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Inside vom 31.03.2012

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Banks braced for exposure to CPP mis-selling investigation
 
ugg boots sale uk genuine Britain's high-street banks, already reeling from the cost of the payment protection insurance scandal, could be forced to pay out hundreds of millions of pounds more to compensate customers for a widely mis-sold card protection product. The banks are in discussion with the Financial Services Authority about the way to reimburse customers after the watchdog announced it had hit identity theft and credit card insurance company CPP for £33.4m in fines and compensation to customers for what the regulator described as a "serious offence". Of the £33.4m, CPP expects £14.5m to be paid to customers mis-sold its card protection and identity protection products between January 2005 and March 2011. However, this only covers direct sales made by CPP; the vast majority of sales were made via high street banks including Santander and HSBC. A number of the banks "introduced" their customers to CPP by affixing a sticker to new credit or debit cards sent to customers. The sticker prompted the customer to call a number, which was CPP's, either to activate the card or to confirm receipt of it. When the customer did ring, CPP also used the opportunity to offer card protection and/or identity theft protection to the customer. CPP, which has suffered a collapse in its share price since its flotation at 235p in 2010, will pay the £10.5m fine in instalments. The fine is a joint record for a retail-related offence, on a par with the one slapped on HSBC last December for misselling investments to eldery customers. Paul Stobart, the new CPP chief executive, said: "We are deeply sorry for the errors and wrongdoings of the past and are paying a heavy penalty through what is a large fine. "Today marks the end of the long-running investigation into historic practices at CPP in the UK." The shares closed last night at 25.25p.
 
Cheap ugg boots online The CPP card protection product would offer to cancel all a cardholder's cards if they went missing or were stolen. It also offered key cover and an emergency cash advance. But the element of the product the FSA objected to was the £100,000 of card protection – this was not needed because customers are already covered by their banks in almost all cases if their cards are stolen. The FSA also said identity protection was mis-sold because CPP overstated the risks and consequences of identity theft during sales of the product. The card insurance cost £35 a year while the identity theft cover was sold for £84. "While CPP's products were relatively inexpensive, they were sold widely and CPP encouraged its sales agents to be overly persistent," Tracey McDermott, the FSA's director of enforcement and financial crime said. "This exposed a very large number of customers to the unacceptable risk of buying products they did not want or need." CPP will be writing to customers it believes have been affected, but not until discussions between itself, the FSA and the banks have concluded. A special fund is expected to be created for this purpose. Customers are being urged to contact CPP or their bank to claim. Customers can only claim for policies taken out between January 2005 when the FSA started regulating general insurance, and March 2011 when the FSA first started dealing with CPP over the issue. During this period CPP sold 4.4m card protection and identity protection policies and received £188.3m in customer payments, a proportion of which it paid to the banks for an introduction fee.
 
Ugg Boots Online Shop CPP also renewed 18.7m policies for which it received £656.5m in customer payments, a proportion of which it again paid to the banks for an introduction fee. Santander has already taken an unspecified provision to cover CPP, included in a charge of £232m in its third quarter results. Santander said it still uses CPP for its card activation process but no longer sells the company's insurance products. It said when it did sell the insurance via card activation it was made clear to the caller that the company the customer was dealing with was CPP, not Santander. HSBC said it did not use the card activation process to sell CPP's products, but confirmed it did sell the company's card protection product to customers. It is believed Barclays sold the insurance via its card activation process and that the caller thought they were buying from Barclays not CPP. Neither Lloyds TSB or Halifax had a relationship with CPP. Bank of Scotland did many years ago – currently, about 19,000 customers on older products have CPP cover. However, all of these products were sold prior to 2003. The Guardian is still awaiting comment from Barclays and RBS. One industry source suggested claims management companies that have made millions from dealing with people's PPI claims could "be all over CPP claims" in the near future. The CPP website still lists the company's card protection policy but anyone clicking on the "buy now" button is taken to a message reading: "Unfortunately this product is no longer available." The company is no longer selling identity protection but is selling a product called identity theft, which is similar but does not contain the insurance element of the previous product.
 
Ugg Boots Sale Online The £66bn of taxpayer funds used to buy shares in Royal Bank of Scotland and Lloyds Banking Group at the height of the financial crisis may never be recovered, a powerful group of MPs warned on Friday. As the public accounts committee criticised the way the Treasury handled the nationalisation of Northern Rock, it also called on the government to ensure taxpayers got value for money from the future sale of stakes in the bailed out banks. The committee urged the government to keep its role as shareholder separate from "wider policy objectives" amid calls from some politicians for RBS to be turned into a small business lending bank. Stakes in bailed out banks are managed at arm's length by UK Financial Investments. The committee wants UKFI to publish updates on the costs associated with Northern Rock. The bank was split into Northern Rock plc, which resumed lending and was sold to Virgin Money at the start of this year, and Northern Rock Asset Management, the "bad bank", which remains in public hands. The committee had been investigating the National Audit Office report published in May which warned that taxpayers faced losses of at least £2bn on the continued ownership of the so-called bad bank. With only two bidders for Northern Rock and only one that was really keen to buy – Virgin Money – the committee said this did not bode well for any attempts to sell off RBS, of which taxpayers own just over 80%, and Lloyds, in which taxpayers own just under 40%. At current share prices taxpayers are losing around half of the £66bn investment.
 
