ICAEW Enterprise Survey

The Institute of Chartered Accountants in England and Wales (ICAEW) has just released its enterprise survey, which examines how UK business is taking advantage of globalisation, reports on future growth plans and discusses the barriers to that growth.

The research revealed that:

• banks are seen as obstructive


• regulatory costs to business continue to intensify - with the burden increasingly falling on small and medium sized businesses


• over the next five years we will see a major shift up the value chain of business activity being purchased from abroad


• the lack of high level skills is impacting on business growth

To read the report visit ICAEW Enterprise.

Banks Throw Customer Details Onto The Street

Despite the fact that banks are forever lecturing their customers about personal security, and the risk of id theft, it seems that when it comes to practicing what they preach they are found to be wanting.

It has been revealed that high street banks are dumping details of their customers' accounts on the street.

Richard Thomas, the Information Commissioner, says that he has received "highly disturbing" evidence that personal information, including bank statements and loan applications, are being left in bin bags on streets throughout the UK.

Needless to say, this exposes the banks' customers to a severe risk of id theft and fraud. Thomas is considering taking enforcement action against those financial institutions that are failing to apply adequate security over customer details. They could face unlimited fines.

His office is investigating; the Post Office, HSBC, NatWest and the Royal Bank of Scotland.

Thomas is quoted in an interview saying:

"There have been cases now which have quite strong prima facie evidence which we are urgently investigating, of banks' rubbish bags found on the public highway outside banks.

And I have seen some of these where, open up the rubbish bag and there you find bank statements".

Cases being examined by his office include an application for a current account (which had the individual's name, address, date of birth, telephone number, previous address, current account number, mother's maiden names and place of birth) which was found in the rubbish.

Detective Chief Inspector Derek Robertson has warned that criminal gangs have infiltrated about 10% of Glasgow's financial call centres, stealing customers' identities and robbing them of thousands of pounds.

Another nail in the coffin of the already tarnished reputation of Britain's financial services industry.

To read the full interview with Richard Thomas, visit The Thomas Interview.

Lousy Call Centre Security Puts You At Risk

Poor security at Indian call centers resulted in the theft and illegal trading of personal financial information, according to charges raised in a report by the London-based Channel 4, which broadcast the results of a 12-month investigation on October 5th.

Channel 4's Dispatches program reported that it has discovered data protection breaches at several Indian call centers. Dispatches claims that confidential information on UK mobile phone customers, as well as their credit or debit card details, have been gathered and sold to third parties.

The Information Commissioner's Office, a UK government data privacy watchdog, says it is investigating the claims made by Channel 4.

"It appears that some mobile phone companies' call centers in India are being targeted by criminals intent on unlawfully obtaining UK citizens' financial records and this will be the focus of our investigation," the Information Commissioner’s Office says in a statement.

Dispatches reporters discovered a phenomenon known as "data farming" in which unauthorized harvesting of personal information is sold on at a profit. The program alleged that some Indian call centre workers are involved in the scam, gathering data from customers before selling it on to brokers.

"What has been happening is that UK customers phone a mobile phone company's call centre, which is located in India, and they are asked for their bank or credit card details as part of a credit check," a Channel 4 spokeswoman said. "For example, they will be asked for their card number, expiry date and verification code, the three-digit code that is displayed on the back of their card. This information is then stored on the call centre's computer system and it is then illegally accessed."

In the program, an undercover reporter is shown obtaining personal financial data from an Indian middleman. The data includes full banking and financial profiles. The data was not taken from bank call centers, but from call centers working for UK mobile phone operators.

Indian IT trade association Nasscom criticised Channel 4 after the London-based TV station refused to show the organization any of the footage before the broadcast. Nasscom called on Channel 4 to co-operate in rooting out and prosecuting any "corrupt" call centre workers.

Source Citadel Advantage

FSA Fines Credit Broker

The Financial Services Authority (FSA) has fined LOANS.CO.UK, a licensed credit broker, £450K for mis-selling Payment Protection Insurance (PPI).

