Finance Matters

• 09Oct

  EU to expand e-shoppers’ rights

  Money No Comments

  From The BBC:

  The European Commission has unveiled proposals to give more rights to consumers shopping online across the borders of the 27-nation EU.
  The proposals aim to boost online shopping in Europe to allow people to take advantage of cheaper prices during the economic crisis.
  The commission is asking EU governments to give consumers a two-week cooling-off period to back out of a sale.
  Consumers could also get the right to a refund for delayed deliveries.
  One-third of the EU’s population, that is, 150 million people, shop online. But only 30 million of them do it cross-border.
  The new rules are meant to boost confidence in the sector and give consumers peace of mind when looking for bargains abroad.
  With household budgets under strain, said the EU Consumer Affairs Commissioner Meglena Kuneva, it has never been more important for consumers to shop around to get the best value.
  The commission proposals include a cooling-off period of 14 days for shoppers. In about half of the EU’s 27 coun…

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• 09Oct

  Record fine for PPI mis-selling

  Money No Comments

  From The BBC:

  Alliance & Leicester has been fined a record £7m by the City watchdog for three years of mis-selling sales of payment protection insurance (PPI).
  The Financial Services Authority said the bank had trained its staff to put pressure on customers who queried the inclusion of optional PPI in a quote.
  A&L apologised for its “shortcomings” and said it would pay people back.
  PPI is typically sold alongside a loan and provides cover if the debt repayments cannot be met.
  A&L sold approximately 210,000 PPI policies to customers seeking a personal loan averaging £1,265 from January 2005 to the end of 2007.
  The FSA said there had been a general failure by telephone advisers to give customers details of the cost of PPI.
  ‘Serious’
  “The failings at A&L are the most serious we have found. This is reflected in the record PPI fine,” said Margaret Cole, FSA director of enforcement.

  She said that customers should be able to rely on impartial advice based on their individual circumstances.
  It w…

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• 09Oct

  Fewer low-deposit mortgages

  Money No Comments

  From The BBC:

  The number of mortgages available to buyers with a 5% deposit is shrinking fast, as lending is cut because of the credit crunch and falling house prices.
  There are only 60 such deals currently available from lenders, according to the information service Moneyfacts.
  That number is down from 384 at the start of April, and 860 a year ago.
  Mortgages for 100% or more of a property’s value disappeared at the start of the year and the range of all mortgage deals has since shrunk.
  “Every week or so another lender drops out of lending at 95%,” said Aaron Strutt of Chase de Vere mortgage brokers.
  Disappearing deals
  Those deals that require only a 5% deposit from a borrower are still being offered by some of the UK’s biggest lenders, such as the Nationwide, Abbey and the Halifax.

  But Ray Boulger of mortgage broker John Charcol warned the offers might disappear altogether.
  “For borrowers there is a danger of a much smaller choice of lenders if the situation in the banking market does not…

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• 09Oct

  Energy bills are ‘unfair to some’

  Money No Comments

  From The BBC:

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  Chief Executive of Consumer Focus Ed Mayo
  The energy regulator Ofgem has told companies to stop charging customers different rates if they pay by direct debit or pre-payment meters.
  It added it was unfair that 4.3 million customers with no gas supply could not get the best deals on electricity.
  Ofgem said the energy market worked well for most customers, but told power companies they needed to deliver the benefits of competition to all.
  It found no evidence that firms had been working together to set prices.
  Ofgem started the investigation in February after all the leading suppliers imposed big price rises at the same time.
  There will now be a consultation on the report, which will end on 1 December.
  Billing criticised
  The regulator pointed out that competition could not stop rising prices of oil and coal from pushing up bills.

  However, it said energy firms could do more to make sure that all customers were able to…

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• 09Oct

  Savings guarantee now £50,000

  Money No Comments

  From The BBC:

  The Financial Services Authority (FSA) has raised the limit to the amount of deposits that are guaranteed should a bank go bust to £50,000.
  The new limit will come into effect on Tuesday 7 October. Previously, the first £35,000 of savers’ deposits had been protected.
  The FSA will now consult on whether the limit should be raised even higher.
  Chancellor Alistair Darling said the increase meant 98% of account holders would have all their savings protected.
  The new UK limit is for each customer so joint accounts will be guaranteed up to £100,000.
  Mr Darling said the increase would “go a long way to assuring people that their deposits are safe”.
  Ireland has introduced an unlimited guarantee covering bank deposits.
  Banks in the UK have been concerned that savers would move their money to Ireland to take advantage of the 100% protection.
  Banks covered
  Payments will be made through the Financial Services Compensation Scheme (FSCS) and the FSA has said that it is to look into refor…

