Posts Tagged ‘money’
The European Banking Authority (EBA) has shared their new, tougher guidelines, making payment service providers get serious about customer identification before payments are processed.
There’s good reason for this too – in the last four years, the yearly cost of card fraud in the UK has jumped up from £365 million to somewhere in advance of £450 million! Two thirds of that came from the dastardly practice of ‘skimming’, where small amounts of money are continually removed from an account in the hope that the victim won’t even notice.
Of course, there’s been an increase in digital snidery too, with ne’er-do-wells using malware and the like. There’s also the tried-and-tested tactic of just nicking your card too.
Anyway, all this means is that you’ll carry on as normal while fraudsters will have to learn a new set of tricks to try and get at all your precious money.
It looks like a whole host of us have not been reclaiming the money that is rightfully ours after we’ve closed accounts with energy providers. You’re smart enough to know that the energy companies are quite happy for you to leave it in their care and not do a damned thing about it.
Somewhere in advance of £200m has been left in 3.5 million frozen accounts, discovered by Ofgem, and Energy UK want everyone to get their money back.
British Gas, EDF Energy, E.ON, npower, ScottishPower and SSE have all been asked to refund old customers, but obviously, they need to be ordered to do it.
So how can you get your cash back? Well, Energy UK has launched the My Energy Credit campaign and they reckon they’ve already got £50m back into the hands of the people who were owed it. Now they want everyone else to get on it. They’ve set up a website, which you can see here, as well as a helpline and freepost address. Concerning the latter, you can call 0370 737 7770 or write to:
My Energy Credit
47 Aylesbury Road
Thame, OX9 3PG
Energy UK chief executive Lawrence Slade said: “This campaign aims to inform customers throughout the UK about money that might be owed to them by their previous energy supplier. Energy companies have long had systems in place to give back energy credit to customers. This campaign spreads awareness and makes it easier for consumers to check whether they are owed money or not.”
So don’t miss out. If you think you’re owed money by an energy company, chase them up and you’ll have a nice little bonus to spend on dirty books, booze or whatever it is that tickles your pickle.
After a little digging, we found that M&S have broken the law because they didn’t write to customers to inform them that they could pay their balance off early if they wanted to and that customers were also permitted to pay off any amount they wanted, at any time.
Legally, they are required to do that, so those who haven’t received such correspondence have been finding seemingly random amounts of money coming to them, which is a nice early Christmas present, you have to say.
There have been some letters of apology sent out, but not to all customers, and some have received hundreds of pounds. In one instance, a customer was given £600, which is not to be sniffed at. Another customer received a BACS transfer for £1,467, which is thought to be the interest paid on the loan from when the loan was first taken out to the present day.
If you have a loan with M&S and think you might be in with a shout of a loan, then you can either trust them to sort it out for you (good luck with that) or, you can give them a ring to see what the score is.
Call the M&S Personal Loan number, which is 0800 363 400 and hopefully, you’ll be having a festive period that is much more suave than you anticipated. Let us know how you get on.
Britain’s biggest payday loan lenders have started to randomly pick out people and offering them loands that have noticeably better terms than other payday loans companies. By the time the Financial Conduct Authority’s new rules take effect in the New Year, Wonga will be able to brag: ‘Oh that? We were doing all that anyway. We don’t need telling because we’re nice. Honestly we are.’
Of course, there’s a lot of people who couldn’t care whether Wonga are nice or not and look at them like any other financial institution and you’re a mug if you get involved with them and deserve everything that comes with it. Hardly an empathetic approach, but then, Britain isn’t an empathetic place really.
Anyway, the FCA rules say that payday loans will have to cap their interest at 0.8% per day, which means that, if you’re borrowing £100, the customer will only accrue a maximum level of interest of 80p per day. Fixed default fees will be restricted to £15 and there’ll be a cost cap of 100% of the initial loan.
Of course, Wonga deserve scrutiny as they’ve been sending customers letters from fake legal firms and have had a number of commercials banned and had to write off £220m in loans after the FCA spanked them on the way they do things.
It seems to be the way payday loans are going. Last week, we told you about Mr Lender – a dismal name for a company – who are aiming to become the trustworthy, cheerful face of finance.
The FCA will be reviewing the new measures in 2017 to see if they’re working and protecting the customers. Full marks if you muttered “we’ll see” under your breath throughout this whole article.
Average household spending increased to £517.30 a week in 2013, an increase of £16.30 from 2012.
This figure has been bolstered by people buying tellies and cars and doing things like holidays and getting fancy dan theatre tickets. Wooh! Up YOURS austerity.
