The Office of Fair Trading (OFT) has decided to encourage consumers, who have been cheated, to litigate against the miscreants.
The OFT has stated that it believes that the public should have wider access to litigation, if they have bought goods from companies that operated cartels or otherwise colluded to fix prices.
The OFT has also committed to becoming more proactive in helping consumers bring private claims.
Lat year consumers were given the right to sue companies that have engaged in anti-competitive. However, the costs of mounting such a lawsuit has prohibited many from taking them to court.
The OFT has stated that it will address the costs of consumer based litigation. It intends to introduce new forms of "no win, no fee" arrangements.
Matthew Levitt, a competition law expert at Lovells, is quoted as saying:
"The OFT will be sensitive to the need to avoid the 'excesses' of the US system. One of the key features of the US system - triple damages (where consumers are awarded compensation equal to three times their loss) is not part of the OFT's proposals."
However, quite how long the process of taking this forward to practical reality will take is anybodies guess.
Thursday, April 19, 2007
Wednesday, April 18, 2007
Interest Rates Set To Rise
Yesterday's shock rise in inflation to 3.1% has sent a warning signal to the financial markets that interest rates are sure to rise, in order to try to tame the inflationary tiger.
The rise in inflation forced Mervyn King, Governor of The Bank of England, to write a letter of explanation to Gordon Brown, as its rate was more than 1% higher than the 2% target.
This was the first such letter in almost 10 years.
Mr King blamed the sustained rise in inflation partly on sharp increases in food, electricity and gas prices over the past year, but also on businesses discovering a greater degree of pricing power as the economy continued to grow.
Sterling broke the $2 barrier, for the first time since 1992, in anticipation of the rise in interest rates.
However, before savers rush to celebrate in anticipation of seeing their meagre returns on savings rise; they should be aware that banks are very happy to pass on interest rate rises to borrowers, but are remarkably recalcitrant when passing on benefits to savers.
The rise in inflation forced Mervyn King, Governor of The Bank of England, to write a letter of explanation to Gordon Brown, as its rate was more than 1% higher than the 2% target.
This was the first such letter in almost 10 years.
Mr King blamed the sustained rise in inflation partly on sharp increases in food, electricity and gas prices over the past year, but also on businesses discovering a greater degree of pricing power as the economy continued to grow.
Sterling broke the $2 barrier, for the first time since 1992, in anticipation of the rise in interest rates.
However, before savers rush to celebrate in anticipation of seeing their meagre returns on savings rise; they should be aware that banks are very happy to pass on interest rate rises to borrowers, but are remarkably recalcitrant when passing on benefits to savers.
Tuesday, April 17, 2007
NatWest Caves In
Congratulations to the unnamed businessman who took a principled stand against the excess bank charges levelled by NatWest, and succeeded in getting them to refund him £36K.
This is believed to be the largest sum ever refunded to an individual customer, since the start of the consumer revolt against excess bank and credit card charges.
NatWest caved in rather than face Justice in court, where it would have had to explain the reasons for its bank charges.
The anonymous Norfolk businessman challenged NatWest over the £26,010 worth of charges he was levied between January 2001 and February 2003. These fees were mainly for cheques and direct debits that bounced. He also claimed £10,280 interest and £400 costs.
Quote:
"The bank said it was my fault that the company grew too big too quickly - ie didn't have enough cashflow."
However, he claimed that his business had a turnover of over £1M, no mean feat, yet NatWest refused him an overdraft above £10,000.
A case management conference had been due to be held next month, in which he had planned to ask the judge to order NatWest to disclose the real cost of bouncing cheques and direct debits.
NatWest blinked first, and decided that it was less expensive to pay him rather than to rack up legal fees and publicly admit the true cost of bouncing a cheque.
However, before everyone reaches for the champagne, consider this; the banks will find other ways to make their living from their hapless customers. Should they be forced to lower their charges for bounced cheques etc, they will simply start charging for other services previously taken for granted as being free.
This is only a victory in battle, not a victory in the war against greedy banks.
The Guardian has created two proforma letters that you can use to reclaim excess bank charges, they can be accessed here Guardian Letters.
