Greece's credit downgrade and the consequent threat to the eurozone illustrate the dangers of being locked into a fiscal cage
This week European stock markets slumped by up to 6% when the Fitch credit rating agency downgraded Greece's creditworthiness to a 10-year low. With national debt approximating 125% of national output, the country's dramatic fiscal imbalance undermines the stability and unity of the eurozone.
Being part of the euro deprives Greece of the capacity to devalue its currency or to inflate its debt. If Athens deflates and adopts a draconian fiscal contraction, social unrest looms on a far greater scale than this week's street riots on the first anniversary of a police shooting that killed a student. If, on the other hand, Greece were to default on its debts, it might be forced to abandon its membership of the eurozone. The ensuing crisis could engulf Italy and other member countries, threatening to bring down the entire edifice and dealing a massive blow to Europe's global economic credibility.
Unfortunately, the eurozone's dogmatic commitment to monetarism exacerbates the economic predicament of its members. Monetarism stipulates the pursuit of price stability by focusing exclusively on monetary policy instruments such as interest rates to control the money supply. In the case of the euro, the monetarist stance of the European Central Bank (ECB) is reinforced by an exceptionally tight fiscal policy regime with strict, legally binding limits on the level of national budget deficits and public debt.
Taken together, the eurozone's monetary and fiscal policy mix amounts to an economic straightjacket. Since Europe's currency union is based on national fiscal restraint and low inflation rather than high growth, it has an inbuilt contractionary bias which risks interrupting the nascent recovery before it has properly taken off.
As the government acts on Alisdair Darling's pre-budget report, it should think twice before passing a bill with legal obligations to reduce public debt and budget deficit. In the foreseeable future of stagnation or low growth, that could plunge the country back into recession and in a vicious circle of debt-deflation, with potentially disastrous consequences for growth, employment and social cohesion. Like the eurozone, Britain must ditch monetarism – a core tenet of the neoliberal orthodoxy which the current crisis has utterly discredited.
Defenders of monetarism contend that price stability is a precondition for investment, and that after a global credit crunch the only way to generate growth in the real economy is by expanding the money supply. They point to the success of massive liquidity injection through the central bank policy of quantitative easing, implemented by both the ECB and the Bank of England.
The trouble is that central banks across Europe are already planning to withdraw quantitative easing – even before lending to businesses and households has properly resumed. In fact, the continuing crisis highlights the growing disconnect between global finance and the real economy, with banks and financial institutions using taxpayers' money to engage in frenzied short-term speculation rather than supporting productive, income-generating activities through longer term investment. That's why we are seeing a return to a bubble economy of boom and bust, rather than a more stable business cycle.
Crucially, the slow recovery shows that growth depends in large part on aggregate demand (basically total investment and consumption), and not on the money supply. That was John Maynard Keynes's ground-breaking argument after the Depression of 1929-33.
The problem with monetarist limits on fiscal policy is that they lack any genuine economic rationale. They are largely intended to reassure the world economy that global finance won't have to compete with public authorities on international money markets. As such, monetarism locks governments into a fiscal cage in order to promote the free movement of worldwide capital. But in the current situation, with massive output gaps, public spending won't crowd out private investment. Expenditure on shovel-ready infrastructure projects or spending vouchers for low-income groups helps restore confidence and boost the economy through the multiplier effect – demand begets demand.
As the eurozone emerges from the worst European recession for more than 70 years, it must envisage fundamental reform.
First, there must be a revision of the ECB's constitution to include growth as a policy objective on the same level as price stability. Here Europe can learn from the US Federal Reserve's more pragmatic and proactive stance.
Second, there should be a fiscal co-insurance scheme for countries to provide temporary relief to fellow members in the event of a crisis when the economy is shrinking and debt level are soaring. If governments can use taxpayers' money to bail out the banks that got us into the current mess, they should be allowed to come to the rescue of other countries in dire straits.
Third, by increasing the funds and the remit of the European Investment Bank, the EU as a whole can foster a new economic culture of long-term investment in infrastructure, research and research and development which is the surest way of generating sustained growth and reducing fiscal imbalances.
Instead of fuelling the deficit-cum-debt hysteria, responsible politicians and policymakers must eschew monetarism in favour of a proper high-investment, high-growth strategy. The future of the eurozone – and of the UK economy – depends on it.
Friday 11 December 2009
Credit Card Fraud Common – With Fraud Often Peaking Around Christmas
According to new figures almost one-third of consumers have been a victim of fraud after losing or having their credit card stolen. The average amount fraudulently take is £623, according to card protection service CPP, which emphasizes the importance of credit card security.
According to the report, credit card fraud tends to peak around the Christmas holiday period, meaning consumers should specifically be on their guard during the month of December.
Card fraud expert at CPP, Sarah Blaney warned consumers to be vigilant. “If you are only going to use maybe one or two cards to buy your presents with then that’s all you need to take with you. Don’t carry your card in your pocket. Make sure it is safely tucked away in your purse or wallet.” Ms. Blaney also advised shoppers to check all of their receipts against bank statements to make sure that no money has been stolen.
The UK’s Fraud Prevention Service, CIFAS, recently reported that 68,000 people had become victims of credit card impersonation during the first ten months of 2009.
According to the report, credit card fraud tends to peak around the Christmas holiday period, meaning consumers should specifically be on their guard during the month of December.
Card fraud expert at CPP, Sarah Blaney warned consumers to be vigilant. “If you are only going to use maybe one or two cards to buy your presents with then that’s all you need to take with you. Don’t carry your card in your pocket. Make sure it is safely tucked away in your purse or wallet.” Ms. Blaney also advised shoppers to check all of their receipts against bank statements to make sure that no money has been stolen.
The UK’s Fraud Prevention Service, CIFAS, recently reported that 68,000 people had become victims of credit card impersonation during the first ten months of 2009.
New credit card aims to help you treat yourself
Savvy shoppers look out. A new credit card from American Express will reward you with gift vouchers simply for shopping as normal.
The way the new Express Rewards Credit Card works is simple. Use your card at the places you always shop, from supermarkets to department stores and without thinking you will collect points as you spend. Then the fun begins as you turn your points into gift vouchers to use at some of your favourite high street and online stores including House of Fraser, M&S, Net-A-Porter, Molton Brown, Boots, Waterstone's, iTunes and HMV. The voucher choice is all yours so you can treat yourself, your family or a friend to something fabulous completely guilt-free.
Created in response to the current spending zeitgeist, the card capitalises on the UK's voucher phenomenon. We've also been holding back on treats: 64% of us have cut back on little rewards and this card is perfectly designed to bring back the treats we love and deserve.
Katrina Cliffe, Head of Consumer Cards at American Express explains: ‘This is the perfect card for today's savvy shoppers who want to be rewarded for their spending. What really sets this card apart is that vouchers are available for a wide range of high street and online shops, not just one store, so the treating opportunities are endless.
We've also rewarded shoppers with triple bonus points at all major supermarkets and double bonus points at key department stores as we know this is where shoppers are spending the most.'
Claudia Winkleman, ambassador for the new card, explains: ‘I earn points on things I have to buy and transform them into things I want to buy. It's win-win and actually perfect because it's not complicated. I collect points by using my card for things like petrol and the weekly supermarket shop. Then I transfer my points into vouchers every couple of months so I can treat myself and my family to lovely things like scented candles and cup cake holders. Basically, the card's a no brainer and everyone I know wants one.'
The way the new Express Rewards Credit Card works is simple. Use your card at the places you always shop, from supermarkets to department stores and without thinking you will collect points as you spend. Then the fun begins as you turn your points into gift vouchers to use at some of your favourite high street and online stores including House of Fraser, M&S, Net-A-Porter, Molton Brown, Boots, Waterstone's, iTunes and HMV. The voucher choice is all yours so you can treat yourself, your family or a friend to something fabulous completely guilt-free.
Created in response to the current spending zeitgeist, the card capitalises on the UK's voucher phenomenon. We've also been holding back on treats: 64% of us have cut back on little rewards and this card is perfectly designed to bring back the treats we love and deserve.
Katrina Cliffe, Head of Consumer Cards at American Express explains: ‘This is the perfect card for today's savvy shoppers who want to be rewarded for their spending. What really sets this card apart is that vouchers are available for a wide range of high street and online shops, not just one store, so the treating opportunities are endless.
We've also rewarded shoppers with triple bonus points at all major supermarkets and double bonus points at key department stores as we know this is where shoppers are spending the most.'
Claudia Winkleman, ambassador for the new card, explains: ‘I earn points on things I have to buy and transform them into things I want to buy. It's win-win and actually perfect because it's not complicated. I collect points by using my card for things like petrol and the weekly supermarket shop. Then I transfer my points into vouchers every couple of months so I can treat myself and my family to lovely things like scented candles and cup cake holders. Basically, the card's a no brainer and everyone I know wants one.'
Ask Gill: one year wait for 'lost' invoice
There's no excuse for slack customer relations, says Gill Charlton, who also advises on New York walking tours; travelling by cargo ship and insuring empty homes.
Wait for 'lost' invoice
Paul Collins from Long Ashton, Somerset writes
I hired a Nissan Micra from Europcar at Madrid airport in October 2008 after booking online. When I dropped the car off the rep pointed out some slight scratches on the front and rear bumpers and a stone hole in a side light.
Although I had no knowledge of how these happened, I accepted liability. In mid-November I received my credit-card statement and saw that two almost identical charges had been made by Europcar of £155.48 and £155.14, put through on the same day.
I received no invoice in the post for the damage, though I needed one to make a claim on the rental damage excess policy I had taken out with Insurance4carhire.
I emailed Europcar to request this on November 21 and received a fairly prompt reply with some meaningless figures that did not even add up to the amount charged to my card.
Since then I have emailed Europcar's UK customer relations office to no avail and telephoned only to be cut off. It is now one year later and I still have no invoice to present to the insurer.
Gill Charlton replies
Several readers have been in touch to say that they are having trouble getting information about deductions for damage from Europcar franchises in both France and Spain. But to take a year to send an invoice seems very lax. It turns out that a perfectly serviceable and correct invoice was issued by Europcar Madrid on October 17 last year. It was sent to your home address and presumably got lost in the post.
Europcar UK said it was very concerned to learn that nobody in its British office had tried to resolve your query. I hope that something will be done to improve the company's customer service because following my inquiry Mr Collins received another illiterate email that once again failed to address his problem. In the end, I sent him a copy of the damage invoice that Europcar had sent to me.
The company says that an invoice detailing the damage surcharge is always sent to the customer's home address. This comes direct from the local rental agent.
The company says that customers can request sight of repair documents confirming the amount of the damage, but readers report difficulty in getting their hands on them.
New York walking tours
Robert and Jill Mason, Leicester
My wife and I will be in New York for the first time in February, staying for a week.
I know it's fairly safe to walk around Manhattan during the day, but we feel we might be happier on a guided walking tour.
Gill Charlton replies
The website www.nycgo.com is a good tool for planning your visit and lists quite a few walking tour operators.
A long-established company is Big Onion (001 212 439 1090; www.bigonion.com ), which runs daily public tours to different neighbourhoods, including a "multi-ethnic eating tour" for food lovers. Most walks don't need to be booked; you just turn up and pay $15 (£9).
Lina Viviano, a registered NYC guide and Harvard graduate, runs Gotham Walking Tours for history lovers (646 645 5782; www.walkingnyctours.com) She leads turn-up-and-go public tours on Thursdays and Saturdays in Greenwich Village, Chinatown and Little Italy for $20. The group consists of 10 to 30 people, depending on the time of year.
She also organises private tours. These cost $295 for up to four people for three hours, but with enough notice she can usually find another couple of people to share the cost.
Something else you might enjoy is meeting a New Yorker for a few hours using the Big Apple Greeter scheme (212 669 8159; www.bigapplegreeter.org) A volunteer greeter will show you a favourite neighbourhood, answer your questions and demonstrate how easy it is to use public transport – and it's free.
Around the world by cargo ship
John Sadler from Liverpool writes
I know you'll probably think we're crazy, but we would like to go around the world on a succession of cargo ships. We're both in our sixties and it would be a sort of grey-haired gap year. Who can help us organise such a journey?
Gill Charlton replies
Liverpool is a good place to start. Several shipping companies using the port offer passage to a few paying guests. There are two specialist cargo cruising agents who can help you design an interesting itinerary: Strand Travel (020 7802 2199; www.strandtravel.co.uk) and The Cruise People (020 7723 2450; www.cruisepeople.co.uk)
No flat bed, no refund
Arthur Wilkinson from Tadworth, Surrey writes
Last autumn we took a retirement trip around the world, flying BA/Qantas. Our agent booked flatbed seats in business class on the longer flights. The day before we left Britain, Qantas phoned to say that it could not supply flat beds on the Auckland to Los Angeles flight and would refund us A$400 per ticket once we had completed the flight.
We were asked to keep our boarding cards and submit them on our return. We did this and Qantas has sent vouchers worth £195 each to use on any "One World Alliance" airline. Apparently, it doesn't give cash refunds in cases such as ours.
When we tried to use the vouchers for a return flight to Berlin on BA (£200 each), we were told we must book through Qantas.
If we do so, the seats cost twice as much as Qantas is only permitted to sell full-fare tickets. We have encountered similar problems trying to use the vouchers on partner airlines to Japan.
We feel that Qantas has taken our money for a service that it couldn't provide and should refund us in cash, not vouchers.
Gill Charlton replies
In common with all airlines, Qantas doesn't guarantee particular seats, in case it needs to substitute another aircraft. Cash refunds are given only if you are downgraded to another class.
"While the passenger could claim that he was misled into thinking it would be a cash refund, there's no legal right to one," a spokesman for the Air Transport Users Council said.
"This was a failure to provide a facility in the class of travel, and as such it doesn't form part of the contract."
Essentially, this was a goodwill gesture on behalf of Qantas and it doesn't have to be in cash.
Does your home insurance cover your absence?
Mr H Foster from Hampshire writes
I recently informed my insurer that my house would be unoccupied for nine weeks, although friends and family would be keeping an eye on it and staying at weekends. I was shocked to learn that the company allowed only a one-month "empty premises" period. I consulted a broker, who said this stance was standard but a few insurers did allow a two-month empty premises period, including Zurich Insurance. Could you please alert readers, as I am sure people do not realise this?
Gill Charlton replies
Watch out for time limits. Some insurers also insist that customers taking longer holidays turn gas and electricity off at the mains and drain the boiler and hot water tanks.
Wait for 'lost' invoice
Paul Collins from Long Ashton, Somerset writes
I hired a Nissan Micra from Europcar at Madrid airport in October 2008 after booking online. When I dropped the car off the rep pointed out some slight scratches on the front and rear bumpers and a stone hole in a side light.
Although I had no knowledge of how these happened, I accepted liability. In mid-November I received my credit-card statement and saw that two almost identical charges had been made by Europcar of £155.48 and £155.14, put through on the same day.
I received no invoice in the post for the damage, though I needed one to make a claim on the rental damage excess policy I had taken out with Insurance4carhire.
I emailed Europcar to request this on November 21 and received a fairly prompt reply with some meaningless figures that did not even add up to the amount charged to my card.
Since then I have emailed Europcar's UK customer relations office to no avail and telephoned only to be cut off. It is now one year later and I still have no invoice to present to the insurer.
Gill Charlton replies
Several readers have been in touch to say that they are having trouble getting information about deductions for damage from Europcar franchises in both France and Spain. But to take a year to send an invoice seems very lax. It turns out that a perfectly serviceable and correct invoice was issued by Europcar Madrid on October 17 last year. It was sent to your home address and presumably got lost in the post.