However the ONS said there was a time-lag between changes in pay and consumption, meaning that after inflation, families are still spending less than the pre-shit/fan interface of £539.80 back in 2006.
Strong consumer spending – you only just have to look at people going crackers on Black Friday for a TV made by an in-car radio manufacturer to acknowledge that – drove UK growth in the third quarter, as business investment contracted against an increasingly uncertain global backdrop.
While spending has slumped overall since the giddy days of 2006, it’s starting to rebound slightly, with disposable household income, after inflation, growing a teeny bit from £612 to £614 a week last year, down from the 2008 peak of £676.
The ONS report said: “The economy has witnessed signs of economic recovery, despite consumers remaining price conscious. There is evidence that consumer confidence is increasing slowly, increases in household expenditure are largely focused on items such as housing. However, the results have also seen an increase in expenditure on big ticket items, such as new cars in 2013, indicating that pent-up demand is being realised.”
“Expenditure on items such as TV, video, computers and recreational activities has held up over time, showing the high priority placed on these goods and services by many households, regardless of economic circumstances,” the report said. Families spent an average of £5.10 a week on such items last year.
However, it’s not all good news, as spending on drink, drugs and tobacco dropped to record lows, down £1.30 in a year to £12 a week, compared with £18.20 a week a decade previously. People dunno how to party these days, that’s their problem.
And get your Class War t-shirts on, as the divide between rich and poor is ever clearer, with the lowest-earning 10% of households spending an average of £189.80 a week. This compared with an average of £1,119.50 a week for the 10% of highest-earning households.
Poundland – the land where everything’s a pound, unlike some – have posted a good set of half year results!
The discount retailer where every day is literally Black Friday saw their pre-tax profit climb 11.7% from £8.4m after non-underlying charges to £9.3m on sales up 15% from £459.2m to £528.2m. Like-for-like sales moved 4.7% higher compared with 0.8% for the same period last year.
They also expanded the empire from 490 in 2013, to 556 shops now. 28 new stores were opened, retail park outlets gained 26 more branches taking them to 72 and there’s another 60 new shops in general planned in UK and Ireland in the current financial year. Blimey.
Jim McCarthy, chief executive, reckoned Poundland would continue to benefit from continuing consumer behaviour and doing better business in improving economic conditions than it was in recession, saying: “As the structural changes in UK retail continue to redraw the landscape, we are building our reputation for offering amazing value every day to our customers and substantially broadening our appeal.”
“We know that Poundland is a good business in a recession and we believe it is an even better business in improving economic conditions. It is now seen as smart to save money and Poundland will continue to benefit from changing consumer shopping behaviour.”
Stick that in your pipe, Tesco.
Tesco Bank is set to pay out £43million in compo after a loan statement cock-up saw 175,000 customers out of pocket. The bank failed to send out personal loan and credit card statements and those to bank with Tesco were illegally charged interest on loans
The good news is that anyone who accrued interest on loans during the time of the error will now be refunded, with the average payout of £228.
Some customers have already got their cheques. On Twitter, Stuart Gibson wrote: “Apparently Tesco bank forgot to send me an annual statement for five months on a loan I had. So they’ve sent me £450 instead. That’s nice.”
A Tesco spokesman said: “We have put in place a redress programme to return interest and charges to customers who did not receive documentation in line with the requirements of the Consumer Credit Act. This redress programme has commenced and we are writing to all of those customers affected. Customers do not need to take any action however if they do have questions they can contact us as normal.”
“It’s not an incident of mis-selling. This is an industry-wide issue.”
Other banks and building societies are in the process of sorting this all out too, with the Office of Fair Trading confirming that there’ll be just shy of 500,000 people set to get a cheque as a result of the Consumer Credit Act balls-ups.
We’ll keep an eye on things and let you know, so you can chase your bank up if they try pulling a fast one.
Tim Weller was the last senior executive at the payday lender who was appointed by Errol Damelin, the company’s controversial founder who jacked it all in back in June.
Andy Haste has now taken over the day-to-day management of Wonga, and he says: “At a critical time for Wonga, when we will complete our forbearance programme, prepare to apply for FCA authorisation and introduce a cap-compliant product, I’m taking an even more active role in leading the business.”
“Tim Weller therefore stepped down as CEO in October. This was a mutual decision, following a comprehensive handover, and will ensure clear leadership in the weeks and months ahead. I want to thank Tim for his three years in the business as chief financial officer.”
“Our search for a permanent group CEO is well underway and Tara Kneafsey, our new UK managing director, will join us in December.”
