More financial institutions raiding the funds in the large biscuit tin under the bed news as Barclays have put aside £500m to cover the cost of the investigations into the rigging of currency markets.
This £500m is much larger than the £290m of total fines that Barclays have received for fiddling Libor in 2012, and is released as the Financial Conduct Authority tries to sort out a settlement with six major banks over their roles in the £3.5tn a day foreign exchange markets.
We should have a result of the investigations some time in November and RBS will be publishing their results from all this tomorrow.
Barclays told everyone about this provision as they reported their figures for the third quarter of the year, where they also lost £170m as they covered the cost of the payment protection insurance (PPI) mis-selling farce.
Of course, this all means that Barclays profits have taken a huge hit, but frankly, it is their own fault so they can’t moan about it.
The result of all this means that there’s going to be some costs cut. There’s a plan for Barclays to axe 19,000 jobs and investors need to be appeased as they’ve been furious at the high level of bonuses being doled out to top brass.
This all comes after the Lloyds group made similar provisions and, of course, announced huge job losses. Across the banking and finance sector, the PPI scandal is the costliest thing that’s ever happened in banking industry.
The Royal Bank of Scotland Group have said that they’re working to close payday loan brokers thanks to receiving 650 complaints-a-day between July and August alone. They say that there are 1 million attempts to remove money from account per month, and that one customer of a payday broker who was getting charged £700 in fees from a £100 loan.
The difference between brokers and lenders is that they don’t lend the cash themselves, but rather, charge fees to people, even if they don’t end up being approved for a loan. Worse still, is that some brokers will pass on your bank details to another party who will then also try and take money from your account.
The Financial Ombudsman have issued a warning about these payday brokers, after around 11,500 people had contacted them to complain about credit-broking websites. That figure comes from April alone.
In two-thirds of complaints the Ombudsman looked at, they agreed that the customer had been unfairly treated. They added that most people using brokers thought they were applying for a loan directly and didn’t realise that they were actually giving money to a middleman where loans might not even be given out.
Senior ombudsman Juliana Francis said: “In too many of the cases we sort out, no loan is provided and people’s bank accounts have been charged a high fee, often multiple times. If money has been taken from your account unfairly or without warning, the good news is the ombudsman is here to help.”
Terry Lawson, head of fraud and chargeback operations for RBS and NatWest, said: “We’ve seen large numbers of customers incurring charges they don’t expect when using a payday loan broker since July this year. Customers’ account or debit card details are gathered and sent on to up to 200 other brokers and lenders who charge them fees for a loan application.”
“At its height we were seeing up to 640 calls a day on unexpected fees, but we’re pleased to say we’re seeing this decrease on account of the actions we’re taking to help stop these sharp practices.”
There’s been huge problems surrounding payday loans as a whole, so they’re largely best avoided altogether. However, if you are desperate, be sure to read all the small print and make sure that the loan you’re getting won’t see you in more trouble than when you started off.
If you are having problems with anything regarding this, then contact the Financial Ombudsman here, or call 0800 023 4 567 on a landline, or 0300 123 9 123 if you are calling from a mobile. They’ll phone you back, if you’re worried about the cost of the call.
The building society has been slapped with a £4.1 million fine, for being shits to customers facing financial difficulties.
The findings were found after a City regulator noticed that call handlers at Yorkshire had failed to implement the right payment solutions, making it even worse for customers having a struggle.
The building society has agreed to refund all mortgage arrears fees, plus associated interest, charged to customers since January 2009.
This redress scheme, announced in February, is currently under way and about 33,900 customers will be repaid a total of £8.4m.
Those customers with an existing mortgage will have their loan credited, while former customers will be sent a cheque. Cor! A cheque. How modern. A Yorkshire spokesman named anonymous, reckons that all affected customers will be refunded by the end of 2014.
The Financial Conduct Authority (FCA) had said that while Yorkshire viewed repossession as a last resort, it failed to recognise that delays in reaching long-term payment solutions meant that some customers incurred increased fees and interest.
These failures happened between October 2011 and July 2012 as is the company’s second fine for being devious arses.
The regulator noticed that in 64 out of 87 cases reviewed, showed that the consumer was treated shoddily.
Tracey McDermott, director of enforcement and financial crime at the FCA, said: “Customers in financial difficulty need to be treated fairly and sensitively. Firms must ensure that they are taking into account the particular circumstances affecting customers who find themselves in difficulty. Firms need to be dealing with these customers proactively, without delays, in order to ensure they are not losing out.
“By allowing cases to drift without agreement, Yorkshire’s actions meant that customers in vulnerable circumstances risked falling into further financial difficulty.”