Europcar UK said it was very concerned to learn that nobody in its British office had tried to resolve your query. I hope that something will be done to improve the company's customer service because following my inquiry Mr Collins received another illiterate email that once again failed to address his problem. In the end, I sent him a copy of the damage invoice that Europcar had sent to me.
The company says that an invoice detailing the damage surcharge is always sent to the customer's home address. This comes direct from the local rental agent.
The company says that customers can request sight of repair documents confirming the amount of the damage, but readers report difficulty in getting their hands on them.
New York walking tours
Robert and Jill Mason, Leicester
My wife and I will be in New York for the first time in February, staying for a week.
I know it's fairly safe to walk around Manhattan during the day, but we feel we might be happier on a guided walking tour.
Gill Charlton replies
The website www.nycgo.com is a good tool for planning your visit and lists quite a few walking tour operators.
A long-established company is Big Onion (001 212 439 1090; www.bigonion.com ), which runs daily public tours to different neighbourhoods, including a "multi-ethnic eating tour" for food lovers. Most walks don't need to be booked; you just turn up and pay $15 (£9).
Lina Viviano, a registered NYC guide and Harvard graduate, runs Gotham Walking Tours for history lovers (646 645 5782; www.walkingnyctours.com) She leads turn-up-and-go public tours on Thursdays and Saturdays in Greenwich Village, Chinatown and Little Italy for $20. The group consists of 10 to 30 people, depending on the time of year.
She also organises private tours. These cost $295 for up to four people for three hours, but with enough notice she can usually find another couple of people to share the cost.
Something else you might enjoy is meeting a New Yorker for a few hours using the Big Apple Greeter scheme (212 669 8159; www.bigapplegreeter.org) A volunteer greeter will show you a favourite neighbourhood, answer your questions and demonstrate how easy it is to use public transport – and it's free.
Around the world by cargo ship
John Sadler from Liverpool writes
I know you'll probably think we're crazy, but we would like to go around the world on a succession of cargo ships. We're both in our sixties and it would be a sort of grey-haired gap year. Who can help us organise such a journey?
Gill Charlton replies
Liverpool is a good place to start. Several shipping companies using the port offer passage to a few paying guests. There are two specialist cargo cruising agents who can help you design an interesting itinerary: Strand Travel (020 7802 2199; www.strandtravel.co.uk) and The Cruise People (020 7723 2450; www.cruisepeople.co.uk)
No flat bed, no refund
Arthur Wilkinson from Tadworth, Surrey writes
Last autumn we took a retirement trip around the world, flying BA/Qantas. Our agent booked flatbed seats in business class on the longer flights. The day before we left Britain, Qantas phoned to say that it could not supply flat beds on the Auckland to Los Angeles flight and would refund us A$400 per ticket once we had completed the flight.
We were asked to keep our boarding cards and submit them on our return. We did this and Qantas has sent vouchers worth £195 each to use on any "One World Alliance" airline. Apparently, it doesn't give cash refunds in cases such as ours.
When we tried to use the vouchers for a return flight to Berlin on BA (£200 each), we were told we must book through Qantas.
If we do so, the seats cost twice as much as Qantas is only permitted to sell full-fare tickets. We have encountered similar problems trying to use the vouchers on partner airlines to Japan.
We feel that Qantas has taken our money for a service that it couldn't provide and should refund us in cash, not vouchers.
Gill Charlton replies
In common with all airlines, Qantas doesn't guarantee particular seats, in case it needs to substitute another aircraft. Cash refunds are given only if you are downgraded to another class.
"While the passenger could claim that he was misled into thinking it would be a cash refund, there's no legal right to one," a spokesman for the Air Transport Users Council said.
"This was a failure to provide a facility in the class of travel, and as such it doesn't form part of the contract."
Essentially, this was a goodwill gesture on behalf of Qantas and it doesn't have to be in cash.
Does your home insurance cover your absence?
Mr H Foster from Hampshire writes
I recently informed my insurer that my house would be unoccupied for nine weeks, although friends and family would be keeping an eye on it and staying at weekends. I was shocked to learn that the company allowed only a one-month "empty premises" period. I consulted a broker, who said this stance was standard but a few insurers did allow a two-month empty premises period, including Zurich Insurance. Could you please alert readers, as I am sure people do not realise this?
Gill Charlton replies
Watch out for time limits. Some insurers also insist that customers taking longer holidays turn gas and electricity off at the mains and drain the boiler and hot water tanks.
Wednesday 9 December 2009
UK Credit Cards Top 10
1. Virgin Credit Card
0% for 16 months on balance transfers (from the date your account is opened. Transfers to be made within first 60 days. 2.98% handling fee applies), 0% for 3 months on card purchases* (from the date your account is opened), plus discounts at loads of Virgin companies! Info And Reviews
2. Vanquis Card
Vanquis considers every application on its own merits, so we encourage you to apply even if you have had credit problems in the past. View Details & Reviews for approval criteria Typical 39.9% APR VariableInfo And Reviews
3. Bread Prepaid Card
The BREAD Card is a Prepaid Maestro® card. It's NOT a credit card - so you can only spend what you load. It works in the same way as a pay-as-you-go mobile: you top it up with cash. And, it's easy to get one!Info And Reviews
4. HSBC Credit Card
The HSBC Bank Credit Card gives you a fast, convenient and reliable way to pay, 24 hours a day, wherever you happen to be.Info And Reviews
5. Capital One Classic Card
Get back on track by improving your credit rating with the Capital One Classic Visa Card. 34.9% APR typical variableInfo And Reviews
6. Tuxedo
With the Tuxedo eccount, you’ll get a choice of your own personalised Tuxedo MasterCard® or Maestro® Prepaid Card. Top-up as you go and enjoy the flexibility and security as you control your money your way.Info And Reviews
7. American Express Platinum Cashback
5% cashback in first 3 months on up to £2,000 of spending (up to £100 cashback). Up to 1.25% after that, with no limit. No annual fee. Typical 19.9% APR Variable. £30,000 minimum household income required to apply for a card.Info And Reviews
8. My Cash Plus Prepaid Card
The exclusive cashplus prepaid Gold MasterCard. The award winning prepaid card with no credit check or bank account needed, 100% acceptance guaranteedInfo And Reviews
9. Bank of Scotland All in One Card
0% for the first 9 months on balance transfers made in the first 90 days (3% fee). 0% for the first 9 months on purchases with your Bank of Scotland All In One Credit Card. And you'll get a great rate of 15.9% APR typical variable.Info And Reviews
10. Card One Banking Prepaid
Quick and easy to apply with no credit checks!Info And Reviews
0% for 16 months on balance transfers (from the date your account is opened. Transfers to be made within first 60 days. 2.98% handling fee applies), 0% for 3 months on card purchases* (from the date your account is opened), plus discounts at loads of Virgin companies! Info And Reviews
2. Vanquis Card
Vanquis considers every application on its own merits, so we encourage you to apply even if you have had credit problems in the past. View Details & Reviews for approval criteria Typical 39.9% APR VariableInfo And Reviews
3. Bread Prepaid Card
The BREAD Card is a Prepaid Maestro® card. It's NOT a credit card - so you can only spend what you load. It works in the same way as a pay-as-you-go mobile: you top it up with cash. And, it's easy to get one!Info And Reviews
4. HSBC Credit Card
The HSBC Bank Credit Card gives you a fast, convenient and reliable way to pay, 24 hours a day, wherever you happen to be.Info And Reviews
5. Capital One Classic Card
Get back on track by improving your credit rating with the Capital One Classic Visa Card. 34.9% APR typical variableInfo And Reviews
6. Tuxedo
With the Tuxedo eccount, you’ll get a choice of your own personalised Tuxedo MasterCard® or Maestro® Prepaid Card. Top-up as you go and enjoy the flexibility and security as you control your money your way.Info And Reviews
7. American Express Platinum Cashback
5% cashback in first 3 months on up to £2,000 of spending (up to £100 cashback). Up to 1.25% after that, with no limit. No annual fee. Typical 19.9% APR Variable. £30,000 minimum household income required to apply for a card.Info And Reviews
8. My Cash Plus Prepaid Card
The exclusive cashplus prepaid Gold MasterCard. The award winning prepaid card with no credit check or bank account needed, 100% acceptance guaranteedInfo And Reviews
9. Bank of Scotland All in One Card
0% for the first 9 months on balance transfers made in the first 90 days (3% fee). 0% for the first 9 months on purchases with your Bank of Scotland All In One Credit Card. And you'll get a great rate of 15.9% APR typical variable.Info And Reviews
10. Card One Banking Prepaid
Quick and easy to apply with no credit checks!Info And Reviews
Top tips for choosing a credit card
Finding a great credit card deal
Credit cards – there are hundreds of them out there, but how do you choose the right one?
Our top tips tell you what to look out for and make choosing the right credit card simple.
1. Think about how you use your credit card.
Taking a bit of time to work out what you want from your credit card will make it easier to pick a great deal, and could even save you money. For example:
If you don’t plan to pay back your balance in full each month, look for a credit card with a low APR so you can save on interest payments.
If you like to shop, look for a credit card with an introductory period where you pay 0% on purchases.
If you already owe money on a credit card, look for a credit card which charges 0% interest on balance transfers.
If you use your credit card a lot, but pay off the balance every month, then a cashback or reward credit card might be your best deal.
2. Be aware of balance transfer fees.
Taking advantage of 0% balance transfer deals could save you a fortune in interest payments and help you to repay your debt more quickly.
Be aware that most credit card companies charge you a balance transfer fee – usually around 3% of the amount you want to transfer – which will be added on to your balance.
3. Check the order of payments.
Credit card companies often specify the order in which you can pay off what you owe them, because the interest you pay on a balance transfer, purchases or a cash withdrawal will often be charged at different rates.
Many credit card companies use your monthly repayments to pay off your cheapest debt first - leaving the more expensive debt to build up more interest.
Check your credit card to see what order you will be able to pay off debt – it could save you money.
4. Find out about minimum repayments.
All credit cards have a minimum repayment that you must make each month.
Minimum repayments vary, but 2 to 5% of your balance is standard.
A credit card with low monthly minimum repayments might seem the best, but this means that you may end up paying off what you owe more slowly – and building up more interest on what you have borrowed.
5. Think about Payment Protection Insurance (PPI).
PPI is an optional insurance policy which you can take out to cover your credit card repayments if you are unable to work because of illness or redundancy.
PPI generally only covers your minimum monthly repayments. Be sure to read the terms and conditions to make sure PPI is right for you.
Credit cards – there are hundreds of them out there, but how do you choose the right one?
Our top tips tell you what to look out for and make choosing the right credit card simple.
1. Think about how you use your credit card.
Taking a bit of time to work out what you want from your credit card will make it easier to pick a great deal, and could even save you money. For example:
If you don’t plan to pay back your balance in full each month, look for a credit card with a low APR so you can save on interest payments.
If you like to shop, look for a credit card with an introductory period where you pay 0% on purchases.
If you already owe money on a credit card, look for a credit card which charges 0% interest on balance transfers.
If you use your credit card a lot, but pay off the balance every month, then a cashback or reward credit card might be your best deal.
2. Be aware of balance transfer fees.
Taking advantage of 0% balance transfer deals could save you a fortune in interest payments and help you to repay your debt more quickly.
Be aware that most credit card companies charge you a balance transfer fee – usually around 3% of the amount you want to transfer – which will be added on to your balance.
3. Check the order of payments.
Credit card companies often specify the order in which you can pay off what you owe them, because the interest you pay on a balance transfer, purchases or a cash withdrawal will often be charged at different rates.
Many credit card companies use your monthly repayments to pay off your cheapest debt first - leaving the more expensive debt to build up more interest.
Check your credit card to see what order you will be able to pay off debt – it could save you money.
4. Find out about minimum repayments.
All credit cards have a minimum repayment that you must make each month.
Minimum repayments vary, but 2 to 5% of your balance is standard.
A credit card with low monthly minimum repayments might seem the best, but this means that you may end up paying off what you owe more slowly – and building up more interest on what you have borrowed.
5. Think about Payment Protection Insurance (PPI).
PPI is an optional insurance policy which you can take out to cover your credit card repayments if you are unable to work because of illness or redundancy.
PPI generally only covers your minimum monthly repayments. Be sure to read the terms and conditions to make sure PPI is right for you.
Ten top credit card tips
Are you spending too much on credit cards or not getting enough back? Check out our top 10 tips to ensure you're making the most of your plastic.
For many of us, credit cards are an everyday way of managing our money, whether it's to spread the cost of a purchase, be rewarded for spending or shopping safely.
However, the benefits of paying by credit card can be quickly wiped out if you're not careful. There are a whole host of potential fees and charges that can be incurred.
So how can you get the most out of your card and avoid a credit catastrophe?
Here are our top 10 tips:
This week's top-rated credit cards
1. Repay in full each month
If you can afford it, this is the simplest way to ensure you never pay a penny for the convenience of using a credit card. Interest is only charged on any spending you have done if you don't clear your balance in full by the date given on your monthly statement.
Your card provider won't insist on you paying off the entire amount. In fact, the minimum you have to repay could be as little as 2.5% or £5, whichever is greater. This could seem an attractive option but not only could it cost you hundreds, if not thousands of pounds in interest, it could also take you years to clear your debt.
2. Use a direct debit
If you set up a direct debit for your monthly payments you eradicate the risk of being late with your monthly payment. If you're even a day late, you'll be hit with a penalty charge of up to £12.
The other big risk of missed or late payments is that they could be recorded on your credit file. This will have a negative impact on your score and could affect your ability to get credit cards or other forms of borrowing in the future.
3. Never withdraw cash
It should be a golden rule to never use your credit card to withdraw money from a cash machine.
Cash withdrawals usually attract interest at a higher rate than purchases or balance transfers. There is no interest-free period so you start accruing interest from the day the withdrawal is made, regardless of whether or not you clear your balance in full at the end of the month. You'll also probably incur a cash withdrawal free.
That makes credit cards a very expensive way of accessing cash.
4. Repay costliest credit first
If you have more than one credit card then you should repay the most expensive one first.
Not only could this save you money in the long term, if you're making an effort to get on top of your debt, closing down an expensive card can be a real boost to your motivation.
5. Don't pay more than you need
If you have an outstanding balance that's costing you an arm and a leg, you may be able to slash the amount of interest you pay by moving your debt on to a cheaper credit card.
There are a number of interest-free credit cards available - Virgin for example offers a 16-month interest-free period on balance transfers, although you will be charged a 2.98% balance transfer fee. Balance transfer fees are normal on 0% deals, but they're worth paying and it opting for such a product could still save you money in the longer term.
Another option is a low-rate card such as Barclaycard Simplicity, which charges 6.8% for however long it takes to pay off the loan - well below the average rate of 18.21%.
Unfortunately, you'll only qualify for one of these cards if you have a top credit score, but if you can, you can save hundreds of pounds and pay off the outstanding debt more quickly.
You'll usually pay a balance transfer fee, often of around 3%, but this will still save you money in the longer term.
6. Reward yourself
If you're regularly using a credit card and pay your balance off in full each month, you could actually be making money as you use your card.
Switch to a cashback credit card and you could get paid to shop. For example, the American Express Platinum Cashback card pays you 5% in the first three months, up to £2,500.
It charges 19.9%, though, so you'll only make money if you do repay your full balance each month.
Other cards will make a set donation to a set charity or even football club, so your sensible credit card use can earn money for yourself or your chosen cause.
7. Don't spend if you've transferred a balance
If you've just found a 0% deal for balance transfers, spending on that card could undo all the great benefits.
For example, if your card is offering 0% interest on transferred balances for 12 months, but your purchases are only interest free for three months, you could be caught out.
This is because most card providers use a repayment system whereby your monthly payments go towards clearing the cheapest debt first, leaving you accruing interest at the highest rate.
