Rip-off News round-up. Our pick of the last week's media (Thu 14th July)

National Living Wage has not led to job losses, survey says

Employers have responded to the new National Living Wage (NLW) by raising prices or reducing profits rather than cutting jobs, according to a survey from the Resolution Foundation. The wage, which requires employers to pay staff aged 25 and over at least £7.20 an hour, was introduced in April. This report is the first snapshot of how firms have reacted to the NLW. It comes after the Office for Budget Responsibility predicted it would lead to 60,000 job losses by 2020. Five hundred companies, covering a range of UK businesses, were questioned just before the referendum on Britain's membership of the European Union, of which 215 said that the new NLW had impacted their wage bill. Some 36% of those affected by the NLW said they had put up their prices to compensate for the higher wage cost, while 29% said they had reduced their profits. Despite reports of some employers cutting back on staff terms and conditions, the survey found that only 8% had cut paid breaks, overtime or bank holiday pay. The policy was announced in last summer's Budget by Chancellor George Osborne, in what he said was a move to create a higher-wage, lower-welfare economy. Workers aged 21 to 24 continue to be paid the National Minimum Wage of £6.70 an hour. A spokesman for the Department for Business said: "The government wants to move to a higher wage, lower tax and lower welfare society and the National Living Wage is a crucial part of achieving this. It is encouraging to hear that employers are investing in training and technology which will help to improve productivity. BBC NEWS

HSBC escaped US money-laundering charges after Osborne's intervention

On Monday, a US congressional report published letters and emails from Osborne and Financial Services Authority (FSA) officials to their US counterparts warning that launching criminal action against HSBC in 2012 could have sparked a “financial calamity”. The US government subsequently decided not to pursue criminal charges against HSBC for allowing terrorists and drug dealers to launder millions of dollars. The report said the FSA was “problematic”, “weighed in very strongly” and caused a “firestorm”, which led the then attorney general, Eric Holder, to overrule the advice of his own prosecutors and not pursue criminal action. Instead of pursuing a prosecution, the bank was made to pay a record $1.92bn (£1.4bn) fine. The House report said Holder “misled” Congress about the justice department’s reasoning for declining to prosecute. It said the department had enough evidence to pursue criminal charges against HSBC and pointed out that the bank had already admitted to the US government that it broke money laundering rules. If HSBC had been found guilty of the potential charges, the US government would have been required to review and possibly revoke its charter to do business in the US. The UK’s FSA repeatedly warned that even the threat of possible charter withdrawal could have caused a fresh global financial crisis. The 2012 settlement detailed how Mexico’s Sinaloa drug cartel and Colombia’s Norte del Valle cartel laundered $881m through HSBC and a Mexican unit. In some cases, Mexican branches had widened tellers’ windows to allow big boxes of cash to be pushed across the counters. HSBC also violated US sanctions by working with customers in Iran, Libya, Sudan, Burma and Cuba. GUARDIAN

Government is letting VW off the hook over emissions scandal, say MPs

In a scathing report, the transport select committee said the Department for Transport had been far too slow and ambivalent over taking any action in the wake of the diesel emissions scandal, while industry regulators had “shown little interest” in whether the law had been broken. Customers in the United States will be compensated after VW admitted last September that 482,000 of its diesel vehicles in the US were fitted with “defeat devices” to pass emission tests, reaching a $15bn settlement last month with federal authorities. But it has not offered any similar redress to UK consumers – a position that the committee described as “deeply unfair”. Although VW said 1.2m UK cars were affected, it has disputed whether the same software is illegal in the EU. Although the then transport secretary, Patrick McLoughlin, said that VW could face action from the Serious Fraud Office, the Competition and Markets Authority (CMA) and under his own powers, the report found: “In practice little action has been taken.” GUARDIAN

Greedy currency firms cash in on falling pound with deals well BELOW market rate in exchange rate rip-off

Furious MPs criticised 'rip-off merchants' for taking advantage of the public's lack of financial knowledge to offer rock-bottom exchange rates. And consumer experts warned that families heading abroad – already suffering from the fall in the pound – were being hit by a 'double whammy' of costs. Following the EU vote, sterling fell 10 per cent against the euro – and to a 31-year low against the dollar. On the night of the referendum – June 23 – £1 was worth 1.31 euros or $1.50. After the result, rates tumbled to 1.22 euros and $1.34 per pound. And the market rate for sterling has since fallen to around 1.173 euros and $1.30. But in the worst cases, tourists are receiving less than a pound per euro, once they have paid commission. On top of this firms typically charge commission fees if customers do not buy their currency online, meaning holidaymakers receive less than a euro per pound. According to online currency firm FairFX, Moneycorp was offering just 1.0002 euros per pound at Bristol Airport on Thursday when the market rate was 1.17504 euros. The firm also charges £4.99 commission on orders below £300, meaning customers receive about 95 euros from £100. Holidaymakers flying from Doncaster Robin Hood Airport receive just 1.02 euros per pound from Travelex. With a £4.99 fee, that means less than 97 euros back from £100. According to the FairFX figures, currency firms have increased their profit margins sharply since the referendum. Before the Brexit vote, the gap between the exchange rates some firms offered and the market rate was much smaller. In mid-April ICE had offered 10 per cent less than the market rate, compared to 14 per cent at Edinburgh Airport on Thursday. DAILY MAIL