Chris Pilling, chief executive of Yorkshire Building Society, apologised to customers using the ‘inflatable school’ joke as an apology. “We are very sorry for letting them down,” he said.
This is Yorkshire’s second fine in 2014. In June the FCA issued a £1.4m fine for exaggerating the returns that investors could expect from stock-market-linked bonds.
At a time when our ‘extra’ contribution to the EU is all over the news (did he know about it? What’s he going to do about it?), it can’t come as good news that, in terms of State Pension rankings, we are being shafted compared with our European neighbours.
New figures calculated by the International Longevity Centre show that the UK state pension of £113.10 a week is worth just a third of the average salary of someone in work. When comparing the state offering in other European countries with the average wage there, this puts us at a lowly 21st place out of 27 countries, meaning we will come down to earth with a larger bump than our continental friends.
Top of the state-provided shop is Greece, where workers get over 90% of the average wage in state pension provision. And they get to live in Greece, which seems a bit unfair. However, Greece has had some economic ‘issues’ shall we say, which can’t be helped by a massive pensions bill, and Greece is joined in the top ten pension spots by Spain, Cyprus, Italy and Portugal, all of whom have been found a bit short recently.
But just to prove it’s not the weather and/or shocking economic forecasts that make the difference on pensions, Austria, Finland and Belgium all also rated above average, while maintaining relatively strong public finances. And rubbish weather.
Helen Creighton, of the International Longevity Centre, said: “The Government aspires for the UK to be the best place in the world to grow old. Whilst the UK is by no means the worst place in Europe to grow old, we’ve got a lot to do to top the European league.”
However, before any tall horses are mounted, note that the data used was based on an OECD study in 2012 and does not take into account reforms that will set the state pension in Britain at a “flat-rate” £155 a week in 2016. Also, it is worth remembering that the average salaries in different countries will vary, as will the cost of living, meaning those pensioners living it up in the Southern Mediterranean might not actually feel so much better off.
Who are we kidding?
The tax-payer saved bank is said to have put aside £600 million to cover the PPI mis-selling shambles, which is on top of another £600m which Lloyds threw at it earlier this year.
Lloyds said at the time that, although the number of PPI claims is falling, it is still paying out around £200m a month to victims.
This is on top of the news that the bank was the worst performing UK bank in the European bank ‘stress test’ and the confirmation that there’d be 9,000 job losses over the next three years .
As PPI was designed to cover repayments on loans and credit cards, most loan and credit card companies sold the product at the same time as they sold the credit.
By May 2008, 20 million PPI policies existed in the UK with a further increase of 7 million policies a year being purchased thereafter. Surveys showed that 40% of policyholders claim to be unaware that they had a policy.
Fortunately none of them are UK banks. PHEW.
The 24 banks now have nine months to get their act together or face being shut down. The review was based on the banks’ financial health at the end of 2013.
Ten have already taken steps to bolster their balance sheets in the meantime. All the remaining 14 banks are in the eurozone. The health check was carried out on 123 EU banks by the EBA to determine whether they could handle another financial crisis.
The list of 14 includes four Italian banks, two Greek banks, two Belgian banks and two Slovenian banks.
The worst offender was Italian bank Monte dei Paschi, which showed a capital shortfall of €2.1bn. Bloody Nora. Admittedly banks are in a better place than they were in 2011, when the last stress test was taken. Although various analysts question the validity of these tests as they failed to spot the collapses in Ireland and Belgian bank Dexia.
But now that’s all changed, as the profits that banks are allowed to make through a future financial crisis are capped. Net income is slashed by 20% and there is greater transparency around how the data is used, giving more certainty to investors.
Also, the introduction of the Asset Quality Review looks at banks’ loans and their governments debts, which has lead to a more sturdy assessment.
The banks that still need to raise capital:
Austria: Oesterreichische Volksbanken
Belgium: AXA Bank Europe, Dexia
Cyprus: Hellenic Bank Public Company
Greece: Eurobank Ergasias, National Bank of Greece
Republic of Ireland: Permanent TSB
Italy: Banca Carige, Monte dei Paschi, Banca Popolare di Milano, Banca Popolare di Vicenza
Portugal: Banco Comercial Portugues
Slovenia: Nova Kreditna Banka Maribor, Nova Ljubljanska Banka
Amazon lost nearly $500 million in the last three months. Oh no! The US company reported a loss of $437m in the three months to September, which is 10 times the $41m they reported for the same period last year.
Well that’s just careless.
Shares in the company dropped 5%. However revenues rose 20% to $20.58bn, missing market expectations of $20.85bn.
