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Business, Consumer, Consumer Services, Financial Services, Services

Another £400m Into RBS’ PPI Compensation Fund, Says Missoldppiclaims.info

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The Royal Bank of Scotland has earmarked an additional £400m to cover the cost of compensation and refunds relating to mis-sold payment protection insurance (PPI), says leading PPI Claims Company Missoldppiclaims.info.

The nationalised bank has released figures for the last quarter showing a pre-tax loss of£1.26bn, a proportion of which is due to the allocation of a further £400m to its PPIcompensation fund. In a move echoed around the banking industry in recent months, RBS now has increased its total PPI allocation to now stand at £1.7bn. However, it is unlikely to be the end of the compensation claims for the beleaguered bank.

Its recent computer problems resulted in significant numbers of RBS, Natwest and Ulster Bank customers being locked out of their accounts for days, a mistake which has cost£175million so far with a further £50m of compensation put aside.

RBS is also part of an investigation by regulators in the UK, US and Asia – including the fraud division of the US justice department – over the part it played in the manipulation of the LIBOR inter-bank lending rate. With settlement negotiations imminent, the fines that could potentially be applied RBS believe could have a “material” impact on the company.

Despite the problems, RBS showed operating profits for the third quarter increased from£650m to £1bn, while bad debt fell by £159m and staff costs were 5% lower due to a 7% reduction in staff.

Stephen Hester, chief executive of RBS, said: “The extraordinary challenges which RBS faced following the financial crisis are being worked through successfully. The five year restructuring plan is now in its later stages with important work still to do, including an emphasis on dealing with reputational issues now that the bank’s safety and soundness has advanced so well.”

A spokesperson for leading PPI Claims Management Company, Missoldppiclaims.info said: “It’s good to see RBS recognising its responsibilities towards customers that were mis-sold PPI policies, in particular the responsibility to put customers first and treat them fairly. This can be seen in its decision to increase lending to its business customers even though there was a downturn in loan applications, but it would be good to see a similar helpful response to borrowing for its non-business customers with personal loans and residential mortgages.

The reputational issues Mr Hester refers to are likely to be industry criticisms that RBS customers play second fiddle to the short-term interests of shareholders and staff. As a result, RBS has relaxed its lending position towards its small and medium (SMEs)businesses, which has led to a an increase of new lending by 3% since the second quarter despite a 25% drop in SME loan applications due to the Olympics and doubts over the stability of the UK economy.

Analyst Richard Hunter, head of equities at Hargreaves Lansdown, said: “There is no doubting the immensity of the task RBS has faced in executing its turnaround plan, nor indeed the progress made so far.”

Via EPR Network
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Business, Consumer, Consumer Information, Consumer Services, Financial Services

Prudential Lifetime Mortgage research finds that more than one in four Britons will head to parents or in-laws homes during the festive season

Prudential Lifetime Mortgage reports the traditional family Christmas is set for a comeback this year, with more than one on four (28 per cent) of British adults intending to spend Christmas day at parents, in-laws or relatives homes.

The findings, from new research conducted for Prudential Lifetime Mortgage, reveals that just one per cent of British adults intend going to a hotel or restaurant for Christmas day and just two per cent are going on holiday.

According to the Prudential, the family home is set to feature heavily in plans for the entire festive period with more than one in three British adults (37 per cent) intending to spend time over the festive period at their parents or in-laws homes. Of these people more than half (51 per cent) said they are going to parents/in-laws homes as they see it as a hub for the family to get together. 32 per cent said they like getting their Christmas meal cooked for them. 28 per cent said spending time at their parents/in laws homes makes Christmas feel more like a holiday and 22 per cent said going to their parents/in-laws home reminds them of their childhood.

For over a quarter of the nation the family home will be the Christmas venue of choice as people look to tighten their belts this Christmas. The findings reveal that 40 per cent of British adults say they will spend less on Christmas this year.