8. Never exceed your credit limit
Keep a close eye on what you owe on a card and make sure you don't accidentally go over your spending limit.
Not only will doing so usually block the payment, you'll also have to pay a penalty fee of up to £12.
If you want to extend your credit limit, talk to your provider in advance and ask them to authorise it.
9. Shop around
Whatever you use a credit card for, there are some great deals out there but you'll only find them if you shop around.
Providers will often offer their best perks to new customers, to try and entice them in. So, whether it's rewards, balance transfers or interest-free spending you're after, shop around and switch to whichever has the best deal.
10. Brush up your credit rating
If you're planning to apply for a market-leading credit card - perhaps to transfer a balance to or to benefit from rewards - your credit score needs to be great.
Obtain a copy of your credit report from a company like Equifax or Experian, it only costs a few pounds. Once you know what your credit score is, you'll have a better idea of which cards you're likely to qualify for.
There are steps you can take to improve your rating. Close down any cards you don't currently use, flag up any inaccuracies on the report and make sure any outstanding payments you owe are made on time. This will gradually build up your credit score, allowing you to eventually qualify for the card you want.
Remember, if you have no credit history at all, you'll need to use credit to boost your score. Try a credit builder like the Barclaycard Initial.
For many of us, credit cards are an everyday way of managing our money, whether it's to spread the cost of a purchase, be rewarded for spending or shopping safely.
However, the benefits of paying by credit card can be quickly wiped out if you're not careful. There are a whole host of potential fees and charges that can be incurred.
So how can you get the most out of your card and avoid a credit catastrophe?
Here are our top 10 tips:
This week's top-rated credit cards
1. Repay in full each month
If you can afford it, this is the simplest way to ensure you never pay a penny for the convenience of using a credit card. Interest is only charged on any spending you have done if you don't clear your balance in full by the date given on your monthly statement.
Your card provider won't insist on you paying off the entire amount. In fact, the minimum you have to repay could be as little as 2.5% or £5, whichever is greater. This could seem an attractive option but not only could it cost you hundreds, if not thousands of pounds in interest, it could also take you years to clear your debt.
2. Use a direct debit
If you set up a direct debit for your monthly payments you eradicate the risk of being late with your monthly payment. If you're even a day late, you'll be hit with a penalty charge of up to £12.
The other big risk of missed or late payments is that they could be recorded on your credit file. This will have a negative impact on your score and could affect your ability to get credit cards or other forms of borrowing in the future.
3. Never withdraw cash
It should be a golden rule to never use your credit card to withdraw money from a cash machine.
Cash withdrawals usually attract interest at a higher rate than purchases or balance transfers. There is no interest-free period so you start accruing interest from the day the withdrawal is made, regardless of whether or not you clear your balance in full at the end of the month. You'll also probably incur a cash withdrawal free.
That makes credit cards a very expensive way of accessing cash.
4. Repay costliest credit first
If you have more than one credit card then you should repay the most expensive one first.
Not only could this save you money in the long term, if you're making an effort to get on top of your debt, closing down an expensive card can be a real boost to your motivation.
5. Don't pay more than you need
If you have an outstanding balance that's costing you an arm and a leg, you may be able to slash the amount of interest you pay by moving your debt on to a cheaper credit card.
There are a number of interest-free credit cards available - Virgin for example offers a 16-month interest-free period on balance transfers, although you will be charged a 2.98% balance transfer fee. Balance transfer fees are normal on 0% deals, but they're worth paying and it opting for such a product could still save you money in the longer term.
Another option is a low-rate card such as Barclaycard Simplicity, which charges 6.8% for however long it takes to pay off the loan - well below the average rate of 18.21%.
Unfortunately, you'll only qualify for one of these cards if you have a top credit score, but if you can, you can save hundreds of pounds and pay off the outstanding debt more quickly.
You'll usually pay a balance transfer fee, often of around 3%, but this will still save you money in the longer term.
6. Reward yourself
If you're regularly using a credit card and pay your balance off in full each month, you could actually be making money as you use your card.
Switch to a cashback credit card and you could get paid to shop. For example, the American Express Platinum Cashback card pays you 5% in the first three months, up to £2,500.
It charges 19.9%, though, so you'll only make money if you do repay your full balance each month.
Other cards will make a set donation to a set charity or even football club, so your sensible credit card use can earn money for yourself or your chosen cause.
7. Don't spend if you've transferred a balance
If you've just found a 0% deal for balance transfers, spending on that card could undo all the great benefits.
For example, if your card is offering 0% interest on transferred balances for 12 months, but your purchases are only interest free for three months, you could be caught out.
This is because most card providers use a repayment system whereby your monthly payments go towards clearing the cheapest debt first, leaving you accruing interest at the highest rate.
8. Never exceed your credit limit
Keep a close eye on what you owe on a card and make sure you don't accidentally go over your spending limit.
Not only will doing so usually block the payment, you'll also have to pay a penalty fee of up to £12.
If you want to extend your credit limit, talk to your provider in advance and ask them to authorise it.
9. Shop around
Whatever you use a credit card for, there are some great deals out there but you'll only find them if you shop around.
Providers will often offer their best perks to new customers, to try and entice them in. So, whether it's rewards, balance transfers or interest-free spending you're after, shop around and switch to whichever has the best deal.
10. Brush up your credit rating
If you're planning to apply for a market-leading credit card - perhaps to transfer a balance to or to benefit from rewards - your credit score needs to be great.
Obtain a copy of your credit report from a company like Equifax or Experian, it only costs a few pounds. Once you know what your credit score is, you'll have a better idea of which cards you're likely to qualify for.
There are steps you can take to improve your rating. Close down any cards you don't currently use, flag up any inaccuracies on the report and make sure any outstanding payments you owe are made on time. This will gradually build up your credit score, allowing you to eventually qualify for the card you want.
Remember, if you have no credit history at all, you'll need to use credit to boost your score. Try a credit builder like the Barclaycard Initial.
'Individual' policies on credit card applications
Credit card providers do not rely exclusively on scores from reference agencies in deciding whether to accept a customer application, a personal finance expert has pointed out.
Writing in the Observer newspaper, consumer affairs specialist Margaret Dibben said that card firms rely on their own "individual scoring systems", as UK providers are not covered by any "universal credit rating system".
Reference agencies allow consumers to check how likely they are to be accepted for new credit cards, loans and mortgages by analysing their repayment histories.
Ms Dibben gave the advice in response to a query from reader "GW", who had received differing credit reports when checking their record with three agencies.
Call Credit gave the reader a score of 562, while Equifax and Experian returned scores of 556 and 883 respectively.
The expert pointed out that these results offered only a "general indication" of credit-worthiness to providers.
She added: "Lenders do not take a credit score from the agencies but instead put information from one agency into their own individual scoring systems with other details, such as age, as they choose.
"Not all lenders supply information to all three agencies, so the agencies' information is not identical."
Writing in the Observer newspaper, consumer affairs specialist Margaret Dibben said that card firms rely on their own "individual scoring systems", as UK providers are not covered by any "universal credit rating system".
Reference agencies allow consumers to check how likely they are to be accepted for new credit cards, loans and mortgages by analysing their repayment histories.
Ms Dibben gave the advice in response to a query from reader "GW", who had received differing credit reports when checking their record with three agencies.
Call Credit gave the reader a score of 562, while Equifax and Experian returned scores of 556 and 883 respectively.
The expert pointed out that these results offered only a "general indication" of credit-worthiness to providers.
She added: "Lenders do not take a credit score from the agencies but instead put information from one agency into their own individual scoring systems with other details, such as age, as they choose.
"Not all lenders supply information to all three agencies, so the agencies' information is not identical."
Consumers Rank Credit Card Bills Higher Priority Than Mortgage, Says Auriemma Consulting Group
WESTBURY, N.Y. - (Business Wire) In a break from historical precedent, U.S. consumers rank credit cards as a higher repayment priority than mortgages, according to Cardbeat®, a syndicated market research report published by Auriemma Consulting Group (ACG). While consumers in previous years had always named their mortgage as the bill they would pay first, in the most recent survey they put mortgage payments in second place, after credit card bills.
“ACG believes that this change is driven by two market trends,” says Nancy Stahl, editor of Cardbeat. “First, credit has become tighter. Issuers have cut credit lines, and cardholders are aware that missed or late payments can trigger rate increases or account closure.” Cash-strapped consumers view their credit cards as their “lifeline,” necessary for juggling daily living expenses, she said.
At the same time, Stahl noted, mortgage foreclosures have become common and many consumers have ‘underwater’ mortgages for more than the current value of their home. “Intense media coverage of the housing crisis and of legislative efforts to assist homeowners who fall behind may be swaying borrowers toward the conclusion that it’s more important to be current on their credit card than on their mortgage.”
The information in this release includes data from a survey of 430 credit card users conducted in October 2009.
About Auriemma Consulting Group
Auriemma Consulting Group (ACG) is a full-service management consulting firm serving the payments and lending industries since 1984. Cardbeat® is ACG’s syndicated market research study of credit card holders, conducted monthly in the U.S. and quarterly in the U.K. With offices in New York and London, ACG consultants are experienced practitioners, drawn from the credit card, private label, auto finance, mortgage, and retail banking industries that we serve. For more information, contact Nancy Stahl at 516-333-4800 or nancy.stahl@acg.net.
“ACG believes that this change is driven by two market trends,” says Nancy Stahl, editor of Cardbeat. “First, credit has become tighter. Issuers have cut credit lines, and cardholders are aware that missed or late payments can trigger rate increases or account closure.” Cash-strapped consumers view their credit cards as their “lifeline,” necessary for juggling daily living expenses, she said.
At the same time, Stahl noted, mortgage foreclosures have become common and many consumers have ‘underwater’ mortgages for more than the current value of their home. “Intense media coverage of the housing crisis and of legislative efforts to assist homeowners who fall behind may be swaying borrowers toward the conclusion that it’s more important to be current on their credit card than on their mortgage.”
The information in this release includes data from a survey of 430 credit card users conducted in October 2009.
About Auriemma Consulting Group
Auriemma Consulting Group (ACG) is a full-service management consulting firm serving the payments and lending industries since 1984. Cardbeat® is ACG’s syndicated market research study of credit card holders, conducted monthly in the U.S. and quarterly in the U.K. With offices in New York and London, ACG consultants are experienced practitioners, drawn from the credit card, private label, auto finance, mortgage, and retail banking industries that we serve. For more information, contact Nancy Stahl at 516-333-4800 or nancy.stahl@acg.net.
Avoid a credit card hangover this Christmas
Latest research made by travel rewards firm Airmiles showed that an average UK shopper would spend about £300 each on Christmas presents this year, or a total of £10.5bn. As the Yuletide nears and we buy gifts for our loved ones, it is easy for the budget to swell. However, there are simple ways to avoid starting 2010 with a debt hangover.
Financial experts advice that the best way to spread our budget is to use credit cards with zero interest rates. There are several credit card providers that offer 12 months interest-free, including the Tesco Clubcard Mastercard, which also offers 0 percent on balance transfers for six months and five Clubcard points for every £4 spent at Tesco or one point for every £4 spent elsewhere.
David Black, a banking expert at analysts Defacto advises those with a good credit rating to change their credit card and take advantage of a zero percent introductory purchase offer. This would spread the cardholder’s Christmas budget without paying interest.
Credit cards that offer zero interest rates are like taking a loan without any interest. They are very helpful if you want to cover all your Christmas shopping with your salary or without dipping into your savings.
But if you think you will have a problem paying off the minimum monthly balance, even zero interest-rate credit cards are not advisable because these cards can be very tempting to spend more than what you can afford to pay off every month. Once the introductory period is up, the interest will quickly add up in your outstanding balance.
Because of the recession, many lenders are still very strict in issuing credit cards. Many credit card providers will only lend to those who have a good credit standing. It will damage your credit ratings if you have multiple credit cards applications and being rejected.
You can check your credit rating for free with services like Credit Expert.
To those who have extra cash and do not need credit cards for their Christmas spending, reward credit cards are your best option. These cards offer many benefits, including cashback on all your spending, build up airmiles and loyalty points.
American Express recently launched its rewards credit card, which offers three points for every £1 spent at major UK supermarkets, two points for £1 spent at department stores and one point for money spent elsewhere. Points can be redeemed for vouchers to shop in Marks & Spencer, Harrods, HMV, House of Fraser, Comet as well as Molton Brown and other big names.
The Barclaycard Cashback card is a good alternative paying, 1 percent on the first £2,000 spend each year and 0.5 percent thereafter.
©MoneyHighStreet.com Personal Finance
Financial experts advice that the best way to spread our budget is to use credit cards with zero interest rates. There are several credit card providers that offer 12 months interest-free, including the Tesco Clubcard Mastercard, which also offers 0 percent on balance transfers for six months and five Clubcard points for every £4 spent at Tesco or one point for every £4 spent elsewhere.
David Black, a banking expert at analysts Defacto advises those with a good credit rating to change their credit card and take advantage of a zero percent introductory purchase offer. This would spread the cardholder’s Christmas budget without paying interest.
Credit cards that offer zero interest rates are like taking a loan without any interest. They are very helpful if you want to cover all your Christmas shopping with your salary or without dipping into your savings.
But if you think you will have a problem paying off the minimum monthly balance, even zero interest-rate credit cards are not advisable because these cards can be very tempting to spend more than what you can afford to pay off every month. Once the introductory period is up, the interest will quickly add up in your outstanding balance.
Because of the recession, many lenders are still very strict in issuing credit cards. Many credit card providers will only lend to those who have a good credit standing. It will damage your credit ratings if you have multiple credit cards applications and being rejected.
You can check your credit rating for free with services like Credit Expert.
To those who have extra cash and do not need credit cards for their Christmas spending, reward credit cards are your best option. These cards offer many benefits, including cashback on all your spending, build up airmiles and loyalty points.
American Express recently launched its rewards credit card, which offers three points for every £1 spent at major UK supermarkets, two points for £1 spent at department stores and one point for money spent elsewhere. Points can be redeemed for vouchers to shop in Marks & Spencer, Harrods, HMV, House of Fraser, Comet as well as Molton Brown and other big names.
The Barclaycard Cashback card is a good alternative paying, 1 percent on the first £2,000 spend each year and 0.5 percent thereafter.
©MoneyHighStreet.com Personal Finance
In-flight credit card reader gets accreditation
A credit card reader designed to improve security for in-flight payments has received UK Cards Association accreditation, it was announced today (December 8th).
The Point-of-Sale (POS) device, developed by GuestLogix, is already being used by Ryanair and British Airways.
According to GuestLogix, the reader offers "greatly improved" protection from possible credit card fraud.
The handheld device operates in a similar way to the chip and PIN readers used by UK retailers.
UK Cards Association accreditation is attained via a specialist evaluation and signals that a device complies with industry standards.
Tom Douramakos, president and chief executive at GuestLogix, said: "Our new POS device meets the payment industry's most stringent security standards to assure safe shopping for passengers, reliability and optimised cost of usage for our customers.
"We are very excited to receive this accreditation."
Figures from CIFAS, the UK's fraud prevention service, suggest that general fraud rates increased by 16% during 2008 when compared with the previous year.
The Point-of-Sale (POS) device, developed by GuestLogix, is already being used by Ryanair and British Airways.
According to GuestLogix, the reader offers "greatly improved" protection from possible credit card fraud.
The handheld device operates in a similar way to the chip and PIN readers used by UK retailers.
UK Cards Association accreditation is attained via a specialist evaluation and signals that a device complies with industry standards.
Tom Douramakos, president and chief executive at GuestLogix, said: "Our new POS device meets the payment industry's most stringent security standards to assure safe shopping for passengers, reliability and optimised cost of usage for our customers.
