Payday Loans: 'Majority Miss Payments'

A consumer group has demanded regulators crack down hard on payday loan firms amid research suggesting 57% of customers have incurred stiff penalty charges for missing payments.

Which? claims 29% of people who go to payday loan firms - which can apply annual interest rates of more than 4,000% - do so in the knowledge they have no chance of paying back what they owe within the timescale of the loan deal.

The industry is designed to offer short-term loans to people to cover bills until pay day - with the interest rate climbing steeply if the terms are breached.

It has led to revelations that some borrowers have ended up owing thousands after taking out loans for just a few hundred pounds.

According to Which?, 20% of people who took part in its survey complained of being hit by unexpected charges.

An increasing number were using payday loans to cover essentials such as food as the squeeze on household budgets continued to be felt, the group said.

Its Executive Director Richard Lloyd said: "It's shocking that half of all people taking out payday loans have been unable to pay the money back and it's a depressing sign of the times that almost a third were hassled by debt collectors in the past year.

"Payday loans are leaving many people caught in a spiral of debt and taking out more loans just to get by.

"That's when they're hit by excessive penalty charges and roll over fees.

"The Office of Fair Trading must do more to clamp down on irresponsible lending by introducing tighter rules for payday lenders.

"Better affordability assessments and clearer charges would be the first steps to clean up the industry and better protect consumers."

The industry has defended itself by insisting customer satisfaction levels are high and they are offering a financial lifeline to people at a time when mainstream banks are largely ignoring the needs of their customers.

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Collapsed Comet Launches "Massive" Sale

Electronics retailer Comet has announced a "massive stock liquidation" ahead of store closures as early as next week.

The sale, which began at 9am on Thursday, is only available in its 236 stores, with customers unable to buy products online. 

The electrical chain said gift vouchers will be accepted on sale items, following the temporary suspension of the tokens over the weekend. 

But it warned customers it will not offer refunds, and any items ordered before the company went into administration that have not been paid for will not be delivered. 

Comet's administrators, Deloitte, are in the process of winding down the business following its collapse on Friday, which leaves 6,600 jobs hanging in the balance.

But rival Dixons - which owns Currys and PC World - postponed hiring 3,000 Christmas staff by a week to allow Comet staff to apply.

It said it was "amazed" by the number of Comet employees that had enquired about positions so far.

Deloitte has been attempting to find a buyer for the business, but reports suggest stores could start to be closed next week.

If the chain does collapse, it will become one of the biggest high street casualties since Woolworths in 2008.

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Banks In Secret PPI Lobbying Push

By Mark Kleinman, City Editor

Britain's banks have embarked on a secret lobbying drive to curtail the soaring cost of the payment protection insurance (PPI) mis-selling scandal.

The effort to limit the industry's bill comes as the tab for the four biggest high street banks (Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland) last week passed £10bn following a rush of new claims submitted in the third quarter of the year.

The British Bankers' Association (BBA) is now in talks with the City regulator to urge it to declare that the point at which consumer awareness of PPI mis-selling is widely-known has now legally been reached.

Under existing rules, customers have six years from the date on which they were sold a PPI policy to complain that it was mis-sold; however, they are also allowed to submit a claim three years after the point at which they say they became aware they were mis-sold to, even if that date is after the end of the six-year period.

The BBA is now arguing that because publicity about PPI mis-selling has been so widespread in the media and an advertising blitz orchestrated by claims management companies (CMCs), the Financial Services Authority (FSA) should now declare that the 'point of knowledge' has been passed.

Until such a declaration arrives from the FSA or the Financial Ombudsman Service (FOS), banks argue that they may face many more years of compensation claims worth billions of pounds.

Senior bankers are now also lobbying the Government that the escalating bill for PPI and other misconduct-related compensation risks stunting the economic recovery by restricting the amount of new lending available on banks' balance sheets. Bankers believe that securing such a ruling is also crucial to their planning for capital distributions such as bonuses and dividends during the next year.

In a statement issued to Sky News, the BBA said it was "working with our members on a number of aspects of PPI complaints. The ongoing work focuses on three issues as a priority: addressing backlogs, making sure that customers can be confident that the offers they receive are right, and highlighting that there is no need for them to engage a claims management company.