Approximately 14,400 customers were sold policies that they may not have needed.

Last week the Office of Fair Trading (OFT) referred the PPI industry to the Competition Commission. The conclusion of a five month investigation by the OFT was that the sale of PPI policies offered a "poor deal and often less protection than [consumers] think".

PPI is worth around £5BN a year, so it should come as little surprise to learn that some companies sell these rather dubious products in an "aggressive" manner.

In theory the insurance is meant to provide people with protection, if they fall ill or lose their jobs. The FSA was critical of the way that Loans.co.uk had been selling, usually over the telephone. It said that customers were not given enough information at the point of sale to make an informed choice.

One would have thought that the financial services industry had learned its lesson from the endowment mortgage scandal of the 80's and 90's. Unfortunately not, despite its reputation being in tatters, it seems that the financial services industry is determined to make money no matter what the cost to the poor saps that it dupes and its own reputation.

Fixed rate Deals Being Pulled

First time home buyers may soon find the already semi impossible task of affording their first home even more problematic.

Lenders are expected to withdraw their best fixed rate mortgage deals from the market. Halifax has withdrawn its lowest fixed rate, which was 4.39% for two years. This follows hot on the heels of Alliance & Leicester's recent increase in interest rates, on its two and three year fixed rate deals earlier in the week.

You can expect more bad news soon.

Households Lamentably Unprepared

Research from Scottish Widows reveals that British households are lamentably unprepared for the loss of a breadwinner's income. The research identified a "protection gap" that meant serious financial hardship for families if a main earner was to fall ill or die.

Over 10 million households are now dependent on more than one salary, to maintain an acceptable standard of living.

Over 50% of take-home pay goes on essentials such as mortgage repayments, managing debt, food, gas and electricity bills.

The study warns that many families would face serious financial hardship in the event of the worst happening.

Nick Kirwan, protection-market director at Scottish Widows, said:

"The majority of the population is walking a financial high wire without a safety net.

Nobody knows what is around the corner, but we have to accept that all too often illness does strike and accidents do happen.

If people don't start to take responsibility for their own financial futures then they could be left in a position where they can't even cover the essential expenditure in their lives."

It is not unreasonable to assume that Scottish Widows would like to sell these underprotected families some protection.

Stupid Users

A recent survey carried out by Quest Software, has identified that some of the major players in the City of London have their security compromised by the stupidity of their staff.

The Quest Software survey looked at the best security practices in Square Mile, and found that whilst companies may have good security policies they were being undermined by user stupidity.

Over 25% of workers shared passwords between work PCs and their normal home PCs. This makes it easier for thieves to hack into "secure" systems.

Quest also found that some security policies at some financial institutional were inadequate. Some passwords were less than eight characters, making them easy to crack. Over 84% allowed users to chose their own passwords, 25% allowed real words rather than random characters.

This follows hot on the heels of reports that major banks are dumping customer details, such as names address and other personal information, in the street.

Given this lax attitude towards security, it is hardly surprising that the incidents of identity theft keep rising.

APACS Debt Report

It is reported that the level of personal debt in the UK now stands at a staggering £1.2 trillion, and that this debt level is increasing.

However, a report on credit card spending for 2005 from the Association of Payment Clearing Services (APACS) has revealed a shift in cardholder behaviour.

The amount that is being spent has started to level off, having risen by just 1% to £124BN, whilst the number of transactions has fallen by 1% to 2.1bn. In addition to this, the report notes that the level of debt repayments has increased. The number of card holders who repaid their credit card in full each month rose from 56% to 59% with 95% of all spending in 2005 repaid in full.

APACS have speculated that this change in behaviour is due to nervousness about economic growth.

To read the APACS report visit APACS.

Hedge Funds Put On Notice

Britain's hedge funds came under fire yesterday, from both the Financial Services Authority (FSA) and the Bank of England.

The FSA's director of Enforcement, Margaret Cole, said:

"Of particular interest to us in Enforcement is the regulator's belief that some hedge funds may be testing the boundaries of acceptable practice with respect to insider trading and market manipulation.