This is believed to be the largest sum ever refunded to an individual customer, since the start of the consumer revolt against excess bank and credit card charges.
NatWest caved in rather than face Justice in court, where it would have had to explain the reasons for its bank charges.
The anonymous Norfolk businessman challenged NatWest over the £26,010 worth of charges he was levied between January 2001 and February 2003. These fees were mainly for cheques and direct debits that bounced. He also claimed £10,280 interest and £400 costs.
Quote:
"The bank said it was my fault that the company grew too big too quickly - ie didn't have enough cashflow."
However, he claimed that his business had a turnover of over £1M, no mean feat, yet NatWest refused him an overdraft above £10,000.
A case management conference had been due to be held next month, in which he had planned to ask the judge to order NatWest to disclose the real cost of bouncing cheques and direct debits.
NatWest blinked first, and decided that it was less expensive to pay him rather than to rack up legal fees and publicly admit the true cost of bouncing a cheque.
However, before everyone reaches for the champagne, consider this; the banks will find other ways to make their living from their hapless customers. Should they be forced to lower their charges for bounced cheques etc, they will simply start charging for other services previously taken for granted as being free.
This is only a victory in battle, not a victory in the war against greedy banks.
The Guardian has created two proforma letters that you can use to reclaim excess bank charges, they can be accessed here Guardian Letters.
Monday, April 16, 2007
The World Bank Fiasco
I hold my hands up to mistakenly saying on Friday, with confidence, that Paul Wolfowitz would be out of his job as president of the World Bank by the end of the day.
Monday morning, and he is still there vowing to stay on.
However, whilst I may have got the timing of his departure wrong, I am confident that his position is now untenable and he will soon be gone.
Unfortunately for the World Bank, and those hapless impoverished nations that rely on it, Wolfowitz's dogged determination to stay on and the rancour and negative publicity that this pig headedness is causing does the institution and those that it serves no good whatsoever.
The final nails in the coffin of Wolfowitz's career were driven in on Sunday, when the oversight committee of the bank delivered a public rebuke of his leadership, expressing "great concern" about the institution's future and the need to preserve its credibility and staff morale.
In simple terms, they want him to fall on his sword and go.
Unfortunately, Wolfowitz just doesn't seem to get it; he is working under the delusion that it is alright for him to act outwith the ethical requirements of the bank in the time honoured tradition of "do as I say, not as I do". He is also naively trying to ride the storm out.
The simple fact is that this storm will not die down, the European countries that contribute to the funding of the bank (such as the UK) want him gone. His only support comes from his friends President Bush and Dick Cheney, as the old saying goes "with friends like those..."
Monday morning, and he is still there vowing to stay on.
However, whilst I may have got the timing of his departure wrong, I am confident that his position is now untenable and he will soon be gone.
Unfortunately for the World Bank, and those hapless impoverished nations that rely on it, Wolfowitz's dogged determination to stay on and the rancour and negative publicity that this pig headedness is causing does the institution and those that it serves no good whatsoever.
The final nails in the coffin of Wolfowitz's career were driven in on Sunday, when the oversight committee of the bank delivered a public rebuke of his leadership, expressing "great concern" about the institution's future and the need to preserve its credibility and staff morale.
In simple terms, they want him to fall on his sword and go.
Unfortunately, Wolfowitz just doesn't seem to get it; he is working under the delusion that it is alright for him to act outwith the ethical requirements of the bank in the time honoured tradition of "do as I say, not as I do". He is also naively trying to ride the storm out.
The simple fact is that this storm will not die down, the European countries that contribute to the funding of the bank (such as the UK) want him gone. His only support comes from his friends President Bush and Dick Cheney, as the old saying goes "with friends like those..."
Friday, April 13, 2007
Sex, Power and Money
Sex, power and money are a heady combination; as any seasoned politician, member of the media or hooker will tell you.
Paul Wolfowitz, Head of the World Bank, has also learnt of the power of such a combination.
His position within the World Bank now looks untenable, as he was publicly booed and heckled by his own staff at a meeting, and forced to leave.
His crime?
Wolfowitz personally intervened to obtain a pay rise for his girlfriend, Shaha Riza, who works at the bank. he got her a nice little earner from $132,660 to $193,590 tax free.
