13May

Uncertainty at Cooperative Bank following surprise downgrade

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Credit ratings agency Moody’s has downgraded the credit status of the Cooperative bank by a surprising six notches in a move which even surprised the City.

Such a downgrade, from A3 to Ba3, effectively makes the Cooperative’s debt junk status, and will raise the price at which the bank can borrow from the financial markets. The bank itself, whilst expressing its disappointment at the downgrade, is reassuring its customers that it will not need a bailout following the downgrade and a rapid deterioration in the bank’s financial position.

The Cooperative, having 6.5 million customers, a 1.5% share in the current account market, and an enviable reputation for ethical banking and customer service, posted losses of £600m in March. Admitting that it needed to raise fresh capital, in reassuring statements it insisted that current shortfalls could be plugged via selling off its insurance arm or by scaling back its banking interests. Additionally, money could be sought from its parent group which owns a chain of groceries, pharmacists and funeral homes. The bank is careful to stress that it does not need a government bailout, and that it is still liquid.

It is the latest in a rapid series of events to overtake the Manchester based bank. On top of the slow integration of Britannia Building Society – bought out three years ago by the Cooperative- recent months have seen the collapse of a deal to buy 632 branches from Lloyds Banking Group, and the sudden departure of chief executive Barry Tootell. Having replaced former Britannia boss Neville Richardson in 2011 (who left with a pay out of £4.6m), he will himself be replaced temporarily by Rod Bulmer until a permanent successor is found following Mr Tootell’s resignation.

It will be challenging times for Mr Bulmer.  The downgrade comes when Britain’s biggest trade unions are attending the AGM of union- backed Unity Trust Bank- which is 26.7% owned by the Cooperative. Union leaders are very worried at the situation facing the Cooperative, despite reassurances from the Unity Trust Bank. Managing director Richard Wilcox stated that, whilst the Cooperative had been discussed in scheduled meetings as a major investor, “the relationship with Co-op continues to be managed as normal. We work as an independent entity and are not impacted by changes to the credit rating of the Co-operative Bank.”

The situation at the Cooperative comes at a time when the new Prudential Regulation Authority has identified a £25bn shortfall in capital amongst UK banks, in an effort to strengthen the capital position of the UK’s financial institutions. City analysts believe that the Cooperative Bank accounts for between £80m to £1bn of this national shortfall; a shortfall which the same analysts state the Cooperative could fill by selling its insurance business, selling its life insurance interests to Royal London, and simplifying the bank itself.

Moody’s is not so certain that such measures or similar would be able to improve the bank’s closely watched capital ratio. This is low (at 8.8%) compared to other banks, and Moody’s was uncertain that the bank would be able to generate the extra capital needed.

Whatever happens next at the Cooperative, it will happen under great external scrutiny and amidst great uncertainty indicative of the banking sector currently.

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11May

6 Steps for Choosing the Right Debt Settlement Company

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The best debt settlement company  for you is just 6 steps away.

Within a few years, debt problems have amplified like never before. So the demand for proficient debt settlement companies has also increased. Finding a good debt settlement company doesn’t have to be difficult. For example, in a place like California, countless California debt settlement companies are available at your service. You only need to be watchful in order to contact the perfect debt settlement company for your needs.

Following are the 6 steps, which you need to climb without any fail to find out a trustworthy and legitimate debt settlement company in California:

1. Investigate the companies available around you: You can find out lots of debt settlement companies in California. Not all of them are equally good. Check the backgrounds of various companies. Find out what kind of service they provide. Ask people who may have contacted debt settlement companies earlier. Contact those companies that have a good reputation and positive word-of-mouth publicity.

2. Talk to company representative: You must be careful enough while talking to the representative of your chosen debt settlement company. Ask for details regarding the debt settlement program. Know whether or not the company is aware of the California debt settlement laws and follows them rigorously.

3. Know you payment plan properly: Do proper inquiry about your payment plan. You must have all the essential details like, how you need to pay, what is going to be the monthly payment amount and the duration of payment plan. Make sure there is no hidden cost waiting for you in your payment plan.

