Rip-off News round-up. Our pick of the last week's media (Thu 13th Oct)

RBS destroyed customers' businesses for profit and rewarded staff who targeted struggling firms, leaked files suggest

New documents show a project, labelled by one executive in an email as a 'dash for cash', crippled firms as it dangled hefty bonuses to staff who targeted firms to be 'restructured.' RBS, which was bailed out in the financial crisis by taxpayers, allegedly destroyed thousands of businesses during the crisis to boost profits, according to the secret documents obtained by BuzzFeed News and the BBC. It is believed that RBS bought assets at rock-bottom prices when firms hit difficulties in the economic turmoil which erupted in 2007 to then flog for a profit. Staff were encouraged to target struggling companies and levy them with harsh fees. It meant many went bust while it boosted its own balance sheet. The documents support previous allegations made by now government business adviser Lawrence Tomlinson in 2013. He concluded that RBS deliberately destroyed viable businesses and used their financial turmoil as a way to hoover up assets cheaply. RBS customers have accused it for years of changing borrowing limits based on unrealistically low valuations of their business. Subsequently, many breached lending thresholds. It meant RBS then forced them into the hands of its so-called Global Restructuring Group. GRG would then apply higher interest rates and pressured customers to sell assets in order to repay loans, took equity stakes in businesses and pushed them into administration – all claims also made by Lawrence Tomlinson. GRG was wound-down by RBS in 2014, a year after the report. Roughly 16,000 businesses are said to have been put into GRG after the credit crunch, with loans issued by the unit increasing by a whopping 500 per cent to £65billion between 2007 and 2012. This allowed GRG to rack up healthy profits of £1.2billion in 2011. Many of the owners affected have stepped forward to say they suffered mental and physical health problems as a result of their treatment by the bank. DAILY MAIL

Travellers at risk of 'disgraceful' 'exchange rate profiteering' at airports

Consumer champion Martin Lewis, of  MoneySavingExpert.com, launched a fierce attack on financial companies for taking advantage as one leading airport bought at 1.35 euros and sold at just 97 cents. Tweeting a picture of a Moneycorp exchange rate board which showed buy-sell spreads had edged to more than a third, he wrote: "No wonder they shouted at me 'you're not allowed to photograph that'. Disgraceful exchange rate profiteering [content deleted]" David Buik, a markets commentator for leading stockbroker Panmure Gordon, said consumers were being widely exploited at airports: "The foreign exchange system is not down to Brexit alone... But the pound is under pressure and we are back to the volatility days. It is somewhat inevitable that they will capitalise on vulnerable people. They know exactly what they are doing." Holidaymakers were offered 97 cents for the pound at several airports on Friday after a torrid day in the currency markets following the overnight "flash crash". TELEGRAPH

Bernard Matthews sale sparks pension row as owners will get millions - but members of its pension scheme only 1p in the pound

The details are set to spark a fresh row over pension rights and whether owners should receive huge sums from firms despite black holes in retirement funds. The Bernard Matthews Pension Fund has been left with a gaping £17.5million deficit which is likely to swell to £20million, the report commissioned by MPs show. The business, best known for producing Turkey products, was placed in a special type of insolvency called a pre-pack administration which allows assets to be sold in advance of a firm going under, leaving creditors unpaid. Politicians on the Work and Pensions Select Committee are probing the sale and the use of pre-pack administrations. The MPs asked Professor Prem Sikka of the University of Essex to examine the pre-pack administration arrangement and he claims Rutland is likely to receive £39million. The proceeds of the sale will also be used to make a full payment of £46.4million to lenders Wells Fargo Capital Finance (UK) and PNC Financial Services UK. The administrators have already billed £790,000 and legal fees are likely to amount to £668,000. MPs claim the pre-pack administration arrangement acts against the interests of pensioners who need better protection. Sikka said: ‘The administration strategy seems to have been carefully crafted to enable secured creditors and controllers of Bernard Matthews to extract maximum cash from the company and dump the pension scheme and other liabilities. No attention has been paid to the hardship caused to retired and existing employees’. DAILY MAIL

Crackdown on firms that won't prop up pensions: Regulator demands extra powers in wake of BHS collapse