Aside from the obvious ethical issues surrounding the merits of this pay rise, the bank rules actually forbid couples from working together.
Ironically Wolfowitz, who was an advocate of the Iraq war when he was Deputy Defence Secretary for President Bush (who appointed him to the bank), is a strong advocate for tough rules on corruption and corporate governance.
He has forgotten the cardinal rule, lead by example. Those at the top of an organisation must not only be ethical, but must be seen to be ethical.
He will be out of office by the end of the day.
Paul Wolfowitz, Head of the World Bank, has also learnt of the power of such a combination.
His position within the World Bank now looks untenable, as he was publicly booed and heckled by his own staff at a meeting, and forced to leave.
His crime?
Wolfowitz personally intervened to obtain a pay rise for his girlfriend, Shaha Riza, who works at the bank. he got her a nice little earner from $132,660 to $193,590 tax free.
Aside from the obvious ethical issues surrounding the merits of this pay rise, the bank rules actually forbid couples from working together.
Ironically Wolfowitz, who was an advocate of the Iraq war when he was Deputy Defence Secretary for President Bush (who appointed him to the bank), is a strong advocate for tough rules on corruption and corporate governance.
He has forgotten the cardinal rule, lead by example. Those at the top of an organisation must not only be ethical, but must be seen to be ethical.
He will be out of office by the end of the day.
Thursday, April 12, 2007
The World's Local Bank!
HSBC, which claims to be the "world's local bank", has decided that the concept of "local" is flexible depending on your income.
That at least is the case for the hapless customers of its Poole Canford Cliffs branch.
HSBC have decided that those people that it classifies as non "Premier" are no longer worthy of interacting with staff at its branch in Poole; ie it will ban "face to face" interaction with "poor people".
Why is this?
Seemingly Poole is a wealthy area and HSBC have more than enough wealthy customers, so they don't need to deal with the "riff raff".
HSBC should take note that it's the "little people" that keep many banks going, as they borrow at exorbitant rates of interst and become steadily indebted.
Arrogance comes before a fall.
To find out if you qualify to see a human being at HSBC's Poole branch, take this simple test:
Do you have:
-£50,000 savings?
-or a £200,000 mortgage?
-or a £100,000 mortgage and £75,000 salary?
-or pay £19.95 a month "premier" account fee?
No?
Then Fark Off!
That at least is the case for the hapless customers of its Poole Canford Cliffs branch.
HSBC have decided that those people that it classifies as non "Premier" are no longer worthy of interacting with staff at its branch in Poole; ie it will ban "face to face" interaction with "poor people".
Why is this?
Seemingly Poole is a wealthy area and HSBC have more than enough wealthy customers, so they don't need to deal with the "riff raff".
HSBC should take note that it's the "little people" that keep many banks going, as they borrow at exorbitant rates of interst and become steadily indebted.
Arrogance comes before a fall.
To find out if you qualify to see a human being at HSBC's Poole branch, take this simple test:
Do you have:
-£50,000 savings?
-or a £200,000 mortgage?
-or a £100,000 mortgage and £75,000 salary?
-or pay £19.95 a month "premier" account fee?
No?
Then Fark Off!
Wednesday, April 11, 2007
FSA Reviews Subprime Sector
The Financial Services Authority (FSA) is to launch an investigation into the subprime mortgage sector.
Specifically the FSA will examine whether customers who get into financial difficulty, after taking on a subprime mortgages, are being treated fairly by banks.
Yet another indication that, following on from the endowment shambles, the mortgage industry in Britain has something of an image problem.
The FSA will also look into lifetime mortgages, and related matters.
Subprime mortgages, aimed at people with poor credit ratings, have caused chaos in the USA as the number of repossessions and defaults rockets.
The FSA will publish its findings this June.
There are approximately 40 companies in the UK that handle subprime business. They account for approximately 6% of the UK mortgage market.
Dan Waters, director of retail policy at the FSA, is quoted in the FT as saying:
"This next stage of the mortgage effectiveness review will focus on more specialised sectors where we think there is greater risk of consumer detriment.