In addition, given their payment of significant commissions and close relations with counter-parties, they may be creating incentives for others to commit market abuse.

Characteristically, our main response has been on the surveillance side and we have recently devised metrics to measure the incidence of unusual price movements in order to see if this belief is correct."

The Bank of England's deputy governor, Sir John Gieve, chimed in and warned that hedge funds would be at the centre of the next crisis in financial markets. He said that he was concerned that many funds had begun taking aggressive risks again over the past few weeks.

The message to the hedge funds is clear, "keep your noses clean" as they are now being watched very closely. Britain can do without another scandal in the financial services industry.

To read more see The Independent.

Endowment Mortgage Misery Continues

Quite unbelievably, even though endowment mortgages have been shown to be the worst fanancial product ever foisted on the unsuspecting British public in living memory, around 40,000 of these useless underperforming products were sold in the first six months of this year. Even worse, around 100,000 were sold last year.

It beggars belief that, despite the lousy performance and negative publicity surrounding these useless products, people are still prepare to fall for the salesman's patter.

It also beggars belief that life assurance companies have the balls to continue to sell them. Clearly money and profits come before reputation and integrity.

A smooth talking salesman can earn a commission equivalent to the first 18 months' premiums, just for selling the policy. He can then continue to get paid annual commission, as long as the hapless endowment owner continues to keep the plan going.

It is little wonder that many people in Britain have lost confidence in the life assurance industry, and the financial services sector as a whole.

To read more, visit This Is Money.

Hefty Mortgages For Hefty Bonuses

Those of you expecting a hefty bonus this Christmas, yet looking to borrow a minimum of £500K, may care to take a look at the Woolwich's "The City Bonus Mortgage".

The product offers a minimum loan of £500K, with an offset facility.

The City Bonus Mortgage offer starts at a 0.51% discount below the Bank of England's base rate, offering an initial pay rate of 4.24%.

This lasts until July 2007, when it reverts to base rate plus 0.49%. This would give a current pay rate of 5.24% for the life of the loan. The mortgage has an arrangement fee of £1,499.

To read more about this visit Citywire

Gordon Brown Pledges Cuts in Red Tape

Hot on the heels of a report issued by the UK government's regulation watchdog, that said that the UK's obsession with regulation is destroying the UK's "national resilience and spirit of adventure", Gordon Brown is seeking to pacify the great and good of the City by pledging to cut red tape by 25%.

He will deliver this pledge toady, at the financial services summit at No 11 Downing Street.

Words are cheap, by his actions so shall he be judged.

To read more visit The Telegraph.

Empty Home Loans

Owners of empty homes in Kent are being targeted by a new initiative which, if taken up by other councils, could help to bring thousands of derelict properties back into use.

Kent County Council last week launched a £5m fund which will provide interest-free loans to landlords, developers and owners to cover the cost of renovation and refurbishment of about 9,000 empty properties in the east of the county.

One of the main stumbling blocks for owners of empty homes is often a lack of funds with which to renovate a property and bring it back into use. So the county is working with councils in Dover, Shepway, Swale and Thanet to offer any owner of an empty property - or anyone considering buying one - interest-free loans for renovation or refurbishment of to £25,000 per single dwelling.

As much as £175,000 could be available for properties that could be converted into more than one flat. The property in question has to have been empty for at least six months, and owners taking out loans now must bring it back into residential use by March 2008.

To read the article in full, visit The Observer.

Secret Payments

It appears that some major financial institutions, that sold the hapless British home owners their useless and underperforming endowment policies, are conducting a secret "payoff" exercise.

Fearful that their already tarnished reputations will be further dragged through the muck and mire, some of Britain's leading financial institutions are paying off endowment holders, so as to avoid fines from the FSA and further reputational damage.

Included on the list of shame are; Barclays, Halifax, Friends Provident and Legal & General. They are reportedly secretly contacting customers, and offering to "review" the way business has been handled.

Pretty pathetic isn't it?

Hardly surprising that people long ago lost faith in the financial services industry in Britain.

Source This Is Money