4. Make sure the collection calls stop: According to the California law, collection agency must not harass a person for collection of debts. The company you are eyeing must be careful about this. If any creditor or collection agency ignores the law and keeps pestering you, then the debt settlement company must take care of that.

5. Don’t deliver your personal information: Your personal information is not necessary for debt settlement programs. So don’t entertain any unfair demands of any company representative. Disclosing your personal information will only drag you into risky situations.

6. Look for written agreement: A lawful debt settlement company must provide you with written documents. All the important details regarding negotiation and settlement must be stated there clearly. If you find any inconsistency, then ask right away. Avoid vagueness to steer clear of menace.

You know it pretty well that there is no dearth of debt settlement companies in California. Many companies claim to provide you with unbelievable offers. Some companies claim instant debt relief without much effort. Some companies even claim they can make your debts disappear as if they never existed. All these things sound too appealing and people tend to fall for these false promises. You must know that your debts can’t disappear, but you can get rid of them through easy payment plans. Search for debt settlement companies which focus on your debt problems and find out an ideal solution for you. Choose California debt settlement company wisely to stay away from scams.

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17Apr

A Concise look at Unsecured Personal Loans

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Financial emergencies don’t come with prior warnings. Sometimes you may find yourself in a situation where you need a sizeable amount of cash and fast. It happens so, when people are caught off guard like this they often don’t have the means to meet the demand personally. At such a time it can be an idea to apply for a short term loan and it is common knowledge that most banks demand collateral against any kind of financing. But what if you do not have collateral to offer? In such times it is best to apply for an UNSECURED PERSONAL LOAN.

In this article you’ll find a brief look at the types, merits and demerits of this kind of financing.

What is an Unsecured Personal Loan?

This kind of credit puts the lender at risk rather than the borrower. Here credit is issued to you without the guarantee of collateral, so even if you miss the timely repayment of it you do not risk losing any material property. Also the application of this kind of credit is not restricted by any rule; the credit obtained here can be invested in a variety of purposes. Nonetheless the amount available under this kind of a scheme is limited and the interest a little steep, though not as high as in the case of credit cards. This happens due to the concern of the lending institutions about their own financial security, as they put themselves at risk by issuing credits without any collateral guaranteeing returns. Thus, the issuance of it depends upon the credit worthiness of the applier. Even though you might not be required to always present a complete and detailed credit history still it will be favorable for you if you have a fairly high credit score.

Kinds of Unsecured Personal Loan- Apart from those offered by credit unions and banks under this name another type of such financing is considered to be cash advance loans. Both serve the same purpose of providing cash on a short notice for your present financial problem. Nonetheless obtaining approval for the latter is easier than obtaining clearance for the former as this type of a plan does not require a detailed previous credit history and also allows the borrower to acquire the credit needed without a co-signer. Companies like UnitedFinances.com offer such loans.

Merits of the scheme

From the above mentioned points it becomes clear that such a type of a credit comes with certain important advantages. These are as follows:

  • The absence of the need to provide collateral brings out the chief advantage of this scheme. This clause ensures that even if you miss out on the repayment, you don’t risk a chance of getting your property confiscated.
  • The rate of interest charged here is considerably lower than that of credit cards. For this reason often individuals pick up unsecured personal financing to pay off other higher debts or credits.

Demerits of the scheme

Despite the benefits it offers there are also certain issues pertaining to the matter of applying for this kind of financing which needs to be deliberated beforehand. Following are some of the features of this kind of a plan which puts the borrower in a disadvantaged position:

  • As there is no collateral to guarantee financial recovery for the lenders in case you miss the repayment, they will definitely ask you to provide documents assuring them that you will be able to pay them back, thus your credit worthiness will be checked too. So if you are in between jobs and have no stable source of income you will not be granted such a credit facility.
  • Despite having lower interest rates than credit cards, this kind of a plan does charge a higher rate than other traditional forms of credit because it is a high risk plan and as mentioned above, there is no security or collateral.

Keeping all of these in mind you’ll have to decide whether this loan serves your interest best or not.