We will also look at the treatment of customers in arrears. The findings of the review will help inform our thinking about how we might apply a more principles-based approach to our mortgage rules."
It shall be interesting to see how principles and mortgages can be "married".
Specifically the FSA will examine whether customers who get into financial difficulty, after taking on a subprime mortgages, are being treated fairly by banks.
Yet another indication that, following on from the endowment shambles, the mortgage industry in Britain has something of an image problem.
The FSA will also look into lifetime mortgages, and related matters.
Subprime mortgages, aimed at people with poor credit ratings, have caused chaos in the USA as the number of repossessions and defaults rockets.
The FSA will publish its findings this June.
There are approximately 40 companies in the UK that handle subprime business. They account for approximately 6% of the UK mortgage market.
Dan Waters, director of retail policy at the FSA, is quoted in the FT as saying:
"This next stage of the mortgage effectiveness review will focus on more specialised sectors where we think there is greater risk of consumer detriment.
We will also look at the treatment of customers in arrears. The findings of the review will help inform our thinking about how we might apply a more principles-based approach to our mortgage rules."
It shall be interesting to see how principles and mortgages can be "married".
Tuesday, April 10, 2007
Hacking Threat To 5 Million PC's
Research, carried out by the government, indicates that around 5 million UK home computers are open to criminal attack.
"Internet Safety: The State of the Nation" has been published on the government's website www.getsafeonline.org.
The research shows that UK PC owners are making fundamental errors, that expose them to hacking and identity theft.
Tony Neate, managing director of Get Safe Online said:
"Protecting your home PC is a basic part of being safe and secure from the threat of criminal activity on the internet.
The fact that there are millions of households where the virtual backdoor is left wide open for criminals is a real concern – these people risk not only losing their own personal and financial information, but also put others at risk if criminals are able to access an innocent user's PC or internet connection. None of us would ever leave home without locking our doors and windows; by taking a few simple steps we can all ensure that our computers' doors and windows are automatically 'locked' every time they are switched on."
The research found that:
Nick McGrath, Microsoft and Get Safe Online spokesperson, said:
"Governments and businesses are working tirelessly to counter online security threats but the reality is we're dealing with criminals who use ever more sophisticated methods to attack computers.
Regardless of security measures that have been pre-installed, entirely new and complex threats will continue to emerge.
Prevention is the best defence! For many people today, a PC is increasingly becoming a vital investment for the home and as long as some basic measures are taken from the moment of boot-up and throughout its life-time, it can remain that way."
You have been warned!
"Internet Safety: The State of the Nation" has been published on the government's website www.getsafeonline.org.
The research shows that UK PC owners are making fundamental errors, that expose them to hacking and identity theft.
Tony Neate, managing director of Get Safe Online said:
"Protecting your home PC is a basic part of being safe and secure from the threat of criminal activity on the internet.
The fact that there are millions of households where the virtual backdoor is left wide open for criminals is a real concern – these people risk not only losing their own personal and financial information, but also put others at risk if criminals are able to access an innocent user's PC or internet connection. None of us would ever leave home without locking our doors and windows; by taking a few simple steps we can all ensure that our computers' doors and windows are automatically 'locked' every time they are switched on."
The research found that:
- 36% of the UK's 13.9 million home internet-connected PC users – 5 million machines – do not have any form of firewall stopping hackers from gaining access to their computers and using personal information.
- 46% do not have anti-spyware software.
- 35% of home PC users said they do not download updates from Microsoft or Apple to ensure that their machines have the latest security updates.
- Over 10% of the 9 million broadband users in the UK do not have a firewall on their home PCs.
- 21% households that use wireless broadband for their PCs say that they do not have password protection on their connections. This means that criminals could "take over" their internet connection and use it to send thousands of spam emails, posing as the legitimate user.
- 25% of home PC users do not have anti-spam programmes which would protect them from "phishing" attacks and other email frauds.
- Almost 1 million home PC users do not have anti-virus software on their machines.
Nick McGrath, Microsoft and Get Safe Online spokesperson, said:
"Governments and businesses are working tirelessly to counter online security threats but the reality is we're dealing with criminals who use ever more sophisticated methods to attack computers.