Amazon do tend to report losses, but the fall in share price could indicate investors have had it with the company’s direction.
Operating expenses went to $14.6bn from $12.4bn in the same three months of 2013, mainly due to chief executive Jeff Bezos going off shopping around, buying the likes of Netflix, Hulu and various other bits.
It’s not all gloom and doom though as it’s ‘the holiday season’ and the company expects net sales of between $27.3bn and $30.3bn for the next three months, even if it is – boohoo – down on the $30.89bn analysts had expected.
The Icelandic airline WOW air have announced the £99 fare, which includes taxes, which is being offered on a selection of one-way journeys next year.
Passengers can travel from London Gatwick to Boston Logan International Airport from 27 March next year and Baltimore/Washington International Thurgood Marshall Airport from 4th June.
But there’s a but.
The flights aren’t direct, as there’s a stopover at Keflavík International Airport, in Iceland’s capital Reykjavik. Although going to Iceland for an hour or two would be amazing, even if it is just sitting about in their airport.
Additionally, there is a booking fee of £8.98 and it costs a further £39 to check in a bag, so customers are realistically looking at a minimum price of £146.98.
The Boston flight will operate five times a week and the Washington DC one four times.
The credit card giant are doing tests to see if a fingerprint function would work instead of a PIN number.
The company unveiled the protoype, which they developed in conjunction with Norwegian company Zwipe, who invented the fingerprint technology.
The contactless payment card has an integrated fingerprint sensor and a secure data store for the cardholder’s biometric data, which is held only on the card and not in an external database, the companies said.
The card also has an EMV chip, used in European payment cards instead of a magnetic stripe to increase payment security, and a MasterCard application to allow contactless payments.
The card is currently thicker than the usual ones, as it will have a battery in it to make it work, however Zwipe plan to eliminate the battery and make it the same as other cards, once they’ve started harnessing energy from contactless terminals.
As the fingerprint authentication is quite unique, there’s no limit on contactless payments, whereas other contactless cards have limits in them so that bad people can’t use them to buy diamonds.
Norwegian bank Sparebanken DIN has already tested the Zwipe card, and plans to offer biometric authentication and contactless communication for all its cards apparently.
Hands up if you want Mastercard to store your fingerprints?
Sounds good doesn’t it?
Pensions minister, Steve Webb said he wants to help those tied to poor-value annuities: ”I know many people who have locked into an annuity are feeling rather bitter that they came just the wrong side of the line.”
“It’s been gnawing away at me and I want to say to those affected: I know how you feel. If it were possible for people who would rather have a capital sum than a regular income, in principle I would like to be able to help, and this is something the next government should have a look at.”
The government have pledged that, as of next April, savers who are about to retire will be given full discretion as to how they use the funds from their pension. If you’re over 55, you will be allowed to treat your pension like a normal bank account. Don’t spend it all at once though eh?
However, there’s a problem with those who have already bought annuities because they’ll be excluded from this rule as it stands. Webb continued: “If we accept the annuity market was broken, we also must accept it was so 10 years ago.”
The thing here is that Webb’s views haven’t turned into proper policies yet, so if you’re a codger, don’t get out the celebratory vodka just yet.
There’s also talk of policing the pension sector to ensure that savers get a fair deal and that something needs to be done about the high charges that chip away at funds during retirement.
Ever get the feeling that the government might ‘fix’ all this by simply putting the retirement age up to 230, so no-one has to worry about it?
The state of the world’s financial markets suggests that a break is about to happen at any point! We’re doomed!
The Bank of International Settlements said that suspiciously low levels of volatility in the markets seen this year, suggest a lack of liquidity that could trip up investors who assume they can dispense of assets when a sell-off begins.
These remarks follow as the FTSE 100 index suffered another day of losses, dropping 2.8% and mirroring falls across Europe. Guy Debelle of BIS said global investors were buying assets on the misguided presumption of liquidity that does not exist and that in a possible sell-off, volatility and price movements “will be exacerbated by the reduced capacity and inventory of market makers”.
Despite the world issues flying around causing markets to wobble, the BIS observed that volatility in fixed income, equity and foreign exchange markets has fallen to historically low levels.
Debelle, who is also an executive at Australia’s Reserve Bank, said: “While there is more forward guidance from central banks in place than in the past, investors do not have to believe it. I find it somewhat surprising that the market (in aggregate at least) is willing to accept the central banks at their word and not think so much for themselves”.
Referencing the US bond crash of 1994, Debelle warned that exits in the present bonds market could be even more violent in future with “a fair chance that volatility will feed on itself”.