Author’s Bio – Sam Payn is a loan industry writer. He regularly writes for popular online loan communities like UnitedFinances.com and others.

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18Mar

The Alternatives to Bankruptcy

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If you – like literally millions of other people today – find yourself in financial trouble, there are a number of options available to you. Amongst these options, if your debts really are insurmountable, is bankruptcy. And sometimes, declaring bankruptcy is the only realistic way out for people whose debts have reached truly hopeless levels.

But if you’re wondering “is bankruptcy right for me?” don’t be persuaded into declaring bankruptcy until you’re sure of all the facts. There are significant disadvantages to bankruptcy, which you must be fully aware of before you even consider it as a possibility.

The main alternatives to bankruptcy are Individual Voluntary Arrangements (IVAs), Debt Management Plans, Administration Orders, and Informal Arrangements.

An IVA is a formal and legally binding arrangement between a debtor and his or her creditors to pay back set amounts over a few years.  These payments are usually monthly amounts that the debtor can afford, and once all the IVA payments are done the court legally protects you against any further creditor hassle. The costs of an IVA are lower than those for a bankruptcy and you should be able to keep all interests you have in property.  There should be no fees to pay upfront and there are no statutory costs to pay.  To look into the possibility of an IVA, you will need the services of a licensed Insolvency Practitioner.  More information on this can be found in our earlier article Debt Information: What is an IVA?

Debt Management Plans are formal arrangements with creditors that are kept private – you don’t go on an official register. The most appealing thing about a debt management plan for many people is that someone else will talk to creditors on your behalf. Your representative will also negotiate one affordable monthly amount to your creditors. These payments will be based on your income, but none of your debts are actually written off. Instead, interest payments are stopped.

An Administration Order is an option if you owe less than £5,000 in total to two or more different creditors and have at least one County Court Judgment against you

Alternatively, you may be able to come to an “informal arrangement” with your creditors to repay what you owe – though it can be difficult to get everyone to agree to such an arrangement, so it’s best to seek expert advice from a reputable company.

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14Mar

How to Find Legitimate Short-Term Loan Lenders

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In recent years, the economy has come crashing down, millions are out of work, and many people are left wondering how they are going to pay their bills.

To make matters worse, traditional lenders such as banks have become much stricter on who they loan money to, which means if your financial history is less than perfect then you chances are being approved are incredibly slim.

So just what options are available to you?

Well, one avenue that you could explore is one of the many payday loan lenders operating on the internet today.

These “payday” loan companies specialise in lending small amounts of cash to people who are facing financial emergencies. Best of all, they do not run any kind of credit checks, which means you have a high chance of being approved for the loan.

You do need to be careful though, as there are some lenders out there that are not entirely legitimate. In fact, some payday lenders are basically illegal loan sharks, who will often use violence against you if you don’t pay the money back on time.

Luckily, these shady lenders are in the minority, and the vast majority of short-term lenders are legitimate and operate within the financial laws.

Here are a few tips on how to find a legitimate short-term loan lender:

Look for reviews

The internet has really taken off in the last few years, which means it is an excellent place to look for reviews and feedback. If you are considering using a certain lender, then it can be helpful to check the various financial forums and blogs for both positive and negative reviews.

Ask friends and family

A good way to find a legitimate short-term loan lender is to ask your friends and family. There should be at least one person that you know who has obtained a short-term loan before, and they will be able to advise you on who to trust.

Contact their support staff

Any short-term loan lender that is professional and trustworthy will have a team of support staff on hand to help you with any questions you may have. If there is no phone number on the website, then you should avoid applying for a loan with that company.

Read the terms and conditions

Always check the terms and conditions of the loan before applying. A legitimate company will make everything very easy to understand, while a rogue lender will look to trick you and make everything as confusing as possible.

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25Feb

Debt Information: What is an IVA?

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Many people in the UK have debt problems. Some in the form of mortgages, others credit cards. Paying back the amount borrowed can be difficult if personal circumstances change, with interest added on, it can seem like there’s no way out.