Regardless of security measures that have been pre-installed, entirely new and complex threats will continue to emerge.
Prevention is the best defence! For many people today, a PC is increasingly becoming a vital investment for the home and as long as some basic measures are taken from the moment of boot-up and throughout its life-time, it can remain that way."
You have been warned!
Thursday, April 05, 2007
What Goes Around, Comes Around II
In case you are worried that Gordon Brown's raid on pensions ten years ago, which effectively destroyed one of the most successful pensions industry in the world, will have adversely affected his pension...please worry no more.
The Liberal Democrat pensions spokesman, Lord Matthew Oakeshott, said that the chancellor would have a pension pot worth more than £3.5M if he became prime minister.
How does this come about?
Simple, MPs' pensions have been unaffected because they have successively voted to make up the shortfall with taxpayers' funds.
Brown will pay dearly for this.
The Liberal Democrat pensions spokesman, Lord Matthew Oakeshott, said that the chancellor would have a pension pot worth more than £3.5M if he became prime minister.
How does this come about?
Simple, MPs' pensions have been unaffected because they have successively voted to make up the shortfall with taxpayers' funds.
Brown will pay dearly for this.
Tuesday, April 03, 2007
What Goes Around, Comes Around
Those of you with reasonably long memories may recall the heady days of 1997 when Gordon Brown, the newly appointed Chancellor, performed his smash and grab raid on the British pension industry.
His sleight of hand, where he raided dividend tax credits, netted him a £5BN a year.
Whilst there were protests at the time, over the dangers that this posed to the pension industry, Brown did what he does best and ignored them
However, as the old saying goes:
"What goes around, comes around"
In the 10 years since Brown's smash and grab raid, the pensions industry in Britain has effectively fallen apart; helped on its way to an unseemly end, in no uncertain terms, by Brown's dividend credit heist.
Those of us, still lucky enough to have a defined benefit company pension are in a fortunate and ever dwindling group. Defined benefit schemes have been closed by many companies, as people have been asked to move to defined contribution schemes.
Those who work for the state, are still enjoying the benefits of the defined benefit scheme. Unfortunately, thanks to Brown, these have become increasingly expensive. The result being that council tax throughout Britain has been raised annually, in order to pay for these pensions.
It is somewhat ironic that only now, after a two year battle using the Freedom of Information Act, that it has come to light that Brown was warned by his advisers of the chaos and damage that his pension smash and grab raid would wreak upon the pensions industry in Britain.
Seemingly, Brown has been fighting to keep this information secret.
Why?
He stands accused of destroying the pension industry, at the very time he seeks to stand for leadership of the Labour Party.
As one cab driver eloquently put it to his Labour party passenger:
"You bastards stole my pension".
Brown will pay a heavy price for this action, he may win leadership of the party but he most assuredly will lose the leadership of the country.
His sleight of hand, where he raided dividend tax credits, netted him a £5BN a year.
Whilst there were protests at the time, over the dangers that this posed to the pension industry, Brown did what he does best and ignored them
However, as the old saying goes:
"What goes around, comes around"
In the 10 years since Brown's smash and grab raid, the pensions industry in Britain has effectively fallen apart; helped on its way to an unseemly end, in no uncertain terms, by Brown's dividend credit heist.
Those of us, still lucky enough to have a defined benefit company pension are in a fortunate and ever dwindling group. Defined benefit schemes have been closed by many companies, as people have been asked to move to defined contribution schemes.
Those who work for the state, are still enjoying the benefits of the defined benefit scheme. Unfortunately, thanks to Brown, these have become increasingly expensive. The result being that council tax throughout Britain has been raised annually, in order to pay for these pensions.
It is somewhat ironic that only now, after a two year battle using the Freedom of Information Act, that it has come to light that Brown was warned by his advisers of the chaos and damage that his pension smash and grab raid would wreak upon the pensions industry in Britain.
Seemingly, Brown has been fighting to keep this information secret.
Why?
He stands accused of destroying the pension industry, at the very time he seeks to stand for leadership of the Labour Party.
As one cab driver eloquently put it to his Labour party passenger:
"You bastards stole my pension".