It’s all somewhat worrying isn’t it?
In his speech, Debelle also referred to tightened regulation in the sector introduced in the wake of the financial crisis, adding: “Regulatory changes have, as intended, increased the cost of market-making, and hence shifted some liquidity risk to end investors. There have also been some strategic decisions taken by institutions and internal constraints have been imposed which have reduced capacity”.
Some of you may think this is blindingly obvious, but households are wasting around £80 per year because they don’t switch their televisions and consoles off at night. We are, to the hysterical, A Nation On Standby!
If everyone stopped leaving things on standby, then the country could make savings of £1.7 billion a year according to the Energy Saving Trust.
The survey, ahead of Big Energy Saving Week, found that three-quarters of people polled were worried about their energy bills, so one easy way to reduce them is to make sure that you’re actually turning off gadgets and such, when you’re not using them.
Philip Sellwood, chief executive of the Energy Saving Trust, said: “Whatever your age, gender or the size of your household: our research has found millions of us are unintentionally wasting electricity when we leave our gadgets on standby. It’s an easy mistake to make yet it costs us a fortune.”
“Televisions and games consoles are now among the primary sources of our everyday entertainment, yet when left on permanent standby they are costing £45-£80 a year.”
“I’m not suggesting we get rid. I’m urging people to take back control of their appliances next week and switch off when we aren’t using them.”
It isn’t just leaving stuff on all the time either. Older people are adding to their bills by having rubbish, old fridges. Decrepit appliances are more likely to have faults that make them inefficient. A faulty thermostat on a freezer could be adding £45 to your bills, annually. Getting rid of old-fashioned light bulbs and replacing them with energy efficient ones and halogen lights with LEDs could save you around £45 a year on bills.
And if that doesn’t work, then you should check your provider to make sure you’re getting the best deal from them.
Energy and Climate Change Secretary Ed Davey said: “Consumers can make a real difference to their electricity bills by improving energy efficiency at home and Citizens Advice and Energy Saving Trust are there to help. Shopping around for the best energy deal can also make a huge difference.”
“We’ve slashed the vast array of confusing tariffs, so it’s now easier to compare energy prices and switching times will be halved by the end of this year. Households could be saving a further £200 per year just by switching suppliers.”
So there you have it. Stop being daft and save yourself some money. It doesn’t matter if you care for the Earth or not – with the money you save, you could buy a substantial amount of booze, so you know it is worth doing.
Industry body the British Bankers Association (BBA) has teamed up with the police to launch a campaign which they hope will raise the public’s awareness on all things fraud, looking at the most common scams that will happen online or down the phone.
Based on the results of a YouGov poll, the BBA said that eight million people are vulnerable to voice phishing scams, four million may transfer money to fraudsters, three million could potentially carry out “test transactions” and 1.7 million would hand their bank cards to couriers on their doorstep if they had a convincing form of ID.
Best not to answer the phone or door to anyone, ever.
Anthony Browne, chief executive of the BBA, said: “Being defrauded is a devastating experience for anyone which is why we are launching this campaign. The more people know about fraud, the less likely they are to become victims.”
“Our Know Fraud, No Fraud campaign will help you spot some of the tactics used by scammers. Your bank would never send someone to your home to collect your cash or ask you to transfer funds to a new account.”
So, for your records to be printed out and stapled to grandma’s forehead as a reminder to her and everyone else, here’s the BBA’s List of Things That Your Bank Will Never Ask For.
- Ask for your full PIN number or any online banking password over the phone or via email
- Send someone to your home to collect cash, bank cards or anything else
- Ask you to email or text personal or banking information
- Send an email with a link to a page that asks you to enter your online banking log-in details
- Ask you to authorise the transfer of funds to a new account or hand over cash
- Call to advise you to buy diamonds or land or other commodities
- Ask you to carry out a test transaction online
An unusually warm September was blamed on all this, even though they would’ve blamed it on wet weather if that was around. Basically, people don’t know why we’re not shopping as much as we used to. Maybe its because we’re skint?
The British Retail Consortium said that the year-on-year drop in consumer spending was the most pronounced since December 2008, but said that there is some comfort to be taken from the fact that spending on big-ticket items such as furniture continued to be strong.
Helen Dickinson, the director general of the British Retail Consortium, said: “In September, we saw the lowest retail sales figures since December 2008, excluding Easter distortions. This can be attributed to a number of factors including the continuing decline in food sales.”
“Furthermore, there was exceptionally low demand for items such as boots and coats, resulting in the lowest fashion sales performance since April 2012. However, demand for big-ticket items continues to be strong, with furniture outperforming all other categories.”