During times like this, an IVA may seem like the solution to put things right or find a way to tackle the issues. An individual voluntary arrangement is a formal agreement which is binding upon the borrower and the creditor.  Governed by the Insolvency Act of 1986, the agreement allows the individual to pay back the money owed at an affordable cost. During this time, creditors will not be able to contact the individual who will be protected from any legal action or in some cases bankruptcy. Any interest which was set out in the original agreement will also be frozen.

In order to be eligible for IVA, the individual must have debts in excess of £12,500. This amount must be between two or more creditors. A regular household income must also be shown. Those who meet the criteria and are struggling to keep up with instalments to the creditor can apply for an IVA.

After the agreement is made, monthly payments will be calculated to be paid each month. An IVA is the amount of income minus necessary living costs. This allows the individual to pay back what they can afford rather than what is being demanded by the creditor.

There are many advantages to setting up this agreement, for example in most cases the individual can be debt free within 5 years with one single monthly payment.  Individuals have a legally binding contract which is a form of protection from court orders and also, as already mentioned, interest will be frozen. Telephone calls and payment demands also stop – for those struggling with the stress of debt this provides peace of mind that is priceless.

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13Feb

An Overview of Relevant Life Legislation

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There are certain terms and conditions that regulate relevant life insurance policies and they are collectively known as relevant life legislation. This policy is a single-life, death in service benefit policy designed to cover an employee by the employer and carries a whole lot of tax benefits for the employer.

Relevant Life Legislation: An Overview

Subsection 393B (4) of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA) delineates a ‘relevant life policy’ as:

  1. An exclusive group life policy as laid down u/s 480 of the Income Tax (Trading and Other Income) Act 2005
  2. A life insurance policy, the terms and conditions of which support the insured person’s beneficiaries through benefits in the event of his/her death, and with regard to which: (i) Clause A u/s 481 of the Act would be fulfilled if paragraph (a) in that clause denotes the death, in any situation or excluding particular situations, of that person (instead of the expiry in any situation of each of the persons who are covered with the plan) and if the clause did not incorporate paragraph (b), and ii) clauses C and D under that section and clauses A and C u/s 482 of the Act are fulfilled, or
  3. A life insurance policy that will fall inside the purview of paragraph (a) or (b) only because of the reality that it offers a payout which is an exempted payout under or on account of paragraph (a), (b) or (d) of subsection (3) of section 393B of the Income Tax (Earnings and Pensions) Act 2003.

Consequently, the criteria that have to be fulfilled if a policy is to be regarded a relevant life policy in the ‘single life’ class laid down in (b) are as follows:

Clause A u/s 481 of the Income Tax (Trading and Other Income) Act 2005 (‘ITTOIA’) –  “under the terms of the policy a sum or other benefit of a capital nature is payable or arises on the death in any circumstances of [the individual] insured under the policy who dies under an age specified in the policy that does not exceed 75.”

Clause C u/s 481 – “the policy does not have, and is not capable of having, on any day:

(a)  A surrender value that exceeds the proportion of the amount of premiums paid which, on a time apportionment, is referable to the unexpired paid-up period beginning with the day, or

(b)  If there is no such period, any surrender value.”

Clause D u/s 481 – “no sums or other benefits may be paid or conferred under the policy, except as mentioned in condition A or C”.

Clause A u/s 482 of Income Tax (Trading and Other Income) Act – “any sums payable or other benefits arising under the policy must (whether directly or indirectly) be paid to or for, or conferred on, or applied at the direction of:

(a) An individual or charity beneficially entitled to them, or

(b) A trustee or other person acting in a fiduciary capacity who will secure that the sums or other benefits are paid to or for or conferred on, or applied in favour of, an individual or charity beneficially.”

Clause C u/s 482 – “a tax avoidance purpose is not the main purpose, or one of the main purposes, for which a person is at any time:

(a) The holder, or one of the holders, of the policy, or

(b) The person, or one of the persons, beneficially entitled under the policy.”

Author bio: Sam Payn is a keen blogger who has been avidly writing articles and blogs on various subjects and fields like relevant life legislation and other legislation that has had an impact on insurance products.