Brown will pay a heavy price for this action, he may win leadership of the party but he most assuredly will lose the leadership of the country.
Monday, April 02, 2007
The 45 Million Credit Card Heist
Congratulations to TJX for entering the history books, by being the victim of the largest reported data theft in history.
Person or persons unknown have hacked into the TJX database, and stolen data from at least 45.7 million credit and debit cards of shoppers at off-price retailers including T.J. Maxx and Marshalls.
However, the problems for TJX don't end there. Rather foolishly, although they reported the theft 2 months ago, they only reported the number stolen card details last week.
That mistake and the possible security lapses may well cost them dear, as various orangisations are mooting taking legal action against them.
IT experts have been quoted in the Media as saying that the information disclosed to date, indicates that there were security weaknesses viz; failure to promptly delete data on customer transactions, and to guard secrets about how such data is protected through encryption.
Deepak Taneja, chief executive of Aveksa, said:
"It's not clear when information was deleted, it's not clear who had access to what, and it's not clear whether the data kept in all these files was encrypted, so it's very hard to know how big this was."
Card companies and banks around the world are having to reissue cards to customers, as a precaution against fraud.
Information from 45.7 million cards was stolen from transactions beginning in January 2003 and ending November 23 of that year.
TJX faces an investigation by the Federal Trade Commission, which could fine the company, and lawsuits accusing the firm of failing to safeguard private data.
TJX is the parent company of the T.J. Maxx, Marshalls, HomeGoods and A.J. Wright stores in the US, Winners and HomeSense in Canada and T.K. Maxx in Britain.
Person or persons unknown have hacked into the TJX database, and stolen data from at least 45.7 million credit and debit cards of shoppers at off-price retailers including T.J. Maxx and Marshalls.
However, the problems for TJX don't end there. Rather foolishly, although they reported the theft 2 months ago, they only reported the number stolen card details last week.
That mistake and the possible security lapses may well cost them dear, as various orangisations are mooting taking legal action against them.
IT experts have been quoted in the Media as saying that the information disclosed to date, indicates that there were security weaknesses viz; failure to promptly delete data on customer transactions, and to guard secrets about how such data is protected through encryption.
Deepak Taneja, chief executive of Aveksa, said:
"It's not clear when information was deleted, it's not clear who had access to what, and it's not clear whether the data kept in all these files was encrypted, so it's very hard to know how big this was."
Card companies and banks around the world are having to reissue cards to customers, as a precaution against fraud.
Information from 45.7 million cards was stolen from transactions beginning in January 2003 and ending November 23 of that year.
TJX faces an investigation by the Federal Trade Commission, which could fine the company, and lawsuits accusing the firm of failing to safeguard private data.
TJX is the parent company of the T.J. Maxx, Marshalls, HomeGoods and A.J. Wright stores in the US, Winners and HomeSense in Canada and T.K. Maxx in Britain.
Friday, March 30, 2007
OFT Backs Down
Proving once again that the financial regulatory bodies in Britain are "pussies", when it comes to standing up to vested interests, the Office of fair Trading (OFT) has baoked down on imposing limits on bank charges.
The OFT tried its best to save face by shrouding its decision in the thin, and flimsy, veneer of initiating an in depth review.
Stating:
"The banking industry is not straightforward and that a more detailed examination is needed".
However, the reality is that the OFT has faced sustained and intense lobbying from the banks and they have a greater sway with the OFT than the consumer.
Some banks have threatened to end free accounts, were there to be a regulatory move against excessive and unjustifiable bank charges.
Needless to say, consumer groups see the OFT decisions for what it is (a total climbdown).
Which? said:
"We agree it's crucial the OFT investigates retail bank pricing. But today's announcement still leaves people in the dark about unfair bank charges.
Before the end of the year consumers could be charged up to £3.5BN by their banks in unauthorised overdraft charges. So we are telling consumers not to be put off claiming back their charges while the OFT is looking into this - claim them back now."
In 2006 Which? calculated that bank customers pay £4.7BN each year on default charges. No wonder the banks like to make these charges.