Keith Haggart, Director of Lifetime Mortgages, Prudential stated: “While it is inevitable that many people will be looking to cut back this Christmas, that doesn’t mean that Britain will be spending the festive period mired in gloom. Millions of people will be spending more time together as a family and for many that means going to their parents or in-laws to enjoy Christmas in the family home.

Keith Haggart continued, “The findings underline the emotional importance of the family home to the entire extended family and at a time when many households will be looking at ways to boost their income, downsizing is not only a challenging proposition in a flat housing market, but could also potentially remove the enjoyment experienced by the rest of the family when visiting the family home. An option is for people to explore whether an equity release plan could help them gain an income from their property while still being able to continue living in it.”

ICM interviewed a random sample of 1050 British adults aged 18+ from its online panel between 7th -9th November 2008. Surveys were conducted across the country and the results have been weighted to the profile of all British adults. ICM is a member of the British Polling Council and abides by its rules. Further information at www.icmresearch.co.uk

About Prudential:
Established in 1848, Prudential plc is an international financial services company with a product range which extends from personal banking, insurance, pensions and retail investments, to institutional fund management and property investments. In the UK Prudential is a leading life and pensions provider with around seven million customers.

Via EPR Network
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Consumer, Consumer Services, Financial Services, Services

LV= Research Has Revealed That Thousands Of Landlords Have Failed To Join A Tenancy Deposit Protection Scheme, Leaving Renters Money At Risk

New LV= research has revealed that thousands of landlords have failed to join a tenancy deposit protection scheme, leaving up to £4 billion of renters’ deposits at risk.

The findings, from home insurer LV, reveal that 29% of renters who have moved in the last 12 months are not part of a tenancy deposit protection (TDP) scheme. Despite this being a legal requirement for landlords to ensure tenants’ deposits are protected by the Government approved scheme.

Introduced in April 2007, the TDP scheme was set up to ensure that tenants’ deposits are not wrongly withheld at the end of a tenancy. The LV= research found that 48% of current renters are unaware that such a scheme exists, and a further 24% said they had heard of the scheme but didn’t know any details of it.

All rental properties where a deposit has been taken since April 2007 are legally covered by the scheme, yet among private renters just 27% said their landlord is signed up. This means thousands of tenants could be at risk of having problems recovering their deposit, with over 77% of renters stating they had previously had some or all of their deposit money unreasonably withheld. The average deposit taken by landlords in the last 12 months is £670, so the potential loss is considerable.

To counter this 13% of private renters surveyed said they had refused to pay rent towards the end of their contract, because they expected problems to arise with the return of their deposit.

Under the TDP scheme, landlords must sign up with one of two schemes run by three Government approved financial companies. In the ‘custodial scheme’, the landlord pays the deposit to the scheme for safekeeping, and in the event of a dispute independent adjudication will decide who receives the deposit money.

In the ‘insurance scheme’ the landlord retains the deposit and pays a premium to an insurer, who will return the money to the tenant if the landlord does not comply with the adjudicated outcome of any dispute. With both schemes, landlords have 14 days from the date the deposit is taken to inform their tenant of the scheme details.

The LV= survey also revealed that 40% of people living in private rented accommodation don’t have any home contents insurance in place, despite the fact that rented properties are more prone to being burgled. Also, of those that do have home insurance, only 10% have a policy that includes a legal advice helpline, which could be used in the event of a dispute with a landlord.

John O’Roarke, Managing Director of LV= home insurance, said: “This research highlights the need for the Government to raise the profile of this legislation and for it to be more strictly enforced, to protect both renters and landlords, as awareness is currently very low. Although the majority of private landlords are undoubtedly honest, our research shows that many tenants have experienced problems getting their deposit money back in the past, and are worried this could happen again.

“The average deposit is over £500, which is a significant amount of money, so renters need to make sure they know their rights. Renters should also always ensure they have home contents insurance in place, as not only are they more likely to be burgled than home owners but some polices will include a legal advice helpline, which could be used in the event of a contractual dispute.”

Via EPR Network
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