BHS collapsed into administration earlier this year with a £700million black hole in its retirement scheme. Its failure puts the financial security of thousands of former employees at risk and has led to stinging criticism of former owner Sir Philip Green. The billionaire tycoon – who sold the 88-year-old retailer to three-times bankrupt former racing driver Dominic Chappell a year before its failure – has pledged to 'sort' the deficit but he is yet to make good on that promise. The collapse led to a joint probe by Parliament's business and pensions committees. Work and Pensions Select Committee chairman Frank Field has been a vocal critic of Green, accusing him of behaving like Napoleon and surrounding himself with 'yes' men. There is mounting anxiety over the burden large businesses face from their pension schemes. The 5,945 programmes overseen by the Pension Protection Fund had a combined deficit of £459.4billion at the end of August, £82.6billion more than a month earlier. Big names with major issues include Tesco, which has a £5.9billion black hole. However, a push to give the regulator more power is likely to meet stiff opposition from businesses. Any money put into paying down a firm's pension deficit cannot be handed out to shareholders in the form of dividends. In the case of privately-owned firms such as BHS, this simply means rich businessmen pocket less cash. But large public firms are often partly owned by major pension providers such as Aviva or Legal & General – so forcing them to pay out less could paradoxically hurt other savers. DAILY MAIL

Rent-to-own firm BrightHouse admits new customer affordability checks bring in fewer customers

The controversial retailer, which lets shoppers pay for goods in weekly instalments with annual interest rates of up to 99.9%, said that more detailed checks on shoppers’ finances were having a material impact on the number of customers signing contracts and hurting profits. The company is seeking to bring its practises into line with the regulatory regime overseen by the Financial Conduct Authority (FCA), which took over regulation of the rent-to-own sector from the Office of Fair Trading in 2014. The FCA revealed in the summer that it was concerned about some practices in the rent-to-own sector, including the way in which major players such as BrightHouse had been dealing with affordability assessments and customers who fall behind on payments. Rent-to-own firms sell furniture and other households goods to customers on weekly payment plans. The sector, led by BrightHouse, Perfect Home and Buy as You View, has flourished in recent years as it has become more difficult for some households to access credit. Interest rates are typically higher than on mainstream forms of borrowing. BrightHouse says its rates range from 69.9% to 99.9% depending on the customer’s credit history and length of contract. In the year to 31 March 2016, BrightHouse’s customer base shrank 0.4% to 276,200 as it screened shoppers more carefully, but the average monthly spend for each customer increased by 5% to £120.87. Group sales were up 5.4% at £370.7m, delivering a pre-tax profit before exceptionals of £21m, in line with 2015. Citizens Advice said last week that the number of people struggling with debts to rent-to-own firms and on guarantor loans rose by 16% in the second quarter, as borrowers no longer able to get payday loans move to other, less heavily regulated forms of borrowing. GUARDIAN

Brexit slowdown means 'lower rise' in living wage expected next year

Weak pay growth in the wake of the UK's vote to leave the EU is set to reduce the increase to the National Living Wage by 10p, the Resolution Foundation forecasts. The think tank now expects the rate to rise to £7.50 an hour next year. That would still mean an annual pay rise of up to £600 for full-time staff. The National Living Wage, which was introduced in April, currently stands at £7.20 per hour for workers aged 25 and over. About 4.5 million workers are expected to benefit from the increase - with the amount dependent on how many hours they work. Stephen Clarke, policy analyst at Resolution Foundation told the BBC's Today programme: "The National Living Wage relates to average earnings and because of Brexit, many forecasters, including the Bank of England, revised down their earnings growth; therefore the National Living Wage has also been revised down." Despite the fact that the increase is lower than expected, the report adds that the National Living Wage is still set to transform the country's low-pay, helping some 800,000 workers out of low pay by 2020. Low-pay is defined as an employee earning two-thirds of the country's typical hourly pay. BBC NEWS

Rail delays: New plans to compensate passengers when train is 15 mins late

Rail passengers can currently only make claims when services are delayed by at least 30 minutes. The Department for Transport (DfT) said its new scheme will initially launch on Govia Thameslink Railway services in the next few months before being expanded on other networks. Passenger and rail industry groups said they supported the plans. The changes would also see compensation of 100% of the single fare ticket value for delays of between 60 and 119 minutes. After its initial launch on GTR in the coming months, the DfT said the scheme will be expanded - starting with any new South Western, West Midlands and South Eastern franchises. GTR operates Southern services, which have suffered months of disruption and strikes on rail routes in south London, Surrey, Sussex and Kent. Commenting on the plans, Anthony Smith from watchdog Transport Focus said: "Train companies need to do more to alert passengers to compensation. Passengers expect the process to become smarter and automatic, taking the onus off them to have to claim in the first place - automatic Delay Repay is the way forward". The DfT said all future rail franchises will be required to introduce the compensation policy, and officials said they will explore opportunities to roll it out for all franchises during the current parliament. BBC NEWS