John Fingleton, OFT chief executive, said:
"The UK retail banking market performs well in many dimensions, especially relative to international norms. However, the issue of bank current account charges is a matter of real concern to the banks' customers, and raises wider questions about competition and transparency of pricing."
However, just because the OFT are "pussies" doesn't mean that the consumer has to be one. Consumers should challenge every single unreasonable charge levelled on them by banks, as a matter of course, in many cases these challenges result in refunds being made.
If nothing else, at least it annoys the hell out of the banks and might make them think twice about "drinking the well dry" (ie overcharging consumers).
The OFT tried its best to save face by shrouding its decision in the thin, and flimsy, veneer of initiating an in depth review.
Stating:
"The banking industry is not straightforward and that a more detailed examination is needed".
However, the reality is that the OFT has faced sustained and intense lobbying from the banks and they have a greater sway with the OFT than the consumer.
Some banks have threatened to end free accounts, were there to be a regulatory move against excessive and unjustifiable bank charges.
Needless to say, consumer groups see the OFT decisions for what it is (a total climbdown).
Which? said:
"We agree it's crucial the OFT investigates retail bank pricing. But today's announcement still leaves people in the dark about unfair bank charges.
Before the end of the year consumers could be charged up to £3.5BN by their banks in unauthorised overdraft charges. So we are telling consumers not to be put off claiming back their charges while the OFT is looking into this - claim them back now."
In 2006 Which? calculated that bank customers pay £4.7BN each year on default charges. No wonder the banks like to make these charges.
John Fingleton, OFT chief executive, said:
"The UK retail banking market performs well in many dimensions, especially relative to international norms. However, the issue of bank current account charges is a matter of real concern to the banks' customers, and raises wider questions about competition and transparency of pricing."
However, just because the OFT are "pussies" doesn't mean that the consumer has to be one. Consumers should challenge every single unreasonable charge levelled on them by banks, as a matter of course, in many cases these challenges result in refunds being made.
If nothing else, at least it annoys the hell out of the banks and might make them think twice about "drinking the well dry" (ie overcharging consumers).
Thursday, March 29, 2007
Hamper Schemes Ring-Fenced
Following on from the collapse of Farepak, the Christmas hamper company, last year the government has finally got its act together.
It has been announced that payments to Christmas Hamper schemes will be ring-fenced, so that savers will be protected from suffering the same fate as the victims of the Farepak collapse.
Consumer minister, Ian McCartney, said that payments to similar schemes should now be placed in separate accounts, run by independent trustees on behalf of the customers.
The money would only be released to pay for the customers' orders for Christmas hampers and vouchers, not for other business activities.
This of course, in any well run business, should have been happening already.
Quote:
"The companies are now working to introduce these accounts over the coming weeks.
We think that effective safeguards of this type will provide the reassurance consumers are looking for in this industry".
This action was in response to one of the recommendations of a review into Christmas hamper savings schemes collapse by Brian Pomeroy, chairman of the Financial Inclusion Taskforce.
Pomeroy has also called for more to be done to offer consumers better choice within the market, and to educate people about the best options available to them.
Quote:
"This is a market which has operated for many years and provides as many as 700,000 families with a useful way of saving.
However it is vital that more is done to protect its customers and ensure genuine choice for those who want to save for Christmas."
The government's response, whilst being welcome, is somewhat late in the day for the victims of Farepak.
It has been announced that payments to Christmas Hamper schemes will be ring-fenced, so that savers will be protected from suffering the same fate as the victims of the Farepak collapse.
Consumer minister, Ian McCartney, said that payments to similar schemes should now be placed in separate accounts, run by independent trustees on behalf of the customers.
The money would only be released to pay for the customers' orders for Christmas hampers and vouchers, not for other business activities.
This of course, in any well run business, should have been happening already.
Quote:
"The companies are now working to introduce these accounts over the coming weeks.
We think that effective safeguards of this type will provide the reassurance consumers are looking for in this industry".
This action was in response to one of the recommendations of a review into Christmas hamper savings schemes collapse by Brian Pomeroy, chairman of the Financial Inclusion Taskforce.
Pomeroy has also called for more to be done to offer consumers better choice within the market, and to educate people about the best options available to them.