Uggs For Sale UK "The lack of competition does not fill us with confidence that the taxpayer will make a profit on the sale of the two banks which remain in public ownership, RBS and Lloyds. There is a risk that the £66bn invested in RBS and Lloyds may never be recovered. It is vital that the final decisions on the wholly owned banks are made with value to the taxpayer taking precedence over speed of exit," said Margaret Hodge, the MP who chairs the committee. The report said: "We are not convinced that the taxpayer would be making a profit on these banks any time soon." The NAO reported that the sale of Northern Rock was handled well by UK Financial Investments – which looks after the taxpayer stakes in the bailed out banks – but still lost the taxpayer an estimated £469m. "There was little competition to buy Northern Rock. UKFI was fortunate that Virgin Money had a strategic interest in immediately purchasing a small retail banking operation in 2011." Hodge noted that when Northern Rock was split in 2009 and the "good bank" given a mandate to start lending it failed to achieve its goal. "Splitting the bank was supposed to generate lending, but the new bank lent only £9.1bn against a target of £15bn," Hodge said. The committee concluded the Treasury was "part of a monumental collective failure to understand that the pre-crisis boom could lead to a banking crisis". Treasury officials have admitted Northern Rock should have been nationalised more quickly rather than in February 2008, five months after the run on the lender which sparked anxiety across the financial sector and the first run on a bank since the 1866 run on Overend & Gurney. Hodge called on the Treasury to update the committee on its review into dealing with financial crisis – known as the White review – after finding that it "did not have sufficient capacity or the skills to understand and respond to the crisis when it began". She said: "This will not be the last banking crisis, and the next one is likely to be different. The Treasury must ensure it retains the right staff with the right skills to understand the risks and respond effectively."
 
Buy Ugg Boots Online The eurozone has double-dipped back into its second recession in three years, official figures confirmed yesterday – and analysts warned economic pain across the single currency will continue well into 2013. Output across the 17-member bloc fell by 0.1 per cent over the third quarter of 2012, following a 0.2 per cent decline in the second quarter, according to Eurostat. The picture across the Continent was uneven with France and Germany both eking out 0.2 per cent growth between July and September, while The Netherlands and Austria showed declines. Meanwhile, the crisis-hit states of Spain, Italy and Portugal, which have been in recession all year, shrank once again. Protesters in all three countries took part in anti-austerity demonstrations on Wednesday. Economists predict weakness among the currency bloc's southern states to drag Germany and France into recession too in the coming months, with most expecting Europe's dominant economy to register negative growth in the fourth quarter of the year. The European Commission has forecast that the bloc will shrink by 0.4 per cent over the course of 2012 and expand just 0.1 per cent in 2013. The slowdown is making it more difficult for eurozone member states to hit their targets under the Fiscal Compact, which compels them to bring deficits down to 3 per cent of GDP. The European Commission, which polices the Compact, showed some signs of flexibility on deficit reduction this week when the EU economic commissioner, Olli Rehn, said that Spain would not be required to make more cuts this year to compensate for being thrown off course by recession. But he added that Brussels would "look at every country case by case". Paul De Grauwe of the London School of Economics said that the latest downturn had been brought on by the drastic spending cuts already enacted in southern Europe. "We are getting into a double-dip recession which is entirely self-made," he said. "It is a result of excessive austerity in southern countries and unwillingness in the north to do anything else." Steen Jakobsen, the chief economist at Saxo Bank, agreed, saying: "This was totally expected because of austerity policies combined with world growth slowing down and a fall in activity in Germany and the Netherlands." Separate figures this week showed the Greek economy shrank at an annual rate of 7.2 per cent in the third quarter, up from 6.3 per cent in the previous three months. The International Monetary Fund yesterday reiterated its call for the European Central Bank and the European Union to write off more of the country's debt. "The IMF has done what it needs to do in the context of its framework," the fund's spokesman William Murraysaid. "Clearly there has to be other actions taken to reach debt sustainability." Athens' public debt is expected to hit 190 per cent of GDP next year. Greece is facing a sixth-successive year of contraction in 2013. There was, however, a flicker of good news for Ireland yesterday as the Fitch credit rating agency upgraded its outlook for the country's BBB sovereign bonds, citing its success in cutting the deficit and return to capital markets.

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