"We are very excited to receive this accreditation."
Figures from CIFAS, the UK's fraud prevention service, suggest that general fraud rates increased by 16% during 2008 when compared with the previous year.
PCI DSS: the end is more important than the means
After making its mark in the US and the UK, the Payment Card Industry Data Security Standard (PCI DSS) has its sights on the rest of the world, writes Roger Rawlinson, director of consultancy atNCC Group.
While the younger markets in the Far and Middle East may find compliance relatively easy to achieve, older systems in the EU are likely to require a huge amount of financial investment. This will be one of the greatest technical challenges that retailers in particular have faced in recent years - PCI DSS is notoriously difficult to understand and implement correctly.
Look, for example, at our big supermarkets, which are increasingly spreading their international wings, often through acquisition rather than by building new stores. Many will have a tilling solution across every store that is out of date from the point of view of PCI DSS, and that is unable to deal with the collection, holding and transmission of data securely enough. If replacing each till costs €500 and there are thousands of tills across the chain in Europe, the bill will run to millions.
The thing that many people don't realise is that the standard does, in reality, offer some room for manoeuvre. It is important that businesses - and, indeed, consultants - are pragmatic in the way they understand and implement the standard and its requirements, looking at the threat and seeing if the risk can be mitigated through appropriate countermeasures. For example, many older tills will not support antivirus software, but this can be implemented across the network with careful controls to fulfil the requirements of the standard.
With some of the organisations we work with, the first task is to change the way of working, not to replace every piece of technology in the business. In the retail sector in particular, many businesses use credit card data as the main form of customer identification.
The issue can be resolved technically simply by masking the credit card number and/or by using end-to-end encryption, so that staff never see the digits behind the stars.
The technological issues, then, while a challenge are not insurmountable. But companies then need establish better ways of identifying customers, and this is the real frustration. Credit card numbers are used by so many companies in so many instances that it is a hugely complex task to untangle the data from the network. If you pay for a parking space on your card, your credit card identifies you when you leave the car park; if you're travelling by train, it's your credit card number that secures your ticket.
It is vital that businesses stop using this as a means of identification and begin the move towards tokenisation, using a representative number to replace the credit card. As it stands, consultants like me need to discover every last piece of cardholder data in an environment. When they are hidden in every corner of the business it's a huge issue - not only in terms of time and cost wasted, but also in terms of threats to security.
In theory, a large part of the standard can be met by way of so-called 'compensating controls'. In reality, of course, the number of compensating controls needs to be manageable. The intent of the standard is more important than the detail, and as long as customer data can be proved to be safe, there are a number of ways in which compliance can be achieved without necessarily following the rules slavishly. What is needed, however, is a greater awareness of the need to protect customer data - companies need urgently to look at new ways of working to reduce the risk of a catastrophic security event.
While the younger markets in the Far and Middle East may find compliance relatively easy to achieve, older systems in the EU are likely to require a huge amount of financial investment. This will be one of the greatest technical challenges that retailers in particular have faced in recent years - PCI DSS is notoriously difficult to understand and implement correctly.
Look, for example, at our big supermarkets, which are increasingly spreading their international wings, often through acquisition rather than by building new stores. Many will have a tilling solution across every store that is out of date from the point of view of PCI DSS, and that is unable to deal with the collection, holding and transmission of data securely enough. If replacing each till costs €500 and there are thousands of tills across the chain in Europe, the bill will run to millions.
The thing that many people don't realise is that the standard does, in reality, offer some room for manoeuvre. It is important that businesses - and, indeed, consultants - are pragmatic in the way they understand and implement the standard and its requirements, looking at the threat and seeing if the risk can be mitigated through appropriate countermeasures. For example, many older tills will not support antivirus software, but this can be implemented across the network with careful controls to fulfil the requirements of the standard.
With some of the organisations we work with, the first task is to change the way of working, not to replace every piece of technology in the business. In the retail sector in particular, many businesses use credit card data as the main form of customer identification.
The issue can be resolved technically simply by masking the credit card number and/or by using end-to-end encryption, so that staff never see the digits behind the stars.
The technological issues, then, while a challenge are not insurmountable. But companies then need establish better ways of identifying customers, and this is the real frustration. Credit card numbers are used by so many companies in so many instances that it is a hugely complex task to untangle the data from the network. If you pay for a parking space on your card, your credit card identifies you when you leave the car park; if you're travelling by train, it's your credit card number that secures your ticket.
It is vital that businesses stop using this as a means of identification and begin the move towards tokenisation, using a representative number to replace the credit card. As it stands, consultants like me need to discover every last piece of cardholder data in an environment. When they are hidden in every corner of the business it's a huge issue - not only in terms of time and cost wasted, but also in terms of threats to security.
In theory, a large part of the standard can be met by way of so-called 'compensating controls'. In reality, of course, the number of compensating controls needs to be manageable. The intent of the standard is more important than the detail, and as long as customer data can be proved to be safe, there are a number of ways in which compliance can be achieved without necessarily following the rules slavishly. What is needed, however, is a greater awareness of the need to protect customer data - companies need urgently to look at new ways of working to reduce the risk of a catastrophic security event.
Have British Airways staff stolen your credit card details?
Flown with British Airways recently? Your credit card details could be in the hands of criminals, according to The Daily Mirror. The newspaper claims anyone who booked a BA flight via their German telesales centre in the last year is at risk, and that many victims had their details accessed immediately after booking a flight. A police raid on Flyline, British Airways’ booking centre in Bremen which employs 300 staff has “unearthed significant fraudulent activity”. A team leader there has been arrested and dismissed by BA, and a second German colleague has been suspended.
It’s alleged that lists of hundreds of BA passengers’ credit card details were found in the desks of staff – one person is said to have already confessed to using the details for cloning fake cards. According to The Mirror, there is also evidence of fraud involving refunds, re-issuing tickets and frequent flyer accounts. A BA spokesman told the paper last night: “This is subject to a current German police investigation so it would be inappropriate to comment.”
The news has only broken in the past hour – we’ve spoke to British Airways this morning, and they’ve promised to update us shortly on what to do if you’re concerned your details may have been stolen.
It’s alleged that lists of hundreds of BA passengers’ credit card details were found in the desks of staff – one person is said to have already confessed to using the details for cloning fake cards. According to The Mirror, there is also evidence of fraud involving refunds, re-issuing tickets and frequent flyer accounts. A BA spokesman told the paper last night: “This is subject to a current German police investigation so it would be inappropriate to comment.”
The news has only broken in the past hour – we’ve spoke to British Airways this morning, and they’ve promised to update us shortly on what to do if you’re concerned your details may have been stolen.
Early Xmas for Britain's Card Thieves
YORK, England, Dec. 9 /PRNewswire/ -- Britons are being warned to be vigilant
with their credit and debit cards this Christmas as criminals target the hordes
of shoppers returning to the high street.
New figures from life assistance company CPP, predict that over 315,000 shoppers
risk falling prey to card fraud during the festive season, with the average sum
set to be over GBP 600. (1)
This retail fraud epidemic is being fuelled by shoppers coming back to UK high
streets. With an average Christmas present budget of GBP 395, Brits are
rejecting online to favour street shopping. Sixty-five per cent will be buying
at least half their gifts in person, while almost two-fifths will purchase the
majority of presents on the high street, compared to just a quarter who will do
so online.
This return to the high street is being fuelled in part by concerns about postal
delays - one in four is worried that online orders won't arrive in time for
Christmas. CPP warns that the number of lost and stolen cards will peak on 18
December as stressed out last-minute shoppers become less careful with their
bank cards. (2)
Three quarters (75 per cent) of shoppers find the experience stressful, which
psychologists show makes them more susceptible to theft. The hurly burly of
festive shopping also means people lose track of their spending, leaving them at
risk from fraud as suspicious transactions can go unnoticed. A third of shoppers
admit they lose track of spending and a fifth don't check their receipts against
bank statements after they get home.
Dr. Glenn Wilson, Visiting Professor of Psychology at Gresham College said:
"Last minute Christmas shopping on the high street is a stressful experience.
Stress affects people in many ways, both physically and psychologically. Heart
rate and blood pressure rise, and there is an increase in anxiety,
distractibility, confusion and forgetfulness, all of which makes people more
likely to lose things, such as their bank cards, and be more at risk of theft."
Sarah Blaney, card fraud expert at CPP, said: "More and more consumers are aware
of the risks when shopping online and are vigilant about keeping their passwords
and personal details safe. However, we often get caught up in the hustle and
bustle of the high street: a combination of crowds and pressure to find the
perfect present can lead to our attention wandering.
"Retail fraud remains a problem despite the introduction of Chip and PIN
verification. In the first six months of 2009 it totalled nearly GBP 35m (3).
However, lost and stolen cards can be used to make illegal purchases online,
which is the largest type of card fraud totalling GBP 134m in the first half of
the year.
"It is important people protect their PIN numbers and check their receipts
against their bank statements on a regular basis. We all need to be responsible
to stop fraud. Card protection can give shoppers valuable peace of mind, helping
them to cancel and replace their cards immediately should the worst happen and
provide fraud victim support."
Key statistics
-- The average sum stolen from card fraud victims stands at GBP 623
-- A fifth of card fraud victims report having over GBP 1000 fraudulently
taken from their bank accounts
-- 65 per cent will be buying at least half of their gifts in person this
Christmas
-- 37 per cent will purchase the majority on the high street compared to 27
per cent online
-- 25 per cent of Brits are concerned that online orders won't arrive in
time for Christmas
-- 75 per cent find Christmas shopping stressful
-- 33 per cent admit they've lost track of spending over Christmas
-- 20 per cent don't check their receipts against bank statements
-- 10 per cent confess they have thrown away receipts containing card
details
Top tips fromCPPto help avoid being a victim of card fraud
1. Don't carry multiple debit/credit cards in a wallet - only carry the
essential cards you need
2. Don't leave belongings unattended while shopping
3. Don't carry debit/credit cards loose in a bag or pocket
4. If your cards are registered with a Card Protection company make sure you
have their emergency loss reporting number
5. Don't ever write down your PIN number
6. Don't let a shop assistant take your debit/credit card out of sight - they
could be copied or cloned
7. Don't let someone else take money out on your behalf
8. Check your receipts against your statements when you get home
9. If you are concerned your cards may have been lost or stolen, contact your
bank immediately to get the card cancelled
10. Make sure your bank has up-to-date contact details for you, including your
mobile phone number in case they need to check if transactions are genuine
For more information or to arrange a time for interview with identity theft
expert Sarah Blaney, please call Band & Brown Communications:
Eoghan Hughes - 020 7419 6976
Hester Decouz - 020 7419 7339
Notes to Editor
1. According to online research commissioned by CPP through Opinion Matters
among 1524 UK cardholders the average sum fraudulently taken following bank
cards being lost or stolen is GBP 623 - based on a sample of 100 card fraud
victims. Over the period December 2008 - January 2009, 36,356 cards were
lost out of 5.2 million CPP card customers. This amounts to 0.07%.
Extrapolating this to the UK population 0.07 per cent of the UK card
population is 0.07 x 45,000,000 = 315,000 victims.
2. Research among CPP's 5.2 million policyholders for Card Protection shows
that the last Friday before Christmas has been the day for the highest
number of cards lost and stolen over 2006, 2007 and 2008.
3. Figures according to Fraud - The Facts 2009 - http://www.cardwatch.org.uk
from APACS, the UK Payments Administration
Research Methodology
Online research was carried out by Opinion Matters amongst 1524 UK adults. The
research was conducted between the 18th and 23rd November 2009.
TheCPPGroup Plc
The CPP Group Plc (CPP) is an international marketing services business offering
bespoke customer management solutions to multi-sector business partners designed
to enhance their customer revenue, engagement and loyalty, whilst at the same
time reducing cost to deliver improved profitability.
This is underpinned by the delivery of a portfolio of complementary Life
Assistance products, designed to help our mutual customers cope with the
anxieties associated with the challenges and opportunities of everyday life.
Whether our customers have lost their wallets, been a victim of identity fraud
or looking for lifestyle perks, CPP can help remove the hassle from their lives
leaving them free to enjoy life. Globally, our Life Assistance products and
services are designed to simplify the complexities of everyday living whether
these affect personal finances, home, travel, personal data or future plans.
When it really matters, Life Assistance enables people to live life and worry
less.
Established in 1980, CPP has 11 million customers and more than 200 business
partners across Europe, North and South America and Asia Pacific and employs
2,000 employees who handle 16 million consumer sales and service conversations
each year.
In 2008, Group revenue was GBP 259.5 million, an increase of more than 15 per
cent over the previous year. This is more than five times the sales level of
2000.
What We Do:
CPP provides a range of assistance products and services that allow our business
partners to forge closer relationships with their customers.
We have a solution for many eventualities, including:
-- Insuring our customers' mobile phones
-- Protecting the payment cards in our customers' wallets and purses,
should these be lost or stolen
-- Providing assistance and protection if a customer's keys are lost or
stolen
-- Providing advice, insurance and assistance to protect customers against
the insidious crime of identity fraud
-- Offering advice to people considering legal action and cover for the
costs involved in taking action on a range of legal issues
-- Assisting customers with their travel emergencies
-- Monitoring the credit status of our customers
CPP is an award winning organisation:
-- Finalist in the National Insurance Fraud Awards, Counter Fraud
Initiative of the Year category, 2009
-- Finalist in the European Contact Centre Awards, Large Team and Advisor
of the Year categories, 2009
-- Named in the Sunday Times 2008 PricewaterhouseCoopers Profit Track 100
-- Finalists in the National Business Awards, 3i Growth Strategy category,
2008
-- Finalist in the National Business Awards, Business of the Year category,
2007, 2009 and Highly Commended in 2008
-- Named in the Sunday Times 2006, 2007, 2008 and 2009 HSBC Top Track 250
companies
-- Regional winner of the National Training Awards, 2007
-- Winner of the BITC Health, Work and Well-Being Award, 2007
-- Highly Commended in the UK National Customer Service Awards, 2006
-- Winner of the Tamworth Community Involvement Award, 2006. Finalist in
2008
-- Highly Commended in The Press Best Link Between Business and Education,
2005 and 2006. Winner in 2007
-- Finalist in the National Business Awards, Innovation category, 2005
For more information on CPP click onwww.cpp.co.uk
with their credit and debit cards this Christmas as criminals target the hordes
of shoppers returning to the high street.
New figures from life assistance company CPP, predict that over 315,000 shoppers
risk falling prey to card fraud during the festive season, with the average sum
set to be over GBP 600. (1)
This retail fraud epidemic is being fuelled by shoppers coming back to UK high
streets. With an average Christmas present budget of GBP 395, Brits are
rejecting online to favour street shopping. Sixty-five per cent will be buying
at least half their gifts in person, while almost two-fifths will purchase the
majority of presents on the high street, compared to just a quarter who will do
so online.
This return to the high street is being fuelled in part by concerns about postal
delays - one in four is worried that online orders won't arrive in time for
Christmas. CPP warns that the number of lost and stolen cards will peak on 18
December as stressed out last-minute shoppers become less careful with their
bank cards. (2)
Three quarters (75 per cent) of shoppers find the experience stressful, which
psychologists show makes them more susceptible to theft. The hurly burly of
festive shopping also means people lose track of their spending, leaving them at
risk from fraud as suspicious transactions can go unnoticed. A third of shoppers
admit they lose track of spending and a fifth don't check their receipts against
bank statements after they get home.
Dr. Glenn Wilson, Visiting Professor of Psychology at Gresham College said:
"Last minute Christmas shopping on the high street is a stressful experience.