Quote:
"This is a market which has operated for many years and provides as many as 700,000 families with a useful way of saving.
However it is vital that more is done to protect its customers and ensure genuine choice for those who want to save for Christmas."
The government's response, whilst being welcome, is somewhat late in the day for the victims of Farepak.
Tuesday, March 27, 2007
Diamond Geezer
Congratulations to Barclays' president, Bob Diamond, who could according to reports earn £42m for his work in 2006.
This gobsmacking amount is even more gobsmacking, when one takes into account that the CEO of Barclays, John Varley, earns a lot less.
Mr Diamond's £42M comes about from the following:
-He earns a paltry £250K
-He has a potential bonus of £10.4m
-Benefits of £17K
-Shares worth £4.5m
-Paper profit of £5.7m from the Barclays Global Investors Executive Option plan, which he exercised last year.
On top of the above, which comes to £20.9m, Barclays have made a further award of 934,516 shares to Mr Diamond; these are worth nearly £7m at current prices.
If his Barclays Capital investment banking operation and other businesses continue the performance of recent years, that could be increased to 2.8 million shares worth £21m, bringing the maximum total earnings from work in 2006 to £41.9m at current prices.
On top of that Mr Diamond could receive a further £14.8m "retention" bonus this year. His total holdings in Barclays shares, through various option plans, amount to nearly £70m.
John Varley earned a paltry £3.2m plus £1.2m in shares in 2006.
It is ironic that Barclays was recently given a public flaying on the BBC programme "Whistleblower", for mis-selling and fraud, and that it is also under fire along with other banks for its excess penalty charges.
Well, look at it this way, they have to make money somehow; otherwise how on earth could they afford to pay Mr Diamond?
This gobsmacking amount is even more gobsmacking, when one takes into account that the CEO of Barclays, John Varley, earns a lot less.
Mr Diamond's £42M comes about from the following:
-He earns a paltry £250K
-He has a potential bonus of £10.4m
-Benefits of £17K
-Shares worth £4.5m
-Paper profit of £5.7m from the Barclays Global Investors Executive Option plan, which he exercised last year.
On top of the above, which comes to £20.9m, Barclays have made a further award of 934,516 shares to Mr Diamond; these are worth nearly £7m at current prices.
If his Barclays Capital investment banking operation and other businesses continue the performance of recent years, that could be increased to 2.8 million shares worth £21m, bringing the maximum total earnings from work in 2006 to £41.9m at current prices.
On top of that Mr Diamond could receive a further £14.8m "retention" bonus this year. His total holdings in Barclays shares, through various option plans, amount to nearly £70m.
John Varley earned a paltry £3.2m plus £1.2m in shares in 2006.
It is ironic that Barclays was recently given a public flaying on the BBC programme "Whistleblower", for mis-selling and fraud, and that it is also under fire along with other banks for its excess penalty charges.
Well, look at it this way, they have to make money somehow; otherwise how on earth could they afford to pay Mr Diamond?
Monday, March 26, 2007
Credit Card Users Missing Perks
A survey for credit card provider Goldfish, has revealed that 52% of UK credit card holders are missing out on perks offered by their cards.
Charlotte Hogg, Goldfish credit card managing director, said:
"Credit card holders need to demand more from their plastic. If customers hold a card that doesn't reward their spending then they should investigate what other cards might be better suited to their spending patterns.
We have found that an increasing number of our customers are using their credit cards for everyday purchases such as groceries and petrol, realising that they can reap rewards for all the regular purchases they make anyway."
Given the outlandish interest rates that credit cards charge on outstanding balances, the owners of these cards are very foolish not to take advantage of the rather modest perks.
Charlotte Hogg, Goldfish credit card managing director, said:
"Credit card holders need to demand more from their plastic. If customers hold a card that doesn't reward their spending then they should investigate what other cards might be better suited to their spending patterns.
We have found that an increasing number of our customers are using their credit cards for everyday purchases such as groceries and petrol, realising that they can reap rewards for all the regular purchases they make anyway."
Given the outlandish interest rates that credit cards charge on outstanding balances, the owners of these cards are very foolish not to take advantage of the rather modest perks.
Subscribe to:
Posts (Atom)