"As part of this work, we are involved in ongoing discussions with the FSA to clarify the parameters of their complaints handling guidance."

People close to the discussions confirmed that the discussions with the regulator referred to the three-year point of knowledge.

Last week, the bosses of banks including Lloyds, which has set aside more than £5.5bn for PPI compensation, said they were unlikely to have more clarity on their aggregate exposure for some time. Antonio Horta-Osorio, Lloyds chief executive, said he had written to the FOS to urge the bill for thousands of bogus PPI claims to be handed to claims firms to pay.

The FSA reiterated the existing timetable but declined to comment further. Sources close to the regulator pointed out that there remained a "grey area" into which proving that every PPI customer was aware that they were sold an inappropriate policy still fell.

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Pay Gap In Reverse As Women Work 'For Free'

The gender pay gap is so large at almost 15% that women will effectively work the rest of the year for free, it is claimed.

A study by the campaign group Fawcett Society suggests that, rather than improving, the pay and jobs prospects of women are going into reverse amid the Government's austerity measures.

Chief executive Ceri Goddard said: "At the same time, women's unemployment stands at a 24-year high and growing numbers of women have been forced into low paid, part-time and insecure employment - underemployment.

"Far from slowly moving forward, we now face going into reverse. If Government wants to avoid an unprecedented backwards step on its watch, they must take more action."

The conclusions were released as separate research for the Chartered Management Institute (CMI) found the average female company executive earns more than £400,000 less than a male counterpart over her career.

According to the institute, the average gender pay gap for UK executives is more than £10,000 annually.

It also claimed that women receive less than half the bonus payments given to men and 4.3% of female executives were made redundant in the past year, 1.1 percentage points more than male bosses.

It found that, while women now make up 57% of company executives, only 40% are departmental heads and fewer than one in four are chief executives.

The survey of more than 38,000 executives revealed a "substantial" gender pay gap at the higher end of the executive career ladder, the institute said.

"A lot of businesses have been focused on getting more women on boards but we've still got a lot to do on equal pay and equal representation in top executive roles," said CMI chief executive Ann Francke.

"Women make up almost three out of four at the bottom of the ladder but only one out of four at the top."

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London Bus & Tube Fares To Rise Above Inflation

Tube and bus fares are to rise above the rate of inflation in London in the new year, to the fury of union and passenger groups.

The capital's mayor, Boris Johnson, announced a 4.2% average increase from January 2 2013 - and said the figure would have been higher had he not managed to secure additional funding of £96m.

The rise is 1% above the rate of RPI inflation when it was measured in July and used as a benchmark for the planned increase and matches the average rises facing national main line season ticketholders.

The mayor also confirmed that charges for his "Boris bike" Barclays Cycle Hire scheme would double.

Such a move would see daily hire going up from £1 to £2, weekly access rising from £5 to £10 and yearly membership going up from £45 to £90.

The bike project has suffered financially as the majority of trips are made within the free 30-minute usage charge period but it was confirmed there would be no additional penalties for late return, non-return and bicycle damage.

Mr Johnson said today: "Before the end of the year I will spell out further investment on the transport network that will help us to provide faster, more frequent and reliable journeys for Londoners, which is crucial to the economic development and growth that is so vital to our great city.

"This fares package is hugely important to our millions of passengers and I am very pleased to have secured nearly £100m that will help to keep fares as low as possible, and protect the important concessions that we offer the most vulnerable Londoners."

But Bob Crow, general secretary of the RMT transport union, said the mayor should have announced a fare freeze.

He explained: "This increase shows that we are still paying off a heavy price for the expensive failure of the PPP (public private partnership) privatisation disaster.

"It also means that the mayor has no excuse for cutting staff and closing ticket offices as he's lumping on above-inflation fare rises.

"We believe there should be a policy of freezing fares to recognise the tough times people are facing, to increase the use of public transport and to help boost the economy."

His words were backed by Richard Hebditch, campaigns director at Campaign for Better Transport.