Stress affects people in many ways, both physically and psychologically. Heart
rate and blood pressure rise, and there is an increase in anxiety,
distractibility, confusion and forgetfulness, all of which makes people more
likely to lose things, such as their bank cards, and be more at risk of theft."
Sarah Blaney, card fraud expert at CPP, said: "More and more consumers are aware
of the risks when shopping online and are vigilant about keeping their passwords
and personal details safe. However, we often get caught up in the hustle and
bustle of the high street: a combination of crowds and pressure to find the
perfect present can lead to our attention wandering.
"Retail fraud remains a problem despite the introduction of Chip and PIN
verification. In the first six months of 2009 it totalled nearly GBP 35m (3).
However, lost and stolen cards can be used to make illegal purchases online,
which is the largest type of card fraud totalling GBP 134m in the first half of
the year.
"It is important people protect their PIN numbers and check their receipts
against their bank statements on a regular basis. We all need to be responsible
to stop fraud. Card protection can give shoppers valuable peace of mind, helping
them to cancel and replace their cards immediately should the worst happen and
provide fraud victim support."
Key statistics
-- The average sum stolen from card fraud victims stands at GBP 623
-- A fifth of card fraud victims report having over GBP 1000 fraudulently
taken from their bank accounts
-- 65 per cent will be buying at least half of their gifts in person this
Christmas
-- 37 per cent will purchase the majority on the high street compared to 27
per cent online
-- 25 per cent of Brits are concerned that online orders won't arrive in
time for Christmas
-- 75 per cent find Christmas shopping stressful
-- 33 per cent admit they've lost track of spending over Christmas
-- 20 per cent don't check their receipts against bank statements
-- 10 per cent confess they have thrown away receipts containing card
details
Top tips fromCPPto help avoid being a victim of card fraud
1. Don't carry multiple debit/credit cards in a wallet - only carry the
essential cards you need
2. Don't leave belongings unattended while shopping
3. Don't carry debit/credit cards loose in a bag or pocket
4. If your cards are registered with a Card Protection company make sure you
have their emergency loss reporting number
5. Don't ever write down your PIN number
6. Don't let a shop assistant take your debit/credit card out of sight - they
could be copied or cloned
7. Don't let someone else take money out on your behalf
8. Check your receipts against your statements when you get home
9. If you are concerned your cards may have been lost or stolen, contact your
bank immediately to get the card cancelled
10. Make sure your bank has up-to-date contact details for you, including your
mobile phone number in case they need to check if transactions are genuine
For more information or to arrange a time for interview with identity theft
expert Sarah Blaney, please call Band & Brown Communications:
Eoghan Hughes - 020 7419 6976
Hester Decouz - 020 7419 7339
Notes to Editor
1. According to online research commissioned by CPP through Opinion Matters
among 1524 UK cardholders the average sum fraudulently taken following bank
cards being lost or stolen is GBP 623 - based on a sample of 100 card fraud
victims. Over the period December 2008 - January 2009, 36,356 cards were
lost out of 5.2 million CPP card customers. This amounts to 0.07%.
Extrapolating this to the UK population 0.07 per cent of the UK card
population is 0.07 x 45,000,000 = 315,000 victims.
2. Research among CPP's 5.2 million policyholders for Card Protection shows
that the last Friday before Christmas has been the day for the highest
number of cards lost and stolen over 2006, 2007 and 2008.
3. Figures according to Fraud - The Facts 2009 - http://www.cardwatch.org.uk
from APACS, the UK Payments Administration
Research Methodology
Online research was carried out by Opinion Matters amongst 1524 UK adults. The
research was conducted between the 18th and 23rd November 2009.
TheCPPGroup Plc
The CPP Group Plc (CPP) is an international marketing services business offering
bespoke customer management solutions to multi-sector business partners designed
to enhance their customer revenue, engagement and loyalty, whilst at the same
time reducing cost to deliver improved profitability.
This is underpinned by the delivery of a portfolio of complementary Life
Assistance products, designed to help our mutual customers cope with the
anxieties associated with the challenges and opportunities of everyday life.
Whether our customers have lost their wallets, been a victim of identity fraud
or looking for lifestyle perks, CPP can help remove the hassle from their lives
leaving them free to enjoy life. Globally, our Life Assistance products and
services are designed to simplify the complexities of everyday living whether
these affect personal finances, home, travel, personal data or future plans.
When it really matters, Life Assistance enables people to live life and worry
less.
Established in 1980, CPP has 11 million customers and more than 200 business
partners across Europe, North and South America and Asia Pacific and employs
2,000 employees who handle 16 million consumer sales and service conversations
each year.
In 2008, Group revenue was GBP 259.5 million, an increase of more than 15 per
cent over the previous year. This is more than five times the sales level of
2000.
What We Do:
CPP provides a range of assistance products and services that allow our business
partners to forge closer relationships with their customers.
We have a solution for many eventualities, including:
-- Insuring our customers' mobile phones
-- Protecting the payment cards in our customers' wallets and purses,
should these be lost or stolen
-- Providing assistance and protection if a customer's keys are lost or
stolen
-- Providing advice, insurance and assistance to protect customers against
the insidious crime of identity fraud
-- Offering advice to people considering legal action and cover for the
costs involved in taking action on a range of legal issues
-- Assisting customers with their travel emergencies
-- Monitoring the credit status of our customers
CPP is an award winning organisation:
-- Finalist in the National Insurance Fraud Awards, Counter Fraud
Initiative of the Year category, 2009
-- Finalist in the European Contact Centre Awards, Large Team and Advisor
of the Year categories, 2009
-- Named in the Sunday Times 2008 PricewaterhouseCoopers Profit Track 100
-- Finalists in the National Business Awards, 3i Growth Strategy category,
2008
-- Finalist in the National Business Awards, Business of the Year category,
2007, 2009 and Highly Commended in 2008
-- Named in the Sunday Times 2006, 2007, 2008 and 2009 HSBC Top Track 250
companies
-- Regional winner of the National Training Awards, 2007
-- Winner of the BITC Health, Work and Well-Being Award, 2007
-- Highly Commended in the UK National Customer Service Awards, 2006
-- Winner of the Tamworth Community Involvement Award, 2006. Finalist in
2008
-- Highly Commended in The Press Best Link Between Business and Education,
2005 and 2006. Winner in 2007
-- Finalist in the National Business Awards, Innovation category, 2005
For more information on CPP click onwww.cpp.co.uk
Sunday 6 December 2009
Fake job sites demand credit card details
Some recent graduates are being targeted by credit card fraudsters who use fake job sites as a front for their activities, new analysis suggests.
Tough labour market conditions have led jobseekers to be at greater risk of encountering such a scam, the Guardian reported.
Commonly, victims are offered an attractive-sounding opportunity but are then told that their CV needs minor amendments, which can be made by the "recruiter" in exchange for a fee.
Credit card details are then demanded, whether to pay for the service itself or to "confirm" the jobseeker's identity.
Speaking to the newspaper, 2008 graduate Oliver Mernick-Levene told of his experience with a job site that offered a well-paid entry level post.
He was subsequently contacted by a site representative who offered to perfect his CV for a £99 charge.
Mr Mernick-Levene said: "He wouldn't tell me any more about the job or what was wrong with my CV.
"He was quite insistent about the money. He also asked lots of questions about my private data on the pretext of confirming my details."
The credit crunch and economic downturn have led to unemployment hitting a 14-year high.
Latest official labour market figures show that the UK's jobless total has reached 2.47 million.
Tough labour market conditions have led jobseekers to be at greater risk of encountering such a scam, the Guardian reported.
Commonly, victims are offered an attractive-sounding opportunity but are then told that their CV needs minor amendments, which can be made by the "recruiter" in exchange for a fee.
Credit card details are then demanded, whether to pay for the service itself or to "confirm" the jobseeker's identity.
Speaking to the newspaper, 2008 graduate Oliver Mernick-Levene told of his experience with a job site that offered a well-paid entry level post.
He was subsequently contacted by a site representative who offered to perfect his CV for a £99 charge.
Mr Mernick-Levene said: "He wouldn't tell me any more about the job or what was wrong with my CV.
"He was quite insistent about the money. He also asked lots of questions about my private data on the pretext of confirming my details."
The credit crunch and economic downturn have led to unemployment hitting a 14-year high.
Latest official labour market figures show that the UK's jobless total has reached 2.47 million.
Credit Card Fraudsters Target Costa Rican Businesses
Costa Rican businesses are the target of credit card fraudsters, preying on the unsuspecting with a merchant account, the ability to process credit cards in Costa Rica.
The transaction begins with an email that is for all purposes appears legitimate. Such was the case of the email received this past week by Avanti Limousine Services* in San José.
The client, a Felix Smith, with a UK email address, requests limousine services for his family and guests coming to Costa Rica. The request is for an entire week - seven days - of limo service.
Once the price is agreed upon, Mr. Smith says he is ready to pay. "I'm ready to pay the bills. Also want you to help me Charge another $2,500 to a travel agent who has issued my guests air flight ticket fare", says the reply email.
The email explains, " the $2,500 that will be sent to the agent is for the ticket fare for my guests which will be deduct from my credit card. Also, I'm compensating you with the sum of $300.00 for the transfer fee and for your efforts.
Please note that I should have given the travel agency my credit card for him to deduct the ticket funds but he told me that he doesn't have the facilities to charge or debit credit card , so that's why I bring my vote of confidence in you and I don't want you to betray the vote of confidence i put in you so I want you to transfer the funds to him after the money charge from my credit card has reflect in your account you can now make the transfer to the agent via western union. So, the charges you'll make on my credit card will be".
Mr. Smith, asks for approval of the condition before handing over his credit card, which he subsequently does in the following email, but claims that his scanner is not working and has no fax machine to the request for a copy of the credit card and ID.
In total, the the Avanti case, 10 separate credit numbers (3 Mastercard) and (7 Visas) are submitted, with specific instruction for the amount of each card to be charged, claiming credit limits.
Pablo Alvarado of ATH credit card processing in San José tells Inside Costa Rica that they have been waiting for Mr. Smith to surface again this year.
Mr. Alvarado informs that this the fifth report of this type of scam this year, saying that there may be others that have not been reported and that, in disbelief, some have fallen to this type of scam.
The key to detect the scam is the request to overcharge the account and remit to a third party, according to Alvarado.
But, the story does not end there.
Mr. Smith has personally called on four separate occasions, anxious to know if the cards have been processed, but never once concerned about the reservation confirmation for his family. The last time he called, he abruptly hung up when the word scam was first used.
ATH is investigating this latest attempt. According to Mr Alvarado, the first step is block the cards and check to see if there are any outstanding transactions by other businesses falling prey to the scam and the following up with the card issuing bank and the origin of the emails.
The transaction begins with an email that is for all purposes appears legitimate. Such was the case of the email received this past week by Avanti Limousine Services* in San José.
The client, a Felix Smith, with a UK email address, requests limousine services for his family and guests coming to Costa Rica. The request is for an entire week - seven days - of limo service.
Once the price is agreed upon, Mr. Smith says he is ready to pay. "I'm ready to pay the bills. Also want you to help me Charge another $2,500 to a travel agent who has issued my guests air flight ticket fare", says the reply email.
The email explains, " the $2,500 that will be sent to the agent is for the ticket fare for my guests which will be deduct from my credit card. Also, I'm compensating you with the sum of $300.00 for the transfer fee and for your efforts.
Please note that I should have given the travel agency my credit card for him to deduct the ticket funds but he told me that he doesn't have the facilities to charge or debit credit card , so that's why I bring my vote of confidence in you and I don't want you to betray the vote of confidence i put in you so I want you to transfer the funds to him after the money charge from my credit card has reflect in your account you can now make the transfer to the agent via western union. So, the charges you'll make on my credit card will be".
Mr. Smith, asks for approval of the condition before handing over his credit card, which he subsequently does in the following email, but claims that his scanner is not working and has no fax machine to the request for a copy of the credit card and ID.
In total, the the Avanti case, 10 separate credit numbers (3 Mastercard) and (7 Visas) are submitted, with specific instruction for the amount of each card to be charged, claiming credit limits.
Pablo Alvarado of ATH credit card processing in San José tells Inside Costa Rica that they have been waiting for Mr. Smith to surface again this year.
Mr. Alvarado informs that this the fifth report of this type of scam this year, saying that there may be others that have not been reported and that, in disbelief, some have fallen to this type of scam.
The key to detect the scam is the request to overcharge the account and remit to a third party, according to Alvarado.
But, the story does not end there.
Mr. Smith has personally called on four separate occasions, anxious to know if the cards have been processed, but never once concerned about the reservation confirmation for his family. The last time he called, he abruptly hung up when the word scam was first used.
ATH is investigating this latest attempt. According to Mr Alvarado, the first step is block the cards and check to see if there are any outstanding transactions by other businesses falling prey to the scam and the following up with the card issuing bank and the origin of the emails.
0% credit cards 'spread costs'
Tips for reducing Christmas spending have been offered by new analysis in the Daily Mirror.
The report suggested that taking out a 0% credit card helps to "spread the cost" of festive celebrations.
Setting a "sensible budget" for gift and festive food purchases, and sticking to it, was also recommended.
Commonly, a 0% credit card deal offers an initial interest-free period for new customers on both existing balances and new purchases.
However, the length of these deals can vary widely from provider to provider, so customers are advised to shop around before making an application.
Christmas costs can also ultimately spiral if card balances are not paid off within the interest-free period.
"Don't spend on a credit card unless you can afford to pay off what you spend in full," the Daily Mirror added.
Festive spending on UK high streets is likely to rise this year, with the recession apparently nearing its end.
Data for October 2009 from the British Retail Consortium showed that overall retail sales were up by 3.8% year-on-year.
The report suggested that taking out a 0% credit card helps to "spread the cost" of festive celebrations.
Setting a "sensible budget" for gift and festive food purchases, and sticking to it, was also recommended.
Commonly, a 0% credit card deal offers an initial interest-free period for new customers on both existing balances and new purchases.
However, the length of these deals can vary widely from provider to provider, so customers are advised to shop around before making an application.
Christmas costs can also ultimately spiral if card balances are not paid off within the interest-free period.
"Don't spend on a credit card unless you can afford to pay off what you spend in full," the Daily Mirror added.
Festive spending on UK high streets is likely to rise this year, with the recession apparently nearing its end.
Data for October 2009 from the British Retail Consortium showed that overall retail sales were up by 3.8% year-on-year.
Credit Cards - Charity credit cards - 'Convenient way to Donate' - 19/11/2009
Charity credit cards can offer a way of donating to a good cause, while receiving a competitive rate of interest, according to a price comparison website.
Although over half of all UK adults are donating to charitable causes, the recession has affected charity giving, with adults raising an estimated £9.9 billion for charity in 2008/2009; £1.3 billion down on 2007/2008 figures.
When taking out a charity card, the charity automatically receives a one off payment, after that most providers donate a percentage of everything you spend directly to the charity.
Breakthrough Breast Cancer offers a card with an APR of 15.9 per cent which donates £40 if the card is used within 90 days of opening the account. An additional 25p is given for every £100 spent thereafter.
Cards are also available for children's charities NSPCC and Unicef, as well as the British Heart Foundation. All the products make a contribution to their cause for every additional £100 spent on the card.
Peter Harrison, credit card expert at the price comparison site, said that using certain products can make donating easier at a time when people are struggling with their finances.
Although over half of all UK adults are donating to charitable causes, the recession has affected charity giving, with adults raising an estimated £9.9 billion for charity in 2008/2009; £1.3 billion down on 2007/2008 figures.
When taking out a charity card, the charity automatically receives a one off payment, after that most providers donate a percentage of everything you spend directly to the charity.