David McCorquodale, head of retail at KPMG, said: “After a bumper summer, this is a disappointing outcome for retailers and has undoubtedly reversed some of the sales gains made in August. However, if temperatures drop to a more seasonal level this cooler weather will quickly turn around retailers’ fortunes and help them to sell their autumn-winter ranges.”
“The grocers had another challenging month, with further price cuts and promotions announced by most. With a rebasing of margins in the grocery sector throughout the year, this final quarter will see sales go to those who are most focused on their customers.”
Remember the halcyon days of 192? Not the cheesy stalking website 192.com, but the single directory enquiries service run by BT until the market was deregulated in 2003.
Of course, the reason the number was deregulated was to prevent BT’s monopoly of the service, with the introduction of competition clearly enabling a reduction in the call costs. In 2003, a call to 192 cost 40p. Now calls to directory enquiries can cost as much as £5 per minute. Good job deregulators.
The market is, however, still monopolised, with 118 118 (run by The Number UK) and 118 500 (run by BT) taking over 80% of the market share, despite there being hundreds of alternative providers. The Number UK has just released figures showing a healthy £70.9m pre-tax profit, despite falling customer numbers/turnover, with an estimated cost of £2.61 for a 45-second call to the company. That’s still an awful lot of calls to what is classed as a premium-rate number. Surely there is a better way?
If you are at home/at work in easy reach of a computer, the cheapest way would normally be to use an internet search instead of calling someone to do exactly that for you. However, assuming you can’t, for whatever reason, access or use a computer, one better way would be to get the number for free, and if you are on a landline (prices quoted here are for BT landlines) there are some free and lower cost alternatives. The best offering comes from, surprisingly, the company behind 118 118 itself. If you call 0800 118 3733 (that’s 118 FREE for those of you with alphabetic number pads), you can get an automated directory enquiry service for free. This isn’t for people in a hurry though, as you have to listen to adverts, and jump through recorded message hoops before you get your number, but it is a viable alternative.
The other 118 numbers can, and seemingly do, change their rate frequently, so, for example, a 2010 best buy table is not going to be accurate any more. And with so many number fighting over just 20% of a shrinking market, many numbers simply disappear from existence. However, we have found the following cheaper alternatives that are currently still effective.
The cheapest we could find is 118 390 run by Colt, who charge a flat rate of 32.5p per call, but you can only make one enquiry. And The Number UK actually come out well again, with their less-well known 118 811 service offering a single search for just 50p per call. Or if you’re feeling altruistic, try Ethcom who charge 40p plus VAT per call and donate 9p to a limited choice of (mainly Scottish) charities. The full list of valid 118 numbers can be found here. But if you want the security of a ‘trusted brand’ that should give you the right number, BT have a ‘corporate’ directory enquiries number of 118 707 that is charged at a flat rate of £1 per call and is described as ‘no frills’.
But what if you aren’t on a (BT) landline?
If you have a smart phone with an inclusive data allowance, the smart thing to do would be to look the number up on the internet. For free. You can even search BT directories online at 118500.com. But what if you don’t have any data allowance?
First of all, it might be cheaper to buy additional data than call a 118 number though your phone. While data add-on costs vary between plans and providers, as an example, EE offer 50MB of EU roaming data for £3, so it’s worth finding out how much a search using up to 1 or 2MB might cost you.
Calls to any premium rate numbers are even further inflated on a mobile, and 118 numbers are no exception. Fortunately, the main providers actually have a search facility on their respective websites so you can check how much premium numbers will cost before you call them.
For example, Vodafone’s internet calculator tells you that it is the cheapest network if you want to call market leader 118 118- a single call is a snip at £3.25 per minute, compared with BT’s 118 500 or at a full fiver a minute.
EE’s call cost calculator is a bit more complicated, as result depend on whether you are PAYG or Pay Monthly, and they sneakily exclude VAT from the monthly costs to make it look less expensive. Calls to 118 118 cost £4.50 per minute for Pay Monthlies ( but only £2.25 for PAYG) and 118 500 costs £4.08 per minute (£2.00). O2 is by far the simplest- its own dedicated directory enquiries number of 118 402 is charged at £1 per minute. All other 118 calls are £5 per minute. No confusion there.
As mentioned, the call costs can, and do change all the time, so if you think you might be caught out and need a number in a hurry, it could be worth checking beforehand. While many people haven’t used a directory enquiry service for years, and find it quite incredulous that people still do so, The Number UK’s figures show there are still an awful lot of calls being made. So why not save while doing so?