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11Feb

A Fine of £390 Million to RBS for LIBOR Scandal

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Bank customers or clients often choose a trusted bank where their money can be safe and their investments protected. Moreover, a bank should always be transparent with their valued customers. Mistakes can occur or even mis-calculations in the bank for it handles huge amount of money and also assets for its customers. However, it is a big problem when the money you earned from working hard would vanish just easily or worse- get corrupted by many.

There are certain departments and authorized groups  in and out of the government such as the Financial Standards Authority (FSA) who are watchful on how the banks treat their customers or in general how they run the banks according to set standards. There are already cases of mis-selling that occurred in well known banks and the customers themselves have the right to be refunded and assisted in the said matter- PPI compensation claims. More recently the scandal of mis-sold interest rate swaps for small to medium sized businesses has leaked.

The Royal Bank of Scotland(RBS) have today been given a fine amounting to £390 Million from regulators for their misconducts.  This fine was specifically for having rigged the London Interbank Offered Rate aka LIBOR (average rate of interest when borrowing from other banks).  They had furthermore assisted others in the riggings and thousands of pounds went into the pockets of the corrupt bankers involved. RBS had continued to manipulate the LIBOR rate two years on from being bailed out by the taxpayers of the UK and nationalised, and even once investigations into the LIBOR scandal had begun, all the way into late 2010.  The effects of the manipulations affected billions of pounds worth of transactions across the world.

“What happened at RBS and other banks is totally unacceptable,” commented Chancellor George Osborne regarding this, though noting that RBS is now owned by the taxpayers of this country therefore “the bankers, not the taxpayers, will pick up the bill. Those people who did wrong will face the full force of the law.”

Among rising banking scandals, Osborne added that in 2013, “our reforms are turning people’s anger into a positive force for change.”

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31Jan

Barclays : Most Complained About Bank

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If you have your credit or debit card with you, you already know the convenience of using it. Often times most of the average consumers nowadays own a card that would allow them to make purchases online and probably enjoy the rebates and rewards the card is offering. It would always depend on a particular card holder on how he or she handles the numerous available purchases that merchants provide.

Many of us would resort to having a credit or debit card instead of the usual cash on hand when we need to buy or make transactions online. Online buying has already been a trend. Online bidding sites like Ebay allow anyone to buy and sell their stuffs and when you’ve got a credit card, you could easily buy an item.Different credit cards have this certain feature that it could be universally accepted anywhere you are in the world. Making certain transaction from other countries is possible.

On a negative note, if the online business is growing, there is a tendency that online fraud would also take place. To date, there are already many victims of fraud, cardholders from the bank Barclays who owned a Barclaycard were some of the few victims of fraud. Most of the consumers could have overlooked the legality of a particular merchant. To add up to the problem, the victims of fraud would have to wait for a longer time for their money to be back.

According to a finance article published on Yahoo, the figures have shown that the customers of the bank Barclays are in their quest to wait for the charges that are found to be fraudulent to be back in their accounts. Customers would wait for a month long so that they can get their money back even if in the very beginning it is the obligation of Barclays to refund the charges promptly. A survey has already labeled Barclays as the most complained about and worst bank in terms of refunding fraud charges to their clients.

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13Jan

NOKIA Faces Bigtime Tax Issue

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Nokia’s Chennai factory, one of Nokia’s biggest facilities, was raided by Indian Tax officials who are seeking to recover tax payments totalling as much as £340m. This incident happened just days after UK’s Vodafone was asked to pay back more than $2bn in back taxes.

According to Nokia, they never fail to observe proper laws and rulings in any parts of the world they operate. That is, they are in full cooperation with the Tax officials to ensure that all of their issues get sorted and all of  their enquiries will be fully taken care of.

As a result of the raid in India, the shares of Nokia fell considerably to more than 6% to 3.07 euros in Helsinki. As expected, the incident greatly affected the performance of Nokia in the market.

Nokia’s Chennai factory in India plays a very important role in making Nokia the world’s number one in phone manufacturing. India is known to be the fast growing phone market in the world and is considered as the key to Nokia’s success.

Source: http://www.bbc.co.uk/news/business-20954837

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