Breakthrough Breast Cancer offers a card with an APR of 15.9 per cent which donates £40 if the card is used within 90 days of opening the account. An additional 25p is given for every £100 spent thereafter.
Cards are also available for children's charities NSPCC and Unicef, as well as the British Heart Foundation. All the products make a contribution to their cause for every additional £100 spent on the card.
Peter Harrison, credit card expert at the price comparison site, said that using certain products can make donating easier at a time when people are struggling with their finances.
Personal data project to help credit card analysis
Credit card spending can be tagged and analysed through Mine. Credit card customers will be able to perform more detailed analysis of their personal spending patterns through advances in open-source tools, a technology expert has predicted.
Speaking to ZDNet.co.uk, Adriana Lukas said that the Mine project with which she is currently involved is developing new ways for customers to interact with their credit card and bank account data.
The scheme has already unveiled initial alpha code and hopes to release a freely-available HTML interface by the end of the month.
However, Ms Lukas also said that only a "moderately advanced technophile" will be able to set the service up for themselves.
Mine allows web users to capture and collate all of the data they generate through social networking websites, as well as their own "personal informatics" for financial affairs.
Ms Lukas added: "If you have a credit card statement or current account, you can tag each entry - whether it's groceries or travel - and analyse how much you're spending on it. And by mining data, you can add value that no-one else can, because it's yours and so you understand the context."
Latest figures from the Bank of England show that net credit card borrowing rose by £79m in the UK during October 2009.
Speaking to ZDNet.co.uk, Adriana Lukas said that the Mine project with which she is currently involved is developing new ways for customers to interact with their credit card and bank account data.
The scheme has already unveiled initial alpha code and hopes to release a freely-available HTML interface by the end of the month.
However, Ms Lukas also said that only a "moderately advanced technophile" will be able to set the service up for themselves.
Mine allows web users to capture and collate all of the data they generate through social networking websites, as well as their own "personal informatics" for financial affairs.
Ms Lukas added: "If you have a credit card statement or current account, you can tag each entry - whether it's groceries or travel - and analyse how much you're spending on it. And by mining data, you can add value that no-one else can, because it's yours and so you understand the context."
Latest figures from the Bank of England show that net credit card borrowing rose by £79m in the UK during October 2009.
Credit card holders and other web shoppers 'are protecting themselves more online'
Credit card holders who use their cards for online shopping and other web users are protecting themselves more against online fraud and other potential hazards, it has been reported.
More people are using the internet for purchases using credit cards or other payment methods, Get Safe Online 2009 has reported.
According to the study, 70 per cent of Brits make purchases online, compared to 61 per cent in 2007.
Garreth Griffith, head of UK risk management at PayPal, commented that people are much more likely to employ safe practises online than in the past.
"People are protecting themselves more, protecting their machines more [and are] more likely to behave safer on the internet," he stated.
Mr Griffith was responding to the Get Safe Online 2009 report, which also revealed that only 15 per cent of those polled admitted to opening email attachments from an unknown source compared to 17 per cent in 2008 and 24 per cent in 2007.
More people are using the internet for purchases using credit cards or other payment methods, Get Safe Online 2009 has reported.
According to the study, 70 per cent of Brits make purchases online, compared to 61 per cent in 2007.
Garreth Griffith, head of UK risk management at PayPal, commented that people are much more likely to employ safe practises online than in the past.
"People are protecting themselves more, protecting their machines more [and are] more likely to behave safer on the internet," he stated.
Mr Griffith was responding to the Get Safe Online 2009 report, which also revealed that only 15 per cent of those polled admitted to opening email attachments from an unknown source compared to 17 per cent in 2008 and 24 per cent in 2007.
Signature makes cards 'less secure'
SINGAPORE--Signature-based credit cards are increasingly deemed less secure and targeted to be phased out, with countries such as the United Kingdom and France opting for more secure alternatives. Visa Australia also recently announced a similar move.
According to Michael Araneta, senior manager of consulting and research at IDC's Financial Insights, signature-based cards have long been targeted to be phased out as they are not deemed to be secure. "Chip-based cards provide much better security features, or have more layers of security, than standard signature cards," Araneta said in an e-mail interview.
The U.K. and France have already adopted chip-based cards, alongside personal identification number (PIN), as the primary methods of authentication. According to a report by local news tabloid The New Paper, after switching to chip-based cards, the U.K. reported a 24 percent drop in counterfeit and fraud from lost and stolen cards in 2005.
Singapore will also move away from signature-based cards and utilize other technologies to secure credit card transactions.
The Monetary Authority of Singapore (MAS) said, after working with the payment card industry to review various security tools for combating cybercrime and card fraud, it has decided to phase in a program to enhance payment card security over the next two years.
"The key initiatives are the implementation of Dynamic Data Authentication (DDA) chip cards and dynamic authentication for card-not-present transactions, including transaction alert, customer activation of new or replacement cards and more rigorous detection and prevention of fraudulent card activities," a MAS spokesperson told ZDNet Asia in an e-mail.
These DDA chip cards will incorporate a latent PIN function, which can be activated when required, she said.
For now, financial institutions said they will comply with existing regulations stipulated by the MAS.
Loh Weiling, a spokesperson from American Express's Singapore office, said these regulations provide their cardholders with "appropriate security measures".
She added that the company operates in a "closed loop environment", with access to both merchant and customer data, and its fraud detection systems can react quicker to fraud trends,. This enables American Express to take preventive actions and keep the company's overall fraud rates low, compared to the industry average, she said in an e-mail interview.
Local financial institution OCBC Bank is also staying with MAS mandates. Andrew Wong, OCBC's head of information security, said the bank's measures are guided by the monetary authority's recommendations in "mitigating credit card frauds" such as skimming and online fraud.
"These recommendations include the implementation of EMV (Europay MasterCard and Visa) technology to replace magnetic strips, and One Time Password (OTP) for customer-not-present transactions," said Wong in an e-mail interview. He added that the bank will continue to review the latest technologies to ensure their customers' credit card transactions remain secure.
Australia taking lead
Visa Australia's decision to remove signatures and focus on chip and PIN systems by 2013 was part of a seven-point security initiative that also includes enhancing the security of online transactions, said Chris Clark, Visa's general manager for Australia and New Zealand.
"The time is right to take advantage of the new technologies available to work across the industry--with banks and merchants--to strengthen security across the board," he added.
Visa currently has no plans to deploy the system outside of Australia and into Asia, with the exception of perhaps New Zealand, said Judy Shaw, Visa's corporate relations manager for Australia, New Zealand and South Pacific.
"This plan addresses specific issues in the Australian marketplace…and [we] are consulting with the industry to develop a program for New Zealand," Shaw explained. "While there are commonalities, each marketplace addresses specific issues at different times…[and] others will do so when marketplace conditions require."
She added that Visa will roll out programs to educate the public before the full deployment, but noted that most Australians are already familiar with the PIN system. "Since June 2008, cardholders have had the option of signing or using a PIN on Visa credit or debit transactions, and there has been a very good uptake of PIN use," Shaw said.
IDC's Araneta welcomes Visa Australia's announcement of a timeline to migrate to chip and PIN systems, noting that it requires a "comprehensive and time-bound effort" to successfully complete the move. He said the country is again leading the way, "especially in the area of payments".
The analyst said, however, that the shift will entail significant costs to support areas such as the replacement of signature-based cards and issuing new chip-based ones, as well as changing existing payment infrastructure.
According to Michael Araneta, senior manager of consulting and research at IDC's Financial Insights, signature-based cards have long been targeted to be phased out as they are not deemed to be secure. "Chip-based cards provide much better security features, or have more layers of security, than standard signature cards," Araneta said in an e-mail interview.
The U.K. and France have already adopted chip-based cards, alongside personal identification number (PIN), as the primary methods of authentication. According to a report by local news tabloid The New Paper, after switching to chip-based cards, the U.K. reported a 24 percent drop in counterfeit and fraud from lost and stolen cards in 2005.
Singapore will also move away from signature-based cards and utilize other technologies to secure credit card transactions.
The Monetary Authority of Singapore (MAS) said, after working with the payment card industry to review various security tools for combating cybercrime and card fraud, it has decided to phase in a program to enhance payment card security over the next two years.
"The key initiatives are the implementation of Dynamic Data Authentication (DDA) chip cards and dynamic authentication for card-not-present transactions, including transaction alert, customer activation of new or replacement cards and more rigorous detection and prevention of fraudulent card activities," a MAS spokesperson told ZDNet Asia in an e-mail.
These DDA chip cards will incorporate a latent PIN function, which can be activated when required, she said.
For now, financial institutions said they will comply with existing regulations stipulated by the MAS.
Loh Weiling, a spokesperson from American Express's Singapore office, said these regulations provide their cardholders with "appropriate security measures".
She added that the company operates in a "closed loop environment", with access to both merchant and customer data, and its fraud detection systems can react quicker to fraud trends,. This enables American Express to take preventive actions and keep the company's overall fraud rates low, compared to the industry average, she said in an e-mail interview.
Local financial institution OCBC Bank is also staying with MAS mandates. Andrew Wong, OCBC's head of information security, said the bank's measures are guided by the monetary authority's recommendations in "mitigating credit card frauds" such as skimming and online fraud.
"These recommendations include the implementation of EMV (Europay MasterCard and Visa) technology to replace magnetic strips, and One Time Password (OTP) for customer-not-present transactions," said Wong in an e-mail interview. He added that the bank will continue to review the latest technologies to ensure their customers' credit card transactions remain secure.
Australia taking lead
Visa Australia's decision to remove signatures and focus on chip and PIN systems by 2013 was part of a seven-point security initiative that also includes enhancing the security of online transactions, said Chris Clark, Visa's general manager for Australia and New Zealand.
"The time is right to take advantage of the new technologies available to work across the industry--with banks and merchants--to strengthen security across the board," he added.
Visa currently has no plans to deploy the system outside of Australia and into Asia, with the exception of perhaps New Zealand, said Judy Shaw, Visa's corporate relations manager for Australia, New Zealand and South Pacific.
"This plan addresses specific issues in the Australian marketplace…and [we] are consulting with the industry to develop a program for New Zealand," Shaw explained. "While there are commonalities, each marketplace addresses specific issues at different times…[and] others will do so when marketplace conditions require."
She added that Visa will roll out programs to educate the public before the full deployment, but noted that most Australians are already familiar with the PIN system. "Since June 2008, cardholders have had the option of signing or using a PIN on Visa credit or debit transactions, and there has been a very good uptake of PIN use," Shaw said.
IDC's Araneta welcomes Visa Australia's announcement of a timeline to migrate to chip and PIN systems, noting that it requires a "comprehensive and time-bound effort" to successfully complete the move. He said the country is again leading the way, "especially in the area of payments".
The analyst said, however, that the shift will entail significant costs to support areas such as the replacement of signature-based cards and issuing new chip-based ones, as well as changing existing payment infrastructure.
Stronger sterling boosts credit cards abroad
People planning to use their credit cards during winter trips to America are likely to have their spending power increased by financial market trends, new analysis indicates.
A report from FairFX.com, a prepaid card provider, suggested that currency traders are currently "backing sterling" over the US dollar and expect the pound to extend its recent gains.
The dollar has been under pressure since last week due to the Federal Reserve's decision to keep interest rates at near zero and the release of worse-than-expected unemployment figures.
Sterling rose from just over $1.66 against the dollar to over $1.685 yesterday (November 9th), before falling to $1.67 today.
A consistently strengthening pound will prove to be good news for Britons planning to use credit cards abroad to make sterling-denominated payments.
Rishi Patel, head of FX Trading at FairFX.com said: "Traders are currently backing the Australian dollar, euro and sterling over the US dollar.
"The US dollar is trading lower across the board [and] sterling is also holding its ground against the euro."
Mr Patel added that another reason behind the pound's recent strength is the decision of the Bank of England (BoE) last week to extend its quantitative easing programme by £25bn, rather than the £50bn that had been expected by many analysts.
The surprise move has signalled to some investors that the BoE policymakers are more confident about the UK's economic prospects than had been initially thought.
A report from FairFX.com, a prepaid card provider, suggested that currency traders are currently "backing sterling" over the US dollar and expect the pound to extend its recent gains.
The dollar has been under pressure since last week due to the Federal Reserve's decision to keep interest rates at near zero and the release of worse-than-expected unemployment figures.
Sterling rose from just over $1.66 against the dollar to over $1.685 yesterday (November 9th), before falling to $1.67 today.
A consistently strengthening pound will prove to be good news for Britons planning to use credit cards abroad to make sterling-denominated payments.
Rishi Patel, head of FX Trading at FairFX.com said: "Traders are currently backing the Australian dollar, euro and sterling over the US dollar.
"The US dollar is trading lower across the board [and] sterling is also holding its ground against the euro."
Mr Patel added that another reason behind the pound's recent strength is the decision of the Bank of England (BoE) last week to extend its quantitative easing programme by £25bn, rather than the £50bn that had been expected by many analysts.
The surprise move has signalled to some investors that the BoE policymakers are more confident about the UK's economic prospects than had been initially thought.
Mobile phone credit card technology on its way
A development firm has indicated that people could be using their mobile phones as credit cards in the near future.
The Symbian Foundation said that Near Field Communications (NFC) technology will play a "key part" in the next-generation versions of the open-source Symbian operating system, Nokia Conversations reported.
S^3 and S^4, as the systems are known, will begin running on phones from late 2010.
NFC allows a device to perform tasks, such as making a payment, if it is held near or against a specially-adapted reader.
Therefore, phones enabled with the technology will be able to be used as credit cards.
They might also be "pre-loaded" with credit in the same way as the Oyster cards currently used on the London transport system.
"Right now there are 466 features being developed for S^3 and S^4," Nokia Conversations added.
"NFC plays a key part of the next generation of Symbian."
Scott Totzke, head of global security at BlackBerry makers Research In Motion, told V3.co.uk this week that he expects mobile phone payments to become "a reality" for many users over the next few years.
The Symbian Foundation said that Near Field Communications (NFC) technology will play a "key part" in the next-generation versions of the open-source Symbian operating system, Nokia Conversations reported.
S^3 and S^4, as the systems are known, will begin running on phones from late 2010.
NFC allows a device to perform tasks, such as making a payment, if it is held near or against a specially-adapted reader.
Therefore, phones enabled with the technology will be able to be used as credit cards.
They might also be "pre-loaded" with credit in the same way as the Oyster cards currently used on the London transport system.
"Right now there are 466 features being developed for S^3 and S^4," Nokia Conversations added.
"NFC plays a key part of the next generation of Symbian."
Scott Totzke, head of global security at BlackBerry makers Research In Motion, told V3.co.uk this week that he expects mobile phone payments to become "a reality" for many users over the next few years.
Low interest rates 'have helped put credit card spending above saving'
Credit card spending has been chosen over saving in the past due in part to low interest rates, it has been suggested.
Because interest rates have been very low, there has been little incentive for people to save money, director at motleyfool.co.uk David Kuo stated.
However, it is important that people do consider the long-term implications of saving money, the director continued.
He added that some people are beginning to realise that it can be worth saving money even if there are low interest rates.
People must also understand, he noted, that whereas in the past they might have put aside £95 if they wanted to save £100 and assume the remaining £5 would be made in a year on interest, now they must see that in order to save £100 they must put aside the full sum.
However, many consumers could decide to spend a bit more this year than last, the director of the Centre for Retail Research professor Joshua Bamfield has predicted.
He said that many consumers have had "12 months of deprivation" and are looking to spend more this Christmas.
Because interest rates have been very low, there has been little incentive for people to save money, director at motleyfool.co.uk David Kuo stated.
However, it is important that people do consider the long-term implications of saving money, the director continued.