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• 09Oct

  Icelandic banks reassure savers

  Money No Comments

  From The BBC:

  Savers in the UK who have put their money into Icelandic banks have been told their deposits are safe.
  That message was given today by the Icelandic government and the two Icelandic banks that operate in the UK.
  Hundreds of thousands of UK savers have put their money into Icelandic banks which pay high interest rates.
  But concerns about their safety rose after a week of reports that the Icelandic economy itself was in difficulties.
  Bank’s response
  Mark Sismey-Durrant, chief executive of Icesave in the UK told Radio 4’s Money Box programme,
  “They shouldn’t be nervous about the state of the bank.
  “We have a strong capital base and 63% of our balance sheet is funded by deposits.
  “We maintain strong liquidity levels.”
  Asked specifically if customers could be sure their money was safe and they could get it out when they wanted he replied, “Yes. They can be.”

  At the end of September the Icelandic government rescued the country’s third biggest bank, Glitnir, buying three quarters…

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• 09Oct

  Sick leave ‘link to early death’

  Money No Comments

  From The BBC:

  People who have long spells of sick leave for psychiatric reasons are twice as likely to die from cancer as healthier employees, research suggests.
  The “unexpected” finding could help pick out at-risk groups, the University College London researchers reported in the British Medical Journal.
  Among 6,500 civil servants, those who had taken a long period of sick leave had a 66% higher risk of early death.
  The cancer risk may be due to depressed people not seeing a doctor soon enough.
  Sickness records were assessed from London-based employees in 20 Whitehall departments between 1985 and 1988 and compared with mortality up until 2004.

  Overall 288 people died during the study.
  The 30% of people who had one or more stints of at least seven days off work had a 66% increased risk of premature death compared to those who had not had any long periods of sick leave, it was found.
  The highest mortality risk was seen in those who had been off work with heart disease, stroke or related condit…

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• 09Oct

  IMF takes action to stem crisis

  Business No Comments

  From The BBC:

  The International Monetary Fund (IMF) has activated an emergency finance mechanism to help countries hit by the financial crisis.
  IMF chief Dominique Strauss-Khan said the lending procedure would allow the IMF to react quickly to support countries facing funding problems.
  The scheme, which was used during the Asian financial crisis in 1997, will help speed up approval of loans.
  He said the world was “on the cusp of recession”, but could still recover.
  Speaking ahead of meetings of the IMF and World Bank, Mr Strauss-Khan urged countries to act “quickly, forcefully, and co-operatively” to solve the global economic problems.
  A day after seven central banks around the world cut interest rates in an effort to calm financial markets, the IMF chief said further co-ordinated action was necessary.
  “All kinds of policy co-operation are to be commended,” he said.
  But he issued a stark warning against countries acting unilaterally to fight the crisis, referring to recent isolated moves by c…

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• 09Oct

  Iceland nationalises biggest bank

  Business No Comments

  From The BBC:

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  Geir Haarde on the ‘painful process’ facing the banking industry
  Iceland has nationalised its biggest bank, Kaupthing, and suspended trade on its stock exchange in an attempt to prevent further panic in the country.
  Kaupthing is the third bank to be rescued by Iceland’s government.
  The OMX Nordic Exchange Iceland is closed for trading for two days because of “unusual market conditions” and will reopen on Monday.
  Meanwhile, Iceland’s Prime Minister Geir Haarde criticised the UK’s move to freeze Icelandic bank assets.
  Mr Haarde said the UK used anti-terrorism legislation to freeze assets in Landsbanki in order to protect UK savings in one of its units, Icesave.
  “We do not consider this to be a particularly friendly act. But we understand that the UK authorities need to act in the interests of their citizens,” he said.

  Prime Minister Gordon Brown has condemned Iceland’s handling of the collapse of its banks and its fail…

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• 09Oct

  Councils ‘not reckless with cash’

  Business No Comments

  From The BBC:

  Local authorities have not been “reckless” in investing more than £760m with Icelandic banks that have now failed, the government has said.
  Deposits from about 100 councils could be at risk, the BBC has learned.
  Ministers have met council leaders and are promising “appropriate” help on a “case-by-case basis”.
  Gordon Brown said he was considering “further action”, but the government is not offering to guarantee authorities’ deposits with Icelandic banks.
  ‘Not pleasant’
  The prime minister told the BBC that the Icelandic authorities’ handling of accounts had been “effectively illegal” and “completely unacceptable”.
  The government has frozen the UK assets of Icelandic bank Landsbanki, saying local authorities will benefit from this.
  But Iceland’s prime minister, Geir Haarde, said it was “not very pleasant” to have laws designed to deal with terrorists used against his country.
  BBC News has so far learned that local authorities across England, Wales and Scotland hold deposits worth…

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