Thursday, 26 June 2014

Rip-off News round-up. Our pick of the last week's media (Thu 26th June)

Barclays shares fall 6.5% on new fraud accusation
The New York attorney general has filed a fraud lawsuit against Barclays. The lawsuit alleges the bank falsified documents and misrepresented benefits it was offering to big institutional clients, including pension funds. It relates to the bank's "dark pool" trading operations, which allow clients to trade large blocks of shares while keeping prices private. Barclays has begun an internal probe into the allegations. In an email to staff, Barclays chief executive Antony Jenkins said: "I will not tolerate any circumstances in which our clients are lied to or misled and any instances I discover will be dealt with severely.” Barclays has been the subject of several investigations, fines and settlements in recent years. In May it was fined £26m by UK regulators after one of its traders was discovered attempting to fix the price of gold. In April, Barclays agreed to a $280m (£167m) settlement with the US Federal Housing and Finance Authority (FHFA), which claimed that Barclays misled US mortgage lenders Fannie Mae and Freddie Mac during the housing crisis. In 2012 it was fined £290m by UK regulators for attempting to manipulate an important lending rate, known as Libor. BBC NEWS

Energy companies under “once and for all” investigation over high profits and prices
Britain's Big Six energy companies face the threat of being broken up for ripping off customers after regulator Ofgem asked the top competition watchdog to investigate their profits and prices. The Competition and Markets Authority will begin its “once and for all” investigation “immediately”, Ofgem said, and is likely to conclude by the end of next year. The referral, which Ofgem first proposed in March, came as the regulator published new data suggesting that energy suppliers’ profit margins had increased further this month. It suggested they stood to make £101 before interest and tax from a typical bill over the next year - a 7.5pc margin and an increase from £96 last month and from £48 a year ago. The Big Six companies - British Gas, SSE, Npower, EDF, Scottish Power and E. On - have so far resisted calls to cut prices in the wake of falling wholesale costs, despite the fact they typically claim to require just a 5pc margin. TELEGRAPH

NHS cash problems will get worse next year, finance chiefs believe
The NHS's financial problems are set to worsen next year, with more hospitals ending up in the red, the health services's finance managers have warned. Growing demand for care, pressure on A&E units and the need to hire more nurses to ensure high standards of treatment are driving up costs for NHS care providers, the Healthcare Financial Management Association found. Its survey of 188 finance directors of NHS organisations found that just 12% of 129 hospital finance directors believe their trust will achieve its financial targets in 2015-16, while 44% do not. Similarly, just one in four finance directors in GP-led clinical commissisoning groups, who commission and pay for care, said they would meet their targets. Professor John Appleby, chief economist at the King's Fund thinktank, said: "This report echoes our own surveys and highlights a truth now widely acknowledged within the NHS – that it is heading towards a financial crisis in 2015-16, if not before." GUARDIAN

Tens of thousands march in London against coalition's austerity measures
An estimated 50,000 people marched from the BBC's New Broadcasting House in central London to Westminster. A spokesman for the People's Assembly, which organised the march, said the turnout was "testament to the level of anger there is at the moment". He said that Saturday's action was "just the start", with a second march planned for October in conjunction with the Trades Union Congress, as well as strike action expected next month. The crowds heard speeches at Parliament Square from People's Assembly supporters, including Green MP Caroline Lucas and journalist Owen Jones. Addressing the marchers, Jones said: "Who is really responsible for the mess this country is in? Is it the Polish fruit pickers or the Nigerian nurses? Or is it the bankers who plunged it into economic disaster – or the tax avoiders? It is selective anger." He added: "The Conservatives are using the crisis to push policies they have always supported. For example, the sell-off of the NHS. They have built a country in which most people who are in poverty are also in work." GUARDIAN