He said: "Earlier this week, Boris Johnson rightly received plaudits for his support for a living wage in the capital. His position on public transport is in stark contrast.

"By putting fares up above inflation, he is hitting hard-pressed families in the pocket simply for travelling to work."

More follows...

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Dixons 'To Hire Comet Staff This Christmas'

Dixons has postponed hiring temporary staff for over the festive period, to enable those employed by embattled rival Comet to apply.

Comet went into administration last week, raising questions about the future of its 6,000 jobs across 236 stores.

As such, Dixons Retail - which owns Currys and PC World - delayed for a week the process of hiring around 3,000 Christmas staff.

It has now posted a job advertisement for temporary sale advisors on its website.

Successful applicants will be required to "provide great customer service" and help customers "find the right products for them".

The chain said it had already had over 500 enquiries - both in store and online - about the positions from Comet staff.

"We have been amazed by how many Comet employees have already come to talk to us," Dixon's chief executive Sebastian James said.

A company spokesman added: "Clearly this is going to be a difficult Christmas for them and their families - we'd like to offer some hope."

Dixons said it hopes "a good number" of the jobs will become permanent positions in the long-run.

Comet's collapse comes a month after fellow high street stalwart JJB Sports closed down, resulting in 2,200 job losses.

If Deloitte fails to find a buyer for Comet, it will become one of the biggest retail casualties since Woolworths in 2008.

The chain was bought by investment firm OpCapita in February for a nominal £2.

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UK Economy: 1,500 New Jobs Delivered By DPD

The growth of online retail has prompted another major delivery company to confirm a big investment, which will create 1,500 new UK jobs.

DPD is to spend £175m over the next few years - with the bulk of the money going on a new parcel sorting hub in the East Midlands.

The location for the sorting hub, which will be the company's fourth, has yet to be decided but DPD is looking at sites near Rugby and Leicester.

Ten new depots are also planned over the next 15 months as the firm looks to meet growing demand for its service from online retailers.

The business, which is based in Smethwick in the West Midlands and is a subsidiary of French-owned La Poste, said it had clinched £70m of new business as a result of its Predict service, which uses GPS technology to provide customers with a one-hour delivery window.

DPD chief executive Dwain McDonald said: "The online retail market is expanding rapidly with consumers now prepared to buy a much wider range of goods online."

The announcement follows a similar move by Royal Mail, which said last month it would create some 1,000 jobs over four years as part of a £75m investment in its express parcels business.

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Marks And Spencer Reports Fall In Profit

Marks and Spencer has reported a fall in underlying pre-tax profit to £297m for the first half of this year.

The chain blamed pressure on consumers' disposable incomes and volatile trading conditions - hit by bad weather - for the figure, which compares with £307m profit over the same period last year.  

But sales across the 128-year-old group were up 0.9% at £4.7bn driven by strong performance in its food division and internationally.

In its UK stores, however, sales were flat in the second quarter, with a 1.6% rise in food partially offsetting a 1.8% fall in general merchandise sales. 

It follows a 6.8% slump in general merchandise sales in the first quarter as a result of the wet summer weather and problems with stock availability, which left stores short of bestselling womenswear lines.

The group's chief executive, Marc Bolland, told Sky News: "We have repaired our womenswear position strongly over the second quarter.

"The issues we had were with merchandising and stock, we're now bucking the trends."

He added: "The first quarter was a difficult quarter as we explained three months ago, the second quarter has improved quite strongly."

Marks and Spencer, which has 730 stores in the UK and 390 overseas, said it was "well set up" for its busiest time of the year.

"As we approach the all-important Christmas period, we have better than ever Christmas products, to help our customers enjoy a special Christmas at home," Mr Bolland said.

Primark has been one of the high street's best performing stores

Eighteen months ago, Marks and Spencer launched a plan to transform itself into an "international multi-channel retailer" by boosting its website and making it easier to buy products on smartphones and tablets. 

Mr Bolland said this strategy was making "strong progress", with growth across its multi-channel business.

Retail analysts Conlumino described the results as a "mixed bag".