He added that some people are beginning to realise that it can be worth saving money even if there are low interest rates.
People must also understand, he noted, that whereas in the past they might have put aside £95 if they wanted to save £100 and assume the remaining £5 would be made in a year on interest, now they must see that in order to save £100 they must put aside the full sum.
However, many consumers could decide to spend a bit more this year than last, the director of the Centre for Retail Research professor Joshua Bamfield has predicted.
He said that many consumers have had "12 months of deprivation" and are looking to spend more this Christmas.
Saturday 5 December 2009
HSBC and Barclays signal the worst is over
HSBC and Barclays, two of Britain’s biggest banks, have provided hard evidence that the worst of the financial crisis is over and the economy is pulling out of recession.
HSBC, the UK’s biggest lender, and Barclays both posted upbeat trading statements in which they claimed the rise in bad debts has peaked and profits are sustainable.
Michael Geoghegan, HSBC chief executive, said: “I believe that the biggest jolt has now passed through the global economy. But it is too early to claim victory, especially while unemployment is still rising in the West.”
Barclays resumed dividend payments for the first time in 15 months and said bad debts this year would be at the bottom end of earlier forecasts of £9bn-£9.6bn.
Both lenders were buoyed by a strong performance in their investment banks. Although HSBC did not disclose any numbers, it said the division “maintained its record performance for the year to date”. Barclays Capital posted pre-tax profits of £1.42bn for the first nine months of the year, helping the group to overall profits of £4.54bn.
The two divisions’ success will inflame the row over bonuses though, unlike Wall Street banks, neither bank revealed the current pay pool. Barclays said bonuses were accruing at a “broadly consistent” rate to prior years, which analysts estimate to be an average of £200,000 per investment banker. However, it confirmed that decisions were yet to be taken on how much would be paid out to staff.
Banks are facing a crackdown from the Financial Services Authority and are preparing to reduce the overall compensation pool and pay out less in cash and more in stock. Barclays is also talking to major investors over bonus pool levels ahead of its year-end decision.
Chris Lucas, finance director, said: “We will be fully compliant with the G20 rules in considering bonus amounts and we will be thinking of all our stakeholders – employees, shareholders and the broader community and we will be taking into account all of their views.”
The G20 rules require lenders to defer 40pc-60pc of bonuses over three years and pay at least half of that in shares, all of which should be subject to a clawback. Last week, the Government went further with Royal Bank of Scotland and Lloyds Banking Group by demanding that all bonuses for those on more than £39,000 be paid entirely in stock.
The pressure on banks to rein in their cash bonuses comes as regulators, including the FSA, demand banks rebuild their capital buffers. Barclays revealed that its core tier one ratio is 8.9pc and HSBC’s 9pc – higher than the current 8pc benchmark set by the FSA.
Bad debts at Barclays jumped sharply in the past nine months, by 65pc to £6.2bn, due to the deteriorating economy. However, the increase in provisions slowed in the past three months, which the bank said was a positive sign and suggested the worst may be over.
The improving outlook helped persuade Barclays to restart dividend payments with a 1p third quarter payout on December 11. It last announced a dividend in August last year.
Group pre-tax profits fell 19pc to £4.54bn, but last year’s numbers were flattered by an exceptional £1.5bn gain from the acquisition of Lehman Brothers’ US operation. Excluding exceptionals, Barclays’ pre-tax profits more than doubled from £2.05bn to £4.41bn for the nine months.
As expected, profits in the commercial UK retail banks “decreased significantly” due to the “current economic conditions”. Barclaycard, though, saw an improvement in profits largely due to a pick up in international business.
At HSBC, “profitability for the first nine months was stronger than our expectations at the start of the year [and] ahead of the comparable period in 2008”. The third quarter was also “significantly ahead” of the same quarter last year. It was helped by a marked improvement in its disastrous US personal lending division.
The US operation, which originated sub-prime mortgages and was one of the first into the crisis in late 2006, is now in liquidation and found “loan impairment allowances declined in the quarter – representing the first quarterly fall since the start of 2006”. “Driven by stabilised credit performance in the US, loan impairment charges have fallen to their lowest quarterly level for over a year,” HSBC added.
Credit cards is the only US personal finance division HSBC plans to retain, having ditched mortgage lending and car finance. HSBC said: “The cards business remained profitable through the last quarter despite difficult economic conditions and lower fees from reduced volumes. As a result of improved economic conditions, we plan to resume marketing spend to grow new card originations modestly in certain segments.”
On issues of regulation, Mr Geoghegan added: “The global banking industry is in a period of significant and necessary change. The need for strong, well capitalised banks is indisputable.” However, he warned against moving to quickly.
“If capital ratios are increased before Western economies have had the chance to stabilise, this could trigger a number of unintended consequences. These include a rise in the cost and a fall in the availability of credit, which would undermine the ability of the banking industry to play its full part in supporting economic recovery. It may also encourage regulatory arbitrage and the emergence of a shadow banking system, beyond the reach of regulation.”
HSBC, the UK’s biggest lender, and Barclays both posted upbeat trading statements in which they claimed the rise in bad debts has peaked and profits are sustainable.
Michael Geoghegan, HSBC chief executive, said: “I believe that the biggest jolt has now passed through the global economy. But it is too early to claim victory, especially while unemployment is still rising in the West.”
Barclays resumed dividend payments for the first time in 15 months and said bad debts this year would be at the bottom end of earlier forecasts of £9bn-£9.6bn.
Both lenders were buoyed by a strong performance in their investment banks. Although HSBC did not disclose any numbers, it said the division “maintained its record performance for the year to date”. Barclays Capital posted pre-tax profits of £1.42bn for the first nine months of the year, helping the group to overall profits of £4.54bn.
The two divisions’ success will inflame the row over bonuses though, unlike Wall Street banks, neither bank revealed the current pay pool. Barclays said bonuses were accruing at a “broadly consistent” rate to prior years, which analysts estimate to be an average of £200,000 per investment banker. However, it confirmed that decisions were yet to be taken on how much would be paid out to staff.
Banks are facing a crackdown from the Financial Services Authority and are preparing to reduce the overall compensation pool and pay out less in cash and more in stock. Barclays is also talking to major investors over bonus pool levels ahead of its year-end decision.
Chris Lucas, finance director, said: “We will be fully compliant with the G20 rules in considering bonus amounts and we will be thinking of all our stakeholders – employees, shareholders and the broader community and we will be taking into account all of their views.”
The G20 rules require lenders to defer 40pc-60pc of bonuses over three years and pay at least half of that in shares, all of which should be subject to a clawback. Last week, the Government went further with Royal Bank of Scotland and Lloyds Banking Group by demanding that all bonuses for those on more than £39,000 be paid entirely in stock.
The pressure on banks to rein in their cash bonuses comes as regulators, including the FSA, demand banks rebuild their capital buffers. Barclays revealed that its core tier one ratio is 8.9pc and HSBC’s 9pc – higher than the current 8pc benchmark set by the FSA.
Bad debts at Barclays jumped sharply in the past nine months, by 65pc to £6.2bn, due to the deteriorating economy. However, the increase in provisions slowed in the past three months, which the bank said was a positive sign and suggested the worst may be over.
The improving outlook helped persuade Barclays to restart dividend payments with a 1p third quarter payout on December 11. It last announced a dividend in August last year.
Group pre-tax profits fell 19pc to £4.54bn, but last year’s numbers were flattered by an exceptional £1.5bn gain from the acquisition of Lehman Brothers’ US operation. Excluding exceptionals, Barclays’ pre-tax profits more than doubled from £2.05bn to £4.41bn for the nine months.
As expected, profits in the commercial UK retail banks “decreased significantly” due to the “current economic conditions”. Barclaycard, though, saw an improvement in profits largely due to a pick up in international business.
At HSBC, “profitability for the first nine months was stronger than our expectations at the start of the year [and] ahead of the comparable period in 2008”. The third quarter was also “significantly ahead” of the same quarter last year. It was helped by a marked improvement in its disastrous US personal lending division.
The US operation, which originated sub-prime mortgages and was one of the first into the crisis in late 2006, is now in liquidation and found “loan impairment allowances declined in the quarter – representing the first quarterly fall since the start of 2006”. “Driven by stabilised credit performance in the US, loan impairment charges have fallen to their lowest quarterly level for over a year,” HSBC added.
Credit cards is the only US personal finance division HSBC plans to retain, having ditched mortgage lending and car finance. HSBC said: “The cards business remained profitable through the last quarter despite difficult economic conditions and lower fees from reduced volumes. As a result of improved economic conditions, we plan to resume marketing spend to grow new card originations modestly in certain segments.”
On issues of regulation, Mr Geoghegan added: “The global banking industry is in a period of significant and necessary change. The need for strong, well capitalised banks is indisputable.” However, he warned against moving to quickly.
“If capital ratios are increased before Western economies have had the chance to stabilise, this could trigger a number of unintended consequences. These include a rise in the cost and a fall in the availability of credit, which would undermine the ability of the banking industry to play its full part in supporting economic recovery. It may also encourage regulatory arbitrage and the emergence of a shadow banking system, beyond the reach of regulation.”
Selling endowment policies could help clear credit card debt
Financial providers in the UK have had to close one in five accounts because Britons have been unable to meet their monetary commitments, a new report has found.
Missing repayments can be damaging for consumers, but many of them are "burying their heads in the sand" over debt, Confused.com said.
With monetary commitments such as credit card balances piling up, many people could be concerned about the rising interest rates that often are attached to unsecured debt.
Indeed, some individuals may have considered moving their existing balance to a zero per cent credit card in the hope of staving off rising repayments.
Chris Radford, chief executive officer of aap, the UK's biggest buyer of endowment policies, said some of its customers with credit card debt had decided to sell their underachieving endowment policies to help raise the cash to pay off balances, rather than relying on further credit to keep on top of financial commitments.
The survey by Confused.com found that residents in Yorkshire are the worst offenders when it comes to having their accounts closed, with 35 per cent of accounts shut down by providers because of failure to keep up with repayments - exceeding the national average by 13 per cent.
In second place are Britons who live in the south-east, whilst the East Midlands is in third place for having accounts shut down.
Commenting on the findings, Joanne Garcia, head of credit cards at Confused.com, said: "Credit card users in all regions need to understand how damaging it can be to miss repayments. Whilst it may not seem like a big deal to miss a few payments here and there, credit providers - which include mortgage lenders - leave no stone unturned when it comes to checking a person's credit worthiness."
Mr Radford, from aap, said some of its customers with credit card debt had decided to sell their unwanted endowment policies in order to make headway clearing credit card balances.
He added that should aap make an offer to purchase an endowment policy, it will always pay more than the surrender value offered by the insurance company.
Missing repayments can be damaging for consumers, but many of them are "burying their heads in the sand" over debt, Confused.com said.
With monetary commitments such as credit card balances piling up, many people could be concerned about the rising interest rates that often are attached to unsecured debt.
Indeed, some individuals may have considered moving their existing balance to a zero per cent credit card in the hope of staving off rising repayments.
Chris Radford, chief executive officer of aap, the UK's biggest buyer of endowment policies, said some of its customers with credit card debt had decided to sell their underachieving endowment policies to help raise the cash to pay off balances, rather than relying on further credit to keep on top of financial commitments.
The survey by Confused.com found that residents in Yorkshire are the worst offenders when it comes to having their accounts closed, with 35 per cent of accounts shut down by providers because of failure to keep up with repayments - exceeding the national average by 13 per cent.
In second place are Britons who live in the south-east, whilst the East Midlands is in third place for having accounts shut down.
Commenting on the findings, Joanne Garcia, head of credit cards at Confused.com, said: "Credit card users in all regions need to understand how damaging it can be to miss repayments. Whilst it may not seem like a big deal to miss a few payments here and there, credit providers - which include mortgage lenders - leave no stone unturned when it comes to checking a person's credit worthiness."
Mr Radford, from aap, said some of its customers with credit card debt had decided to sell their unwanted endowment policies in order to make headway clearing credit card balances.
He added that should aap make an offer to purchase an endowment policy, it will always pay more than the surrender value offered by the insurance company.
Credit card users struggling to meet monthly bills
UK credit card customers are still struggling to cover their monthly bills even though the UK economy is showing some signs of recovery. While the headlines across the UK would indicate we are on the verge of an economic recovery, the situation regarding personal debt is one which will drag on for some time to come. Many people have overstretched themselves for the last few years and been at breaking point, in the good times, to cover their monthly outgoings. So how are they coping today?
Even though UK base rates have fallen to a historical low of 0.5%, and appear set to remain at this level for some time, UK credit card rates have moved higher and higher. Quietly, UK credit card companies are squeezing their customers to try and claw back as much money as possible which they have lost to the bad debtors. This is in turn causing more problems for those who were "comfortable" prior to the rate rises and creating something of a vicious circle in the UK credit card industry.
When you also consider that inflation is now making a comeback and the cost of living in the UK is set to move higher in the short to medium term, it would appear that more people will be squeezed harder in the short to medium term and bad debts in the credit card industry could continue to rise for some time to come.
Even though UK base rates have fallen to a historical low of 0.5%, and appear set to remain at this level for some time, UK credit card rates have moved higher and higher. Quietly, UK credit card companies are squeezing their customers to try and claw back as much money as possible which they have lost to the bad debtors. This is in turn causing more problems for those who were "comfortable" prior to the rate rises and creating something of a vicious circle in the UK credit card industry.
When you also consider that inflation is now making a comeback and the cost of living in the UK is set to move higher in the short to medium term, it would appear that more people will be squeezed harder in the short to medium term and bad debts in the credit card industry could continue to rise for some time to come.
Credit card spending 'changing'
Credit card firms are likely to become more open to debt management solutions as cardholders move to control their spending.
That is according to David Rodgers, managing director of the Debt Advice Foundation, who said that Britons' spending habits have already changed due to economic pressures and that providers will have to adjust their products accordingly.
He added that some routine practices related to borrowing are likely to change in the coming year as consumers become more conscious about debt.
"People who are currently credit card hopping from one zero interest deal to another are suddenly faced with interest payments increasing the amount of their debt, month by month," Mr Rodgers explained.
"The reduction in credit card spending by consumers in the last year has shown that habits are already changing. The habit of debt … is a habit we would like to see change within the next year."
Earlier this week, a report from accountancy firm PricewaterhouseCoopers suggested that credit cards are likely to be used as a form of payment rather than a borrowing tool in the coming years.
This is based on the fact that card borrowing in the UK has declined by 3% in the last 12 months, while the number of credit cards in circulation has fallen by 8%.
That is according to David Rodgers, managing director of the Debt Advice Foundation, who said that Britons' spending habits have already changed due to economic pressures and that providers will have to adjust their products accordingly.
He added that some routine practices related to borrowing are likely to change in the coming year as consumers become more conscious about debt.
"People who are currently credit card hopping from one zero interest deal to another are suddenly faced with interest payments increasing the amount of their debt, month by month," Mr Rodgers explained.
"The reduction in credit card spending by consumers in the last year has shown that habits are already changing. The habit of debt … is a habit we would like to see change within the next year."
Earlier this week, a report from accountancy firm PricewaterhouseCoopers suggested that credit cards are likely to be used as a form of payment rather than a borrowing tool in the coming years.
This is based on the fact that card borrowing in the UK has declined by 3% in the last 12 months, while the number of credit cards in circulation has fallen by 8%.
Young people 'popular target for credit card fraudsters'
It is crucial that people take steps to prevent their financial information from being compromised by identity thieves, it has been reported.
Britons are being urged to prevent their personal details from falling into the wrong hands.
In particular, CreditExpert - the ID fraud protection service from Experian - claims that young people need to take caution.