Running Wonga is a tough gig at the moment as, only last month, they were forced to write off £220m of customer debts after they admitted they’d be wrong in lending money to some 330,000 people. While they were at it, they also axed interest charges for another 45,000 customers.
We wrote about RBS getting fined by the Financial Conduct Authority, speculating that they’d be hit with a £50 million fine.
Well, we weren’t far off as regulators have slapped the bank with a fine of £56m after their software malfunction saw millions of customers unable to access their own money in their bank accounts in June 2012.
The fine is actually a twofer, with a £42m penalty coming from our pals at the Financial Conduct Authority and another fine of £14m being served by the folks at the Prudential Regulation Authority.
RBS chairman Sir Philip Hampton said the problems “revealed unacceptable weaknesses in our systems” and that it ”caused significant stress for many of our customers,” adding: “As I did back then, I again want to apologise to all customers in the UK and Ireland that we let down two and a half years ago.”
“Modern banking depends on effective, reliable and resilient IT systems,” said Tracey McDermott, director of enforcement and financial crime at the FCA.
“The banks’ failures meant millions of customers were unable to carry out the banking transactions which keep businesses and people’s everyday lives moving. The problems arose due to failures at many levels within the RBS Group to identify and manage the risks which can flow from disruptive IT incidents and the result was that RBS customers were left exposed to these risks.”
The FCA said the fine was down to the problem which saw customers unable to use online banking facilities to get at their accounts. obtain accurate balances from ATMs, make mortgage payments, access money abroad and, on top of all that, RBS Group’s banks applied incorrect credit and debit interest to accounts. As well as the aforementioned, some businesses weren’t able to pay their staff as a result of this cock-up.
The youth of today won’t remember what it was like back when you had to use your own bank’s cashpoint* to get your money out. If you were a Lloyds’ customer, heaven help you if you wanted to use an HSBC cash machine. Or at least, you’d be charged somewhere between £1.50 and £3 for the privilege.
Before long, however, some banks ganged together so you could all use each other’s machines, with rival bank- gangs facing off until it became the free-for-all it is today.
Or at least it’s now mostly free. Now just three in 10 cash machines levy charges, which is the lowest proportion in a decade and is down to people power and increased competition between providers. Back when we were all happy to pay charges, there were loads of fee-paying machines, now we’ll just walk a bit further to find a free one.
What’s interesting, though, is that more than half of the cash machines in Britain are currently owned by independent operators- 34,733 of the total 68,630 machines are now run by businesses other than banks or building societies. You might think that independent machines would be more likely to charge, being as they don’t have a myriad other ways to extract money from you same as your bank. However, the spirit of free competition has come to the rescue, with operators banking on low margin/high volume beating those £3 fees.
How cash machines work for independent operators is that each time someone makes a withdrawal, the operator is paid 25p by the customer’s bank. This fixed fee covers the operator’s costs, such as employing someone to put money in the machine and paying a “rent” fee to the landowner. If you get enough 25ps, you will be laughing all the way to the bank, which is why operators are positioning new machines in the middle of busy pavements or pedestrian areas.
Graham Mott of Link, the industry body for cash machines, said: “Independent providers have realised that if a rival is charging a few pounds for withdrawals down the road, they can install a free machine and lure customers away.”
“Free cash machines are a real asset for shops, too, as customers are more likely to visit and spend in store, so many retailers are requesting that option.”
There are now more than 48,000 free cash machines in the UK, up from 32,729 in 2004, according to Link.
James Daley of consumer website FairerFinance.com said: “People hate paying to get hands on their own money, so this is good news for the consumer. Yes, it’s cheaper for banks if you used their own machines and they are always looking for ways to steal a little more from customers. But banks are making such large margins that there would be no excuse to pass on the extra costs of people going to independently-run machines.”
* actually, you can’t call them a cashpoint unless you are specifically talking about a Lloyds machine. They own the word. Fortunately cash machine works just as well.
The Financial Conduct Authority – the finance watchdog for the UK – has been looking at payday loans and rejigging the rules so that borrowers are never forced to repay more than twice the amount of the loan they initially took out.
The FCA said interest and fees will be capped at 0.8% a day and that the total cost of a loan will be limited to 100% of the original sum. The default fees are to be capped at £15 also.
We’ll see these changes coming into play on 2nd January 2015, which means that, if you borrow £100 from a payday lender for 30 days, you’ll not pay more than £24 in fees and charges (provided you pay off your loan on time).
Some quarters think that the FCA haven’t gone in hard enough, but the watchdog has said that they don’t want to be running anyone out of business.