"While the overall half year numbers look anaemic, there has been a material uplift in fortunes since the first quarter," managing director Neil Saunders said, adding that it is too early to say whether the group is on the path to sustainable growth.

"M&S has still underperformed the market in fashion and growth in general merchandise remains elusive on a like-for-like basis.

"All of this points to the fact that M&S still has plenty of issues to resolve and there is still much work to be done."

The results came as Associated British Foods revealed that revenue across its 230 Primark stores had grown by 17%.

The clothes retailer has been one of the best performing stores on the high streets in the UK, Ireland and Spain because of its low prices and quick adoption of fashion trends.

The group, which also includes Twinings, Silver Spoon and Ryvita among other brands, reported a 17% rise in full-year profit.

Following "exceptional performance", the company said its adjusted pre-tax profit was £974m and revenue was up 11% to £12.3bn.

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BRC: Retail Sales 'Fall' Before Christmas Rush

Retail sales have grown at their slowest pace for almost a year as shoppers stick to buying only essential items, according to new research.

Like-for-like sales were down 0.1% in October, compared with the same period last year, a study by the British Retail Consortium (BRC) and professional services group KPMG showed.

Meanwhile, total sales were up 1.1%, against a 1.5% rise the year before - the slowest growth in total sales, excluding Easter, since November 2011.

It follows a surprise hike in September when like-for-like sales were up 1.5% and total sales were up 3.4%, which the BRC's director general described a "something of a false dawn".

"October's poor performance wasn't a one off," Stephen Robertson said.

"Year-to-date average growth hasn't outpaced inflation meaning overall sales volumes going backwards."

October's online sales were especially poor, he said, adding that the last three months include the two weakest growth rates recorded in four years.

"Falling consumer confidence means people are limiting spending to essential items and are cautious about committing to big-ticket and discretionary buying," he said.

"This underwhelming showing means there's all to play for as Christmas approaches."

KPMG's head of retail, David McCorquodale, said that although official figures last month showed the UK was out of recession, consumer confidence has not yet bounced back.

"Retailers are holding less stock than a year ago and may choose to be cautious with pre-Christmas sales in order to protect margins," he added

"However, the disappointing sales figures for October indicate that winning share of the Christmas wallet will be just as competitive over the next two months as it was last year."

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RBS Confirms £1.2bn Loss After PPI Hit

RBS has confirmed it made a loss before tax of £1.2bn in the third quarter, compared with a profit of £2bn for the same period last year.

As revealed by Sky's City Editor, the bank has set aside a further £400m for the mis-selling of payment protection insurance, meaning the scandal has cost it £1.7bn to date.

This provision took the total compensation bill for Britain's four largest lenders past the £10bn mark.

The 82% taxpayer-owned bank also said it had taken a further hit of £50m to cover costs relating to the summer's massive IT failure - which saw many RBS, NatWest and Ulster Bank customers locked out of their accounts.

It takes its bill for the meltdown to £175m.

The bank also expects to face "material fines" in relation to how Libor and other interest rates were set, it added.

RBS is under investigation by US and UK authorities over the rate-rigging scandal and is expected to be one of the next banks to settle after Barclays was fined £290m in June.

"The group expects to enter into negotiations to settle some of these investigations in the near term and believes the probable outcome is that it will incur financial penalties," RBS said.

It added that it had dismissed "a number of employees for misconduct" after investigations into rate setting.

But the group's core banking operations - if the mis-selling and IT charges are stripped out - performed well, with operating profit for the three months reaching £1bn.

A decline in charges on bad debt helped boost performance at the bank, which said its restructuring would be complete in the next 18 months.

As part of this plan, the number of employees was down by 9,900 from a year earlier, resulting in a 5% fall in staff costs compared to the previous quarter.

The bank described the collapse of the sale of 316 branches to Santander as "disappointing".

As a condition of RBS' state bailout, the European Union ordered it to offload the branches by the end of next year. RBS said it did not expect this to change and so had restarted efforts to sell them.

The group's chief executive, Stephen Hester, said it now needed to focus on improving its reputation.

"The extraordinary challenges which RBS faced following the financial crisis are being worked through successfully," he said in a statement.

"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."

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