France's Hollande joins critics of Ex-European Commission chief Barroso, as he is hired by Goldman Sachs

French President Francois Hollande on Thursday became the most senior critic to date of former European Commission chief Jose Manuel Barroso's decision to take a job at the investment bank Goldman Sachs. Hollande noted that Barroso was running the European Union's executive arm at the time of the U.S. subprime home-loans crisis, which has been blamed for the 2007-2008 global financial crisis. He said Goldman Sachs was "one of the main institutions" involved in selling subprime debt, and also noted the U.S. bank's role helping Greece establish credibility about its finances in the early 2000s. Worries about Greek debt later rocked the currency bloc. "It's not about Europe, it's about morality," said Hollande in his annual interview to mark Bastille day, France's national day. "Legally, it's possible, but morally, it's about the person, it's morally unacceptable." Barroso was hired 20 months after stepping down, shortly after an 18-month "cooling off" period when ex-commissioners must seek clearance for new jobs to avoid conflicts of interest. Earlier this week the French government called on Barroso to walk away from the job and the European Ombudsman called for the EU to tighten rules on commissioners taking appointments on leaving office. REUTERS

Whistleblowers say RBS is desperately selling loans and mortgages ahead of Williams & Glyn re-launch

Staff at a flagship Royal Bank of Scotland branch in the heart of the City of London are being pressured to flog loans and mortgages, according to claims made by whistleblowers. They say branch staff have to cold call customers every day and are bullied into filling managers' diaries – failure to do so means staying late and eventually the stress of being put on a performance contract that puts their job under scrutiny. This particular branch, in Threadneedle Stereet, is set to be re-branded as Williams & Glyn, a bank which is yet to receive its licence from regulators. It means any customers who open a loan or mortgage or other product via this branch will be shifted over to Williams & Glyn once the re-brand happens. The whistleblower says the pressure has started in the past couple of months – and believes it could be to make the branches look good ahead of the move over to the Williams & Glyn brand. 'Staff are very stressed and scared to say anything as the managers will put them on a performance contract and eventually drive them out,' he said. RBS has been forced to break away part of its business as part of its bail out in the aftermath of the financial crisis. RBS said in November last year that it had scrapped sales targets for staff, in a move designed to ensure customers know they are only being sold products in their best interests. Retail banks in general have cracked down on sales targets, after the industry was forced to pay compensation of over £20bn for selling payment protection insurance to customers who did not need it. At the end of last year, the FCA quietly shelved plans for an inquiry into the culture, pay and behaviour of staff in banking. It had planned to look at whether pay, promotion and other incentives had contributed to scandals involving banks in the past. In November 2015 RBS chief executive Ross McEwan announced that bonuses for staff will be scrapped in an attempt to avoid future mis-selling scandals and there will be no sales targets for staff. DAILY MAIL

Thousands of Post Office workers forced to take pension benefits cut

About half the Post Office’s 7,000-strong workforce is being forced to shift from a final salary pension scheme to a defined contribution scheme, a move that unions say could cut retirement benefits by 30% or even more in some cases. The planned pension cuts were announced just days after the Post Office said it would be looking to put 20 more Crown offices into private hands, taking the total this year to 85 in a process opposed by unions who see it as a form of backdoor privatisation of the service. The Post Office was already facing criticism after agreeing to hand over up to 61 branches to WH Smith in April including some of the 39 Crown offices flagged up to be put into private hands in January. Before that, 50 Crown offices, which are run directly by the Post Office, had been franchised or otherwise offloaded since 2013. Andy Furey, a CWU official, said: “CWU is completely opposed to the closure of the Post Office defined benefits pension scheme. This is another cost-cutting exercise to prop up their balance sheet at the expense of staff. The scheme itself is in rude health, carrying a surplus. We will be balloting our members for strike action over this attack on their quality of life after retirement along with our opposition to the company’s dogged pursuit of closures, privatisation and up to 2,000 job losses.” GUARDIAN