Martin Wheatley, the FCA chief executive, said: “I am confident that the new rules strike the right balance for firms and consumers. If the price cap was any lower, then we risk not having a viable market, any higher and there would not be adequate protection for borrowers. For people who struggle to repay, we believe the new rules will put an end to spiralling payday debts. For most of the borrowers who do pay back their loans on time, the cap on fees and charges represents substantial protections.”
The Competition and Markets Authority proposed the investigation in summer, and have now vowed that they’re going to look at the difficulties customers face when they want to switch banks. One of the things they’re concerned about is the lack of smaller competitors to the big banks on the High Street.
Barclays aren’t happy, saying that this probe is “not appropriate at this time”, adding: ”Various developments, innovations and stimuli are changing the competitive landscape in in relation to both [personal current accounts] and [small and medium enterprises] banking, and these must be given time to mature.”
The BBA – they represents the banking sector – aren’t phased at all, saying that the industry would co-operate because: ”Banks are pro-competition – they compete for business every day.”
The CMA will be looking at these things concerning bank services in the UK.
- Very few customers switching banks or shopping around for the best rate
- A lack of transparency and difficulties in comparing services from different banks
- The hurdles faced by smaller banks trying to enter the market
- The continued dominance of the “big four” banks
We should have some answers from the inquiry in around 18 months time and the CMA added that it would review the 2002 report by its predecessor, the Competition Commission, to see if their findings are relevant to the state the banks are in, and to their own investigations.
The employment appeal tribunal have ruled that employers must include overtime when they’re calculating their staffs’ holiday pay. This could see payouts for up to a sixth of the UK’s 30 million workers, which is absolutely mental.
However, some companies are worried that the size of the bill could put them out of business, but there’ll be a good number of people who think that they should’ve thought of that before now.
The Employment Appeal Tribunal ruled on two cases relating to the UK’s understanding of the Working Time Directive, including one involving electricians, scaffolders, and semi-skilled operatives who worked on a project at a power station in Nottinghamshire. Union, Unite, said that these employees consistently worked overtime, but that wasn’t included in their holiday pay, meaning that, the money they got was “considerably less” than their normal pay.
Howard Beckett from Unite, said: “Up until now some workers who are required to do overtime have been penalised for taking the time off they are entitled to. This ruling not only secures justice for our members who were short changed, but means employers have got to get their house in order.”
“Employers will now have to include overtime in calculating holiday pay, and those that don’t should be under no illusion that Unite will fight to ensure that our members receive their full entitlement.”
Unsurprisingly, the businesses themselves aren’t too happy. Mike Cherry, policy chairman of the Federation of Small Businesses, said: “The government must bring in emergency legislation to prevent the backdated claims. [If they don’t act] hundreds of businesses will shut down and that will lead to thousands of employees being laid off.”
“Business has done everything it could to comply with the law at the time and now to have it changed is totally wrong. Our members are very clear about this – it could have severe implications.”
The Government actually support the employers and don’t want to see these payments being made. A spokesperson said: “We understand the deep concern felt by many employers and have intervened in the employment appeal tribunal cases to make our views clear.”
So what’s the way out of this tricky situation? Is backdated holiday pay any good to you if your job is going to vanish along with it? Depends on how much money is being offered per person. Either way, there’s going to be some arguments about this.
Sometimes, it is almost exactly like mortgage lenders are making everything so needlessly confusing that it puts consumers off from being able to work out what works best for them. Almost exactly like that.
Well, research has shown that homeowners are likely to be paying more than they need to because it is too difficult to compare mortgages.
The folks at Which!!! did a survey and they found that a paltry 3% of people were able to rank five two-year fixed mortgage deals in price order.
It looks like borrowers aren’t being given clear information about mortgages and that lenders are charging a huge array of fees which are baffling everyone. These sneaky fees are one of the biggest problems in getting a mortgage that works for you.
Borrowers are faced with over 40 different fees and charges from lenders, from arrears fees to set-up costs, right through to final repayment charges and more. Administration costs will hit a borrowers account multiple times and arrangement fees are getting increasingly more expensive, doubling in the past five years, now averaging at £1,588.
Of course, lenders aren’t helping as they’re using different terminology and names for all these fees, which adds to the confusion for those trying to get a mortgage.
So while you’re looking at one lenders’ APR, it might appear cheaper but all the hidden costs actually make it far more expensive than another.
George Osborne clearly needs to utilise the Autumn Statement to make mortgage price comparison easier for customers and enforce rules which make the full cost of mortgages much, much clearer.