Research from the firm indicates that young single adults who typically live in shared rented accommodation and are on a reasonable income are at greatest risk of having their credit cards, bank accounts and other financial products compromised.
Single Britons in their 30s living in rented flats and "high-flying" graduates saving for a mortgage deposit are also among those deemed to be particularly susceptible to be targeted by such fraudsters.
The vulnerability was attributed to those who rent being popular targets for mail interception, a method often used by fraudsters to obtain people's details.
Darryl Bowman, director of CreditExpert, states: "Criminals are switching their focus from the wealthy to people whose details they can get hold of more easily. Because of this, each one of us needs to be aware of the dangers of ID fraud and take steps to protect our identity and stop thieves from getting access to our personal information."
Research from the firm also reveals that London is the nation's identity fraud capital, with those living in the city around four times as likely to be targeted by such crime than the average Briton.
In an effort to protect their UK accounts, CreditExpert points out that people should take the utmost care when throwing away bank statements, utility bills and other documents containing their personal details. Instead of simply throwing them away, they should be shredded.
The checking of credit reports on a regular basis for any signs of suspicious transactions was also recommended, while consumers should notify their bank if credit card statements and other mail they have been expecting does not arrive.
Meanwhile, credit best practice guidance from Lloyds TSB last month saw people urged to be careful about how much personal information they upload to social networking websites.
Britons are being urged to prevent their personal details from falling into the wrong hands.
In particular, CreditExpert - the ID fraud protection service from Experian - claims that young people need to take caution.
Research from the firm indicates that young single adults who typically live in shared rented accommodation and are on a reasonable income are at greatest risk of having their credit cards, bank accounts and other financial products compromised.
Single Britons in their 30s living in rented flats and "high-flying" graduates saving for a mortgage deposit are also among those deemed to be particularly susceptible to be targeted by such fraudsters.
The vulnerability was attributed to those who rent being popular targets for mail interception, a method often used by fraudsters to obtain people's details.
Darryl Bowman, director of CreditExpert, states: "Criminals are switching their focus from the wealthy to people whose details they can get hold of more easily. Because of this, each one of us needs to be aware of the dangers of ID fraud and take steps to protect our identity and stop thieves from getting access to our personal information."
Research from the firm also reveals that London is the nation's identity fraud capital, with those living in the city around four times as likely to be targeted by such crime than the average Briton.
In an effort to protect their UK accounts, CreditExpert points out that people should take the utmost care when throwing away bank statements, utility bills and other documents containing their personal details. Instead of simply throwing them away, they should be shredded.
The checking of credit reports on a regular basis for any signs of suspicious transactions was also recommended, while consumers should notify their bank if credit card statements and other mail they have been expecting does not arrive.
Meanwhile, credit best practice guidance from Lloyds TSB last month saw people urged to be careful about how much personal information they upload to social networking websites.
U.K. Bank Loan Write-Offs Hit Record Highs
LONDON -- Write-offs and other revaluations of sterling and foreign-currency loans by U.K. banks and building societies both marked record highs in the third quarter, underscoring the continuing challenges faced by financial institutions and the disincentives to extend more credit.
Write-downs of sterling loans jumped to £4.32 billion ($7.12 billion) between July and September from £3.61 billion between April and June, while write-offs of foreign-currency loans soared to £1.01 billion in the third quarter from £249 million in the second, data from the Bank of England Monday showed.
Both figures were the largest since the central bank began publishing the data series in March 1993.
Within sterling loans, the largest write-downs were made on individuals' credit-card debts, which accounted for £1.6 billion of the total. Also making a large contribution were write-offs on corporate loans, which reached £1.3 billion.
The rise in sterling-loan write-offs takes the total for the first three quarters of this year to £10.9 billion, already well over the total £9.3 billion seen in the 2008 calendar year.
Write-downs of sterling loans jumped to £4.32 billion ($7.12 billion) between July and September from £3.61 billion between April and June, while write-offs of foreign-currency loans soared to £1.01 billion in the third quarter from £249 million in the second, data from the Bank of England Monday showed.
Both figures were the largest since the central bank began publishing the data series in March 1993.
Within sterling loans, the largest write-downs were made on individuals' credit-card debts, which accounted for £1.6 billion of the total. Also making a large contribution were write-offs on corporate loans, which reached £1.3 billion.
The rise in sterling-loan write-offs takes the total for the first three quarters of this year to £10.9 billion, already well over the total £9.3 billion seen in the 2008 calendar year.
Charity credit cards offer way to donate during recession
The recession has seen a decrease in the number of Brits giving to charity, but there are ways of giving that will not leave them out of pocket, such as charity credit cards, moneysupermarket.com has said.
While more than half of UK adults have continued to donate to charity throughout the recession, charitable giving has fallen to £9.9billion in 2008/2009, down £1.3billion on 2007/2008 figures.
Moneysupermarket.com advises that there are a number of options available to those who with to donate, and that consumers should choose the best way for them.
One of the ways is choosing a charity credit card, which makes contributions to the chosen charity each time the card is used, in addition to a lump sum made the first time the card is used.
Charity credit cards are available through a number of providers, for a range of charities, so there is wide choice of causes for charitable consumers to choose from.
But charity credit cards vary in how much is donated to the charity, moneysupermarket warns, so consumers should be savvy about they way they give. For example, the initial donation upon the first use of the credit card can range from £10 to £50; the percentage of purchases which is donated also varies from one card to another.
Using a cashback credit card also offers a way of donating to charity, and could generate more money than a charity credit card, so consumers should compare deals before deciding which one to go for, the comparison website says.
Some cashback credit cards generate higher rewards than a charity credit card, for instance, which can then be donated to a charity of the cardholders choice, or a range of different charities instead of donations being tied to the same one.
Peter Harrison, credit card expert at moneysupermarket.com, said: "Charitable credit cards are an easy way of supporting a worthy cause, as all you have to do is use your card in the normal way.
He added that "Although rates are competitive, the return to charities can be much smaller than alternative methods of raising funds," so consumers should shop around.
While more than half of UK adults have continued to donate to charity throughout the recession, charitable giving has fallen to £9.9billion in 2008/2009, down £1.3billion on 2007/2008 figures.
Moneysupermarket.com advises that there are a number of options available to those who with to donate, and that consumers should choose the best way for them.
One of the ways is choosing a charity credit card, which makes contributions to the chosen charity each time the card is used, in addition to a lump sum made the first time the card is used.
Charity credit cards are available through a number of providers, for a range of charities, so there is wide choice of causes for charitable consumers to choose from.
But charity credit cards vary in how much is donated to the charity, moneysupermarket warns, so consumers should be savvy about they way they give. For example, the initial donation upon the first use of the credit card can range from £10 to £50; the percentage of purchases which is donated also varies from one card to another.
Using a cashback credit card also offers a way of donating to charity, and could generate more money than a charity credit card, so consumers should compare deals before deciding which one to go for, the comparison website says.
Some cashback credit cards generate higher rewards than a charity credit card, for instance, which can then be donated to a charity of the cardholders choice, or a range of different charities instead of donations being tied to the same one.
Peter Harrison, credit card expert at moneysupermarket.com, said: "Charitable credit cards are an easy way of supporting a worthy cause, as all you have to do is use your card in the normal way.
He added that "Although rates are competitive, the return to charities can be much smaller than alternative methods of raising funds," so consumers should shop around.
Millions of credit card holders 'are shopping more safely online'
Millions of people across the UK have started shopping more safely online this year using debit and credit cards, according to a report.
A total of 53 million debit and credit cards have now been registered with secure online payment systems MasterCard SecureCode and Verified by Visa.
This is a 112% increase on the 25 million cards registered this time last year.
However, debit and credit card holders shopping online can do even more to keep themselves safe, the UK Cards Association has suggested.
When using a debit or credit card to buy something from a website, especially for the first time, it is a good idea to look for the padlock symbol since it is a good indication that the site is reputable, the association suggests.
It is also important to log out after shopping online and saving a confirmation email as a record of orders made.
In related news, many consumers could choose to spend more money this Christmas than last, according to the director of the Centre for Retail Research, professor Joshua Bamfield.
A total of 53 million debit and credit cards have now been registered with secure online payment systems MasterCard SecureCode and Verified by Visa.
This is a 112% increase on the 25 million cards registered this time last year.
However, debit and credit card holders shopping online can do even more to keep themselves safe, the UK Cards Association has suggested.
When using a debit or credit card to buy something from a website, especially for the first time, it is a good idea to look for the padlock symbol since it is a good indication that the site is reputable, the association suggests.
It is also important to log out after shopping online and saving a confirmation email as a record of orders made.
In related news, many consumers could choose to spend more money this Christmas than last, according to the director of the Centre for Retail Research, professor Joshua Bamfield.
Credit card companies closing accounts due to repayment failures
Consumers are having their credit card accounts closed due to a lack of repayments.
Consumers in the UK who do not keep up with required payments on their credit cards or personal loans may see the accounts shut down, new research suggests.
Conducted by Confused.com, the report showed how credit card issuers cited a failure to make repayments as the reason for the closure of more than one-in-five accounts across the country.
However, people in Yorkshire may be having more trouble than most in meeting bill deadlines for plastic products, seeing 13 per cent more cases of credit card companies closing accounts when balances are not settled.
Credit card issuers in the north-east and East Anglia on the other hand are finding that only eight per cent of accounts are having to be closed due to repayment failures, according to the research.
Joanne Garcia, head of credit cards at Confused.com, said: "Credit card users in all regions need to understand how damaging it can be to miss repayments. While it may not seem like a big deal to miss a few payments here and there, credit providers … leave no stone unturned when it comes to checking a person's credit worthiness.
"If they see a history of non-payments it makes it much more difficult to borrow money."
Financial advice website moneysupermarket.com recently found that nearly one-third of plastic users plan to delay making repayments for the next six months, risking having to shell out for the increased credit card charges.
This is despite the news that major credit card issuers such as
Consumers in the UK who do not keep up with required payments on their credit cards or personal loans may see the accounts shut down, new research suggests.
Conducted by Confused.com, the report showed how credit card issuers cited a failure to make repayments as the reason for the closure of more than one-in-five accounts across the country.
However, people in Yorkshire may be having more trouble than most in meeting bill deadlines for plastic products, seeing 13 per cent more cases of credit card companies closing accounts when balances are not settled.
Credit card issuers in the north-east and East Anglia on the other hand are finding that only eight per cent of accounts are having to be closed due to repayment failures, according to the research.
Joanne Garcia, head of credit cards at Confused.com, said: "Credit card users in all regions need to understand how damaging it can be to miss repayments. While it may not seem like a big deal to miss a few payments here and there, credit providers … leave no stone unturned when it comes to checking a person's credit worthiness.
"If they see a history of non-payments it makes it much more difficult to borrow money."
Financial advice website moneysupermarket.com recently found that nearly one-third of plastic users plan to delay making repayments for the next six months, risking having to shell out for the increased credit card charges.
This is despite the news that major credit card issuers such as
AXA: 24 % of UK adults hiding some form of debt from partners
A fresh study released by giant insurer AXA has shown that at an estimated 24% of UK adults are hiding some form of debt from their partners, friends and family. The research, which explores the psychosomatic profile of the indebted British consumer, revealed that the majority of adults prefer visiting their dentists rather than seek the service of a financial adviser.
Researchers also found that one in every 10 British men would rather have minor surgery than face their financial problem by seeking professional debt help.
According to AXA, the findings of the study show that British consumers are overwhelmed by “the three ‘I’s”; inertia, ignorance and immediate gratification. It also pictured British adults as reluctant to seek professional assistance for their financial woes and confusion on how to face the problem.
The result of the study came as the latest government statistics revealed that the total personal debt of UK individuals stood at £1,458bn as of end of October.
Total consumer credit lending to individuals was placed at £228bn in the same period. The annual growth rate of consumer credit continued to fall to – 0.1%. Average household debt in the UK is ~ £9,120 (excluding mortgages). This figure increases to £21,210 if the average is based on the number of households who actually have some form of unsecured loan.
Eugene Farrell, a behavioural specialist at AXA commented, “The study proves that resistance to money management runs deep and it seems that we may even be pre-programmed to stick our heads in the sand.”
Psychologists explained that the human brain is wired to any change, preferring to look for familiar models instead of finding new routes, in a bid to save energy and mental capability.
AXA estimates that the “secret” debts of British adults which they are trying to keep from their families and friends may reach £50 billion. Most of these debts are credit card, loans, and other forms of debt.
Individual hidden debts are placed at £4,000 each for every individual, the research found.
Researchers also found that one in every 10 British men would rather have minor surgery than face their financial problem by seeking professional debt help.
According to AXA, the findings of the study show that British consumers are overwhelmed by “the three ‘I’s”; inertia, ignorance and immediate gratification. It also pictured British adults as reluctant to seek professional assistance for their financial woes and confusion on how to face the problem.
The result of the study came as the latest government statistics revealed that the total personal debt of UK individuals stood at £1,458bn as of end of October.
Total consumer credit lending to individuals was placed at £228bn in the same period. The annual growth rate of consumer credit continued to fall to – 0.1%. Average household debt in the UK is ~ £9,120 (excluding mortgages). This figure increases to £21,210 if the average is based on the number of households who actually have some form of unsecured loan.
Eugene Farrell, a behavioural specialist at AXA commented, “The study proves that resistance to money management runs deep and it seems that we may even be pre-programmed to stick our heads in the sand.”
Psychologists explained that the human brain is wired to any change, preferring to look for familiar models instead of finding new routes, in a bid to save energy and mental capability.
AXA estimates that the “secret” debts of British adults which they are trying to keep from their families and friends may reach £50 billion. Most of these debts are credit card, loans, and other forms of debt.
Individual hidden debts are placed at £4,000 each for every individual, the research found.
Hold on to your credit cards... Monday to be busiest day of online shopping this year
If you don't get round to reading this until Monday morning then the chances are you can now recite your credit card number backwards and/or your debit dealings have just made your bank account a good few pounds lighter.
Monday 30 November is, according to Northwich-based The Hut Group, set to the busiest day of the online shopping year, with a predicted 1,750 sales a minute passing through the UK's virtual tills.
The phenomenon that Hut has christened 'Mega Monday' (also, coincidentally, the name of the deals it advertises at the beginning of each week through its sites such as Zavvi) is taking place due to the alignment of the last pay day prior to Christmas with the fact that weekly sales tend to increase on Mondays.
Hut, which provides e-tail platforms for household names such as Argos and Asda, is claiming that the pre-festive period will be a record breaking time for the group, with 5m packages expected to be shipped out in the coming month.
Recent research produced on behalf of Kelkoo predicted that online retail spend would reach £8.9bn this Christmas, equating to 20% of all UK sales.
The same study, undertaken by the Centre for Retail Research, stated that, if present growth rates continue, by December 2015 online sales will account for over 50% of all Christmas shopping.
Monday 30 November is, according to Northwich-based The Hut Group, set to the busiest day of the online shopping year, with a predicted 1,750 sales a minute passing through the UK's virtual tills.
The phenomenon that Hut has christened 'Mega Monday' (also, coincidentally, the name of the deals it advertises at the beginning of each week through its sites such as Zavvi) is taking place due to the alignment of the last pay day prior to Christmas with the fact that weekly sales tend to increase on Mondays.
Hut, which provides e-tail platforms for household names such as Argos and Asda, is claiming that the pre-festive period will be a record breaking time for the group, with 5m packages expected to be shipped out in the coming month.
Recent research produced on behalf of Kelkoo predicted that online retail spend would reach £8.9bn this Christmas, equating to 20% of all UK sales.
The same study, undertaken by the Centre for Retail Research, stated that, if present growth rates continue, by December 2015 online sales will account for over 50% of all Christmas shopping.
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