrowers are able to repay, as well as the working out whether particular groups are being inappropriately targeted. They’ll also investigate roll-over loans and the charges that follow.
The OFT’s guidance says lenders shouldn’t be “inappropriately encouraging borrowers to increase, aggregate or rollover existing debt to unsustainable levels.”
The OFT’s director of consumer credit, David Fisher, says: ”This is unacceptable. We will work with the trade bodies to drive up standards, but will also not hesitate to take enforcement action including revoking firms’ licences to operate where necessary. The payday sector has grown considerably since the OFT’s high cost credit review in 2010. This, combined with the current tough economic conditions, makes it the right time for us to review the industry and improve protection for consumers.”
The Consumer Finance Association (CFA), which represents 70% of the payday lending industry, is welcoming the review. Chief executive John Lamidey said: “The CFA represents some of the largest payday lenders and believe that our Code of Conduct embodies best practice and sets the standard for the industry. Nonetheless, our Code is currently being enhanced to include many more consumer protections and this is due to be launched very soon.
“We welcome the OFT’s review and the CFA and its members are looking forward to working proactively with them to identify areas to enhance consumer protection.”
Santander fined £1.5m
February 20th, 2012 • 4 Comments
Santander, who have been doing a fine job of winding everyone up over the last year or so, have now been fined £1.5m by the City regulator for failing to tell customers that stock market-linked bonds they were buying weren’t actually covered by the Financial Services Compensation Scheme (FSCS) if the bank went belly-up.
That flies in the face of the fact that, until January 2010, Santander were telling investors that their Guaranteed Capital Plus and Guaranteed Growth plans “may be covered by the Financial Services Compensation Scheme”, and referred them to the FCSC website for further details.
Indeed.
The truth of the matter is that cover under the scheme was limited and, should the bank collapse, investors wouldn’t have been able to get their money back at all. The best they could hope for is compensation. Hardly guaranteed.
The Financial Services Authority (FSA) said customers queried the cover towards the end of 2008, prompted by the collapse of Icelandic bank Icesave. However, it took Santander ’til June 2009 to conclude cover was as claimed and, furthermore, it took a further six months to clarify the position in literature to investors. During that time, sales continued, with the bank taking around £2.7bn from customers.
Tracey McDermott, acting director of enforcement and financial crime at the FSA, said: “When firms provide customers with literature about products, the information has to be correct and unambiguous. After all, it is there to help people make informed decisions about whether to invest.”
Santander said it was “disappointed with the outcome” and had registered its opposition to the FSA’s findings. In a statement it said: “The FSA’s decision notice does point out that there is no evidence that the products were sold to customers for whom they were not suitable; and that no customers have suffered a financial loss. However, in order to conclude a lengthy investigation process, Santander has decided, in the circumstances, that we will not challenge further the decision, nor the fine.”
Local bank in an advert? Yeah right!
February 15th, 2012 • 3 Comments
Yesterday we told you about companies inventing farms to make us buy into a homely notion of their premium grub. Well, would you believe us if we told you that the banks are doing it as well? And the banking world has been so good to us lately too!
NatWest have been running a series of adverts which paint a picture of them providing a service in rural areas, presumably in an attempt to convince us all that they care for customers, no matter where they live. However, while they’re shilling this notion, they’re actually closing branches across the country, particularly those in rural areas. In fact, they’re gunning for more inner-city branches instead.
Thanks to this, complaints made to the ASA (Advertising Standards Authority) have been upheld, leaving the bank with the task of changing its marketing claims.
The watchdog said the bank’s advertising gave a clear impression that it would protect the last branch in any town and therefore the decision to close various rural branches was at odds with this.
Campaign for Community Banking director, Derek French, said: ‘This problem goes well beyond RBS-NatWest. Most of the banks have some sort of pledge that they are supporting local communities by keeping branches open, but the reality is very different.
‘The Government has concentrated on bankers’ bonuses, lending to small businesses and improving the ability to switch accounts, but it has failed to give the need to protect the branch network sufficient priority.’
Want a Tesco bank account? Tough
February 6th, 2012 • 8 Comments
Tesco, determined to take over the entire world and every aspect of your living life, have announced that they won’t be launching Tesco Bank’s current account until next year.
Of course, the supermarket already deals in insurance, credit cards and savings and is a subsidiary of RBS, but following a series of computer glitches which locked customers out of accessing their savings account, they’re putting their ”full-service bank for Tesco customers” on hold.
A spokesperson said: “We are currently in the product development phase. Our launch timings are not yet confirmed but will be driven by delivering the right product for Tesco customers, as well as the speed of implementation of new industry-wide systems to help customers switch current accounts more easily.”
This is in reference to The Independent Commission on Banking who, last year, recommended changes in the banking world to improve the system by which customers can switch bank accounts.
Tesco Bank is being seen as a serious contender on the high street… but would you want to bank with them?
25m at risk from bank hack
February 6th, 2012 • 11 Comments
Those pesky hackers are at it again, making a bee-line for Britain’s 25million internet banking users after cracking the latest generation of security devices. You know those calculator-style keypads you have, to help you set up payment and the like? Well, those naughty crims have cracked them.
Gary Clark, of data protection company Safenet, said the findings of a BBC investigation ‘raise serious questions’ over ordinary anti-virus protection. What is happening is that hackers have unleashed a bug that tricks users into taking part in training for an ‘upgraded security system’.
You log on, and they can harvest all that lovely information you give them from your device. From there, money is moved out of your account by a trick called ‘Man in the Browser’ (MitB).
Daniel Brett, of testing lab S21sec, told the BBC the attack is a ‘very specific, advanced threat, specifically focused against banking.’
