Money News: Shoppers to be compensated in store-card cover crackdown
Sunday 04 February 2007
Tens of thousands of shoppers could be in line for compensation after GE Capital Bank, the company behind the high-street store cards offered by retailers such as Debenhams and Topshop, was fined £610,000 for failing to sell payment protection insurance (PPI) properly.
The Financial Services Authority (FSA) ruled last week that GECB neither treated customers fairly nor had "adequate systems and controls" to sell PPI, which is designed to cover loan repayments in the event of illness, unemployment or accident.
Training of staff who sold PPI was inadequate, said the City regulator, and many customers had not received full information about their policy before signing up.
The card company says it is now taking steps to tighten procedures and is getting in touch with customers to pay compensation where appropriate.
GECB, which provides card services for names including Miss Selfridge, B&Q and Asda, usually offers PPI at the till when customers are applying for a store card. But critics, including the charity Citizens Advice, have long voiced concerns about the low claims ratios on PPI policies (which often exclude the self-employed, for example), and the high commission rates paid to sales staff.
The FSA found that, at any one time, 300,000 retail assistants employed in stores are permitted to sell insurance on behalf of GECB. In 2005 alone, 850,000 PPI policies were sold on its behalf.
"Millions of people take out store cards every year," said Margaret Cole, the FSA's director of enforcement. "They need to know that PPI is almost always optional and should consider whether they need it before signing up."
She stressed that the FSA would continue to monitor the situation.
"We are determined to see significantly better practice in PPI sales and will crack down where firms fail to treat their customers fairly."
The FSA says that by the end of the year it will have investigated more than 200 firms selling PPI. It has already issued four fines, including those for brokers Regency and Loans.co.uk.
Housing: Repossessions up by 65% last year
The number of home repossessions climbed by two-thirds last year to 17,000, according to the Council of Mortgage Lenders (CML).
A rise from 10,310 in 2005 means that one in every 690 mortgage holders was unable to keep up with repayments and had their home repossessed.
However, the rate of increase slowed sharply in the second half of the year to 8,860, compared with 8,140 in the first half. This resulted in a figure that was lower than the previous forecasts of 18,000.
The CML said the rise was mostly down to lenders' readiness to give home loans to people with poor credit records, among whom arrears and possession rates are higher. It expects repossessions to rise again this year and next - to 19,000 in 2007 and 20,000 in 2008.
The CML said the most vulnerable borrowers were those on variable rates of interest, but warned that if interest rates rose further, this would expose a much wider spectrum of borrowers to possible difficulties.
The housing charity Shelter said its advisers had seen mortgage arrears and repossession problems more than double in the past two years - and that it had received more than 70,000 hits on its website about repossession.
"The massive rise of 65 per cent in mortgage repossessions means more ordinary hard-working families face the nightmare of becoming homeless," said spokesman Adam Sampson. "Spiralling house prices, created by a desperate shortage of housing, are forcing more families to overstretch themselves to get on the property ladder."
He urged mortgage providers to be more responsible - particularly when lending large sums of money to vulnerable people on low incomes.
Pensions: Campaigners go to the High Court
Workers campaigning for compensation over the loss of their pensions when their employers collapsed will this week meet the Government in the High Court.
The Pensions Action Group (PAG) is using a judicial review to challenge the Government's rejection of recommendations by both the Parliamentary Ombudsman and a Commons select committee that up to 125,000 workers should receive compensation. Last year the Ombudsman, Ann Abraham, accused the Government of maladministration over the issue.
The PAG, led by the economist and pensions guru Ros Altmann, says ministers should accept the Ombudsman's findings. The group is now fighting for compensation.
But the Government has repeatedly maintained that the workers' loss is not its fault. In the event of winning the case, It has threatened to pursue the claimants for all its defence costs; usually it agrees to cap these at a low level. The Government's legal bill is expected to be around £125,000, which could bankrupt PAG claimants.
The group said that while this was a "very frightening prospect", they felt they had no choice but to go ahead with the case "to try to force ministers to accept their responsibilities for this injustice".
The case will be heard in the High Court on Wednesday and Thursday, and the PAG is set to hold a demonstration in Parliament Square on Wednesday.