Why isn't Wonga in the dock? Fury at payday lender over bogus legal letters used to bully debtors
Britain’s biggest payday lender was yesterday named and shamed by the City watchdog, the Financial Conduct Authority. The FCA ordered it to pay more than £2.6million in compensation to 45,000 customers who received the bogus letters. But consumer groups say there is clear evidence of a criminal deception and insist the police should be brought in. While the company presents itself as the ethical face of the payday loans industry with its friendly TV ad puppets, an investigation by the FCA found extensive evidence of ‘thuggish’ behaviour. Among Wonga’s victims threatened by the fake legal team was a woman who missed repayments because she was in hospital recovering from a miscarriage. The FCA said Wonga sent letters to customers in arrears from what appeared to be two law firms, called ‘Chainey, D’Amato & Shannon’ and ‘Barker and Lowe Legal Recoveries’ – but these two companies were invented by Wonga to put pressure on customers. In some cases extra charges were added to the outstanding debt to cover the cost of sending these threatening letters. Despite the damning evidence, the watchdog added that £2.6million is the biggest compensation order it can impose on Wonga – because the wrongdoing occurred before tougher laws were implemented last year. DAILY MAIL

Homeless figures treble among private rental tenants
In the final quarter of 2009, 1,060 households in England became homeless after their private tenancies were ended, while the latest figure for the first quarter of 2014 is 3,330. It is now the single biggest cause of homelessness in England and most have been thrown out by private landlords. According to government figures, the end of a tenancy has been the most common cause of homelessness every quarter for the last two years. Landlords think it makes straightforward economic sense. Fergus Wilson owns 1,000 properties in the South East and decided to evict 200 tenants who were on housing benefit, because he thought they were at greater risk of defaulting. Low-income families are being hit by a combination of factors: cuts to welfare payments, rising rents and a shortage of social housing. And some are just falling through the gap. BBC NEWS

Reduction in GP funding puts entire NHS at risk, says GP leader
Patients are being put at risk by "brutal disinvestment" in general practice and are now often waiting two weeks for appointments, the chair of the British Medical Association's GPs' committee will warn on Wednesday. In a speech at the annual BMA conference, Chaand Nagpaul will warn that general practice is "imploding". He will say that a reduction of £450m in funding, in real terms, over the past three years, coupled with a 40m increase in annual demand for appointments over the past five years has put the future of many surgeries, and that of the entire NHS, at risk. He accused the government of having gone back on a promise to help 98 practices identified by the NHS as at risk of closure. "They said last year they would provide support and now these practices are finding they have no support," he said. "They have reneged on their promise." GUARDIAN

Living Wage Commission calls for moves to end 'national scandal'
A year-long study by the Living Wage Commission recommended a series of "low-cost" moves to tackle low pay, by building on the UK's economic recovery. The commission, chaired by Archbishop of York John Sentamu, said increasing the pay of half a million public sector workers to the Living Wage could be more than met by higher tax revenues and reduced in-work benefits from a similar number of employees in private firms. Dr Sentamu said: "Working and still living in poverty is a national scandal. For the first time, the majority of people in poverty in the UK are now in working households.”  Also on the Living Wage Commission is Dr Adam Marshall, director of policy and external affairs at the British Chambers of Commerce. He said: "The return to economic growth means that many employers are now looking again at increasing levels of pay for their employees after a tough period for business... Some businesses simply cannot afford to pay a Living Wage just yet - which is why the Commission rejected a compulsory Living Wage. The task now is to support as many employers as possible to make this transition, because paying the Living Wage can benefit employers as well as their staff." TELEGRAPH

Furious investors attack WPP and RBS over excessive bonuses and pay
Nearly 30% of shareholders at the advertising group WPP refusing to endorse a plan that allowed founder Sir Martin Sorrell to receive a £30m windfall last year. Meanwhile, the Royal Bank of Scotland chairman Sir Philip Hampton was forced to defend the bank's bonus schemes, admitting: "Pay in the financial sector, particularly banks, got out of line with other sectors and more importantly the underlying performance of the business... Ultimately taxpayers picked up some of the bills for that." But all RBS resolutions were overwhelmingly passed after the UK government voted its 63% stake in favour of the necessary resolutions. The Treasury had previously forced the state-owned bank to scrap plans to pay its bankers bonuses twice the size of their salaries, but nodded through plans to hand executives payouts of up to 100% of basic salary. GUARDIAN

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