The general advice seems to be along the lines of making sure your anti-virus/malware software is constantly up-to-date and, effectively, ignore any requests from your bank to complete any surveys.
Pay-freeze to last ’til 2020! Hurray!
January 23rd, 2012 • 14 Comments
Are you one of those ordinary families? Great news! Your wage won’t be hitting the heady-heights of pre-recession Britain ’til at least 2020, according to a depressing report from a leading thinktank. It goes without saying that the income of the wealthy will continue to rise over the same period.
The study has been produced by the independent Resolution Foundation, and look at the situation of 10 million adults who don’t rely heavily on support from the state. They’re called ‘the squeezed middle’ or something.
Basically, its those households without children that earn between £12,000 and £29,000.
Labour’s welfare spokesman, Liam Byrne, will debate the report’s implications with LibDem MP David Laws at the foundation’s London offices. The two haven’t met since the former Treasury secretary Byrne’s infamous note in 2010 to his successor, Laws, which read: “There’s no money left.”
The report’s author, Matthew Whittaker, said there was a “growing inequality of earnings”, adding “members of the squeezed middle did not share in the spoils of economic growth in the pre-recession years, with wages at the median and below stagnating. Gains instead flowed primarily to higher income households and, more particularly, to those at the very top of the distribution.”
“If this trend continues once growth returns it may not be just those on low and middle incomes finding themselves left behind in the next decade, but rather the majority of society.”
A spokesman for the Treasury said: “The government has taken decisive action to tackle the deficit, which has helped to keep interest rates low for businesses and families. We recognise that people are feeling squeezed and the government is doing what it can to help, reducing fuel duty so taxes on fuel are 6p lower than they would have been, freezing council tax and implementing an increase in the personal allowance in April, taking over 800,000 of the lowest paid out of tax.”
Churchill and Direct Line fined for being filthy file tamperers
January 18th, 2012 • 3 Comments
Insurance clowns Direct Line and Churchill (both owned by RBS incidentally) have been fined £2.17m for tampering with customer complaint files before submitting them to the Financial Services Authority (FSA). That’s lousy isn’t it?
The FSA said: “The firms failed to give clear instructions resulting in staff making inappropriate alterations with one individual even forging the signatures of colleagues.
“The firms’ management did not know what changes had been made or when [but] it is of critical importance that material provided to the FSA must reflect the picture as it is – not as they might like it to be.”
Paul Geddes, chief executive of RBS Insurance, said: “We very much regret the findings of the FSA investigation. Although no customers were disadvantaged, we are very disappointed that we did not meet the standards we expect of ourselves and which the FSA expects of us.”
The tampering happened when the insurers tried to deal with the FSA’s inquiries, which have been going for three years. The inquiries were to look at the way financial firms deal with customers’ complaints. Of course, RBS have previous with FSA fines, getting a £2.8m slap in the face in January 2011 for failing to adequately deal with routine complaints from customers.
And now, in the case of the insurance subsidiaries, the FSA asked for a sample of 50 complaints so a review could be undertaken. Before handing them over, the insurers management got external accountants to carry out their own review, finding that over a quarter of complaints were likely to fail the FSA’s assessment. That is when the companies started tampering with the files to make sure they were all up-to-scratch.
The FSA state that 27 of the 50 had been tampered with and seven contained signatures of employees, which had been forged by one member of staff. “In this case, the alterations did not impact on the FSA’s ability to do our job,” the FSA said.
Overdrafts? More confusing than Ted Rogers’ 321 questions
January 17th, 2012 • 15 Comments
Overdrafts are a nightmare. Once you get into the red, there’s almost no way of working out how much it’ll cost you. With that, consumer group Which?!?! have decided to put that line of thinking to the test and asked a group of volunteers – which included a maths PHD student – to calculate the charges of an unauthorised overdraft for four separate banks.
The research showed that only 7 out of 48 charges were correctly calculated.
Which!!!! chief executive, Peter Vicary-Smith, said: “Bank charges are too complex and impossible to compare.” It seems that overdrafts have a number of complex rules and additional fees, with Lloyds TSB coming in for particular criticism.
In simple terms, this could mean that you end up paying five times as much for going into the red than necessary. For example, going overdrawn for two days in a row would be charged £50 at the Nationwide building society, while the Halifax would charge just £10 for the same mistake. The highest current account unauthorised overdraft fee is £150 a month, thanks to First Direct and HSBC.
“Bank charges are still too high,” said Mr Vicary-Smith. “The regulator must be a strong, open and proactive watchdog that stands up to the banks, not a lapdog.
Barclays to hammer the poorest by tripling fines on standard accounts
December 8th, 2011 • 19 Comments
Barclays are going to triple the fines received for missed payments on basic accounts. You could be looking at fines of £24 per day. This of course, could ruin the poorest customers who have these basic accounts.
Over one million customers will see these charges coming into place from March next year, being hit with three £8 charges every 24 hours if payments bounce. Basically, you’ve got ’til then to get a bank account with someone else.
Barclays are trying to justify this by claiming that they’re losing ‘a lot of money’ on basic accounts. Accounts, its worth pointing out, that were designed for customers with dicky credit ratings or low-income.
Basic account don’t have overdrafts, which is one of the ways banks like to make a profit on their customers. Barclays clearly want to make a fast-buck on these account holders, so now, if a customer’s balance drops and a direct debit or standing order fails, Barclays can hit them with an £8 penalty.
A spokesman for Barclays said: “We want to ensure this product remains financially sustainable so that we can continue to help those at risk of financial exclusion gain access to banking’
‘We also want to ensure the product continues to meet the needs of those it is designed for. The changes we are making are based on solid research of our customer base and Citizens Advice Bureau clients’.