The best deals on personal loans: Peer-to-peer providers are more competitive for smaller sums
China stock market: My portfolio's in pain, but it was never for the financially faint-hearted
China stock collapse: Five things you need to know about 'Black Monday'
Questions of Cash: 'Our dividends seem to have disappeared when TSB was bought and then born again'
Mark Dampier: 'Masterly inactivity - the case for sticking with smaller firms'
- 1 The difference between a migrant and refugee, in one sentence
- 2 Miley Cyrus calls out hypocrisy of women’s nipples being taboo
- 3 Celebrity Big Brother 2015: Tila Tequila kicked off show after 'describing Hitler as a good man'
- 4 Watch the Supermoon live: How to see the brightest Moon of the year tonight
- 5 iPhone 5c to be discontinued, no iPhone 6c to replace it
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
Stock up on canned food for stock market crash, warns former Gordon Brown adviser
Labour leadership: Jeremy Corbyn voters most likely to believe 'world is controlled by a secretive elite'
iJobs Money & Business
£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...
£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...
£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...
£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...
Day In a Page
In a sandbanks location, moments from the beach, this three-bedroom apartment has a large open-plan living area and a south-west facing balcony.
This four-bedroom home has an annexe accessed from the side of the house, with potential for improvement and conversion subject to the necessary permissions.
In the heart of the hamlet of Wardley, this five-bedroom period home offers countryside views and a stylish interior, with original features and open fireplaces.
Offering countryside views and landscaped gardens, this three-bedroom Grade II-listed lodge has a spacious conservatory and a large cellar that could serve as a workshop.
Set in approximately 1.5 acres, this four-bedroom home comes with a second, detached property that's currently used as an annexe.
In the hamlet of Newchurch, this former parish church is now a four-bedroom home complete with clock tower and eyrie.
Offering scenic views from a large balcony and sun terrace, this four-bedroom home has a wraparound garden and a heated swimming pool.
Offering views across the Humber and East Yorkshire Wolds from a glass panelled balcony, this four-bedroom barn-style home befits a life of leisure.
This four-bedroom home offers versatile accommodation with annexe potential; features include a hot tub, sauna and Norwegian BBQ hut.
Well-located for schools, colleges and the town centre, this contemporary thatched cottage offers flexible living space with six bedrooms.
Built in 1907, this four-bedroom Edwardian period home has been refurbished by the current owners, retaining many original period features.
Surrounded by landscaped gardens, this five-bedroom home offers living space across three floors.
This lovely country home in Burnham Market is currently run as a popular holiday cottage, with five en suite bedrooms and colourful gardens.
This three-bedroom 17th-century former village bakery is just a few miles from the East Sussex coast.
Set on a landscaped plot, this light and airy four-bedroom home comes with a log burner in the lounge, a fitted kitchen and an open-plan ground-floor layout.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Built on a former chapel site, this impressive four-bedroom home boasts balconies, stunning views and contemporary modern living.
This three-bedroom house is situated in a quiet mews and set over three floors. Features include glazed staircases and high ceilings.
A period townhouse set over four floors, this five-bedroom home was built in the 18th Century and retains many original features.
With five bedrooms, this spacious home offers beautiful gardens and modern interiors - set within the popular market town of Bingley.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This first-floor flat comes with two bedrooms, an impressive open-plan reception room and two lovely roof terraces.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Moored at Taggs Island and reached via a pretty garden, this two-bedroom houseboat has a vaulted reception room and skylit garden studio - currently a beauty salon.
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
A contemporary house spread over three storeys, this three-bedroom detached home has large sliding doors that open out to the River Quaggy.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
This former village bakery, dating back to the 17th century, is now a three-bedroom detached home just a few miles from the East Sussex coast.
On the picturesque Isle of Man, this four-bedroom character home has a ground-floor shop that's currently run as a newsagents and a flat that would make an ideal holiday let.
In a new collection of flats, this first-floor two-bedroom apartment offers ample entertaining space and a prime view of Furze Green from a private balcony.
This three-bedroom stone-built cottage currently trades as the village store with a restaurant in the annexe and family accommodation on the upper floors.
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.
Less than five miles from Malmesbury, this four-bedroom cottage comes with equestrian facilities and gardens that extend to approximately three acres.
Spanning three storeys, this late-Victorian five-bedroom farmhouse is a spacious family home with a modern interior and B&B potential.
With an original church arch, this triplex one-bedroom church conversion has a light, spacious, feel and comes with a secure off-street parking space.