The Finance Factor

Hundreds of thousands of customers banking with Abbey have failed to have money transferred into their accounts due to a technical error.

The problem occurred in the early hours of Wednesday morning, which led to many bank accounts facing delays in receiving money transferred such as salaries and benefits.

Abbey, has apologised for the error and has assured customers that they will have charges lifted that were applied as a result of a late transfer.

It said direct debits and standing orders would still leave customers’ abbey bank accounts with no charges levied.

“We are urgently processing these payments and some payments have already credited to accounts this morning. The remainder are being processed now,” an Abbey spokesman said. Continue reading ‘Abbey customers face late payments due to technical fault’ »

Offshore banking has always been seen as the province of the rich and famous with accounts in tax havens such as Jersey, Switzerland and the Bahamas.

Certainly the image of the well-heeled or criminal classes flying off in private jets to stow their treasures in banks in glamorous locations, with the keys to their exclusive safety deposit boxes, does nothing to dispel this image.

However, technically, offshore banking simply refers to anyone with a bank account outside his or her country of origin, typically in a low-tax area. In recent years increased property prices have led to individuals with normal jobs and salaries left with large profits from the sale of property to deposit, and therefore such accounts have become more commonly owned.

The advantages of offshore banking are that it may provide those living in an unstable political climate to invest their money safely overseas. It can also offer offshore companies, trusts or foundations specific tax advantages.

However, the disadvantages can be that in the event of a financial banking crisis, offshore accounts can be less financially secure, leading to depositors having to wait a long time for compensation. Offshore jurisdictions are also frequently remote and costly to get to; though today this is less important, due to immediate online and telephone banking facilities. Continue reading ‘Offshore banking’ »

A fraudulent exporter can obtain your money by using fake shipping documents.

A common L/C scam: a fraudulent seller sends fake shipping documents to the opening or advising bank to prove that the goods were shipped. In fact, the goods never left the sellers warehouse or, more likely, never existed at all. Other documents like the invoice, packing list, export declaration, even Certificate of Origin can be easily produced by the scammer. In many L/Cs the only documents needed for the L/C to be paid are the invoice and shipping documents. If the seller’s bank believes that the papers are authentic and pays the scammer, the buyer will never see the goods and will spend much time in discussions with his bank.

How to protect yourself?

Always ask the seller to fax you the drafts of all the papers which are supposed to be sent to the bank. Check them carefully. Most of the shipping lines have online tracking system, where by entering the container number you can see when the cargo actually left the port and to which destination. If all looks acceptable, ask the seller to issue the originals and send copies to you by fax or e-mail. By B/L number you can always trace any shipment. Continue reading ‘Letter of Credit Fraud: Fake Documents’ »

The term Mobile Banking sounds like it means being able to bank while on the go – and in a sense that’s just what it does mean. You see the way we handle our money has changed dramatically in the last 50 years. It used to be that we kept our money in our wallets and took it with us everywhere we went so we could buy our groceries, clothes, sundries, etc. In the last couple decades we started carrying plastic with us everywhere we went and less cash. But now we’re changing again and that’s where mobile banking comes in.

In today’s world, it’s not so much that we carry our money around with us as we expect our money to follow us around everywhere we go. It’s not enough to write a check at the grocery store, we also want to know our balance before we spend. It’s not enough to merely whip out a credit card or debit card at the dry cleaners, we want to choose which bank account we use to pay with. And we don’t want to pay bills just at our kitchen tables anymore; we want to pay them when we’re riding the train into work each day too.

To accomplish all of this bank’s have had to turn to mobile telecommunication devices. Most financial institutions have been furiously writing software that makes their financial services available on these devices so they can compete with each other. The result has been that you can do your banking with just about any national bank or Savings and Loan and make purchases, receive account alerts, make deposits, transfer money, and even complete very complex investment transactions all on your cell phone. Continue reading ‘What is Mobile Banking?’ »

Criminals are scoring top marks for their devious ways. Automated teller machine (ATM) fraud involving close personal contact tends to be opportunistic and ranges from serious violent crime to carefully orchestrated plans to defraud victims without their knowledge. Know the facts so that you can avoid becoming another unwitting victim.

Jammed Card Readers

Tampering with an ATM card reader so your card gets stuck in the slot is one of the simplest and most passive methods of ATM fraud used. Unfortunately, you will only become aware of it once you have finished transacting and realise that your card cannot be retrieved. By this stage it is quite likely that the fraudsters will have seen your personal identification number (PIN) while you were entering it, either over your shoulder or with a hidden camera or even binoculars. As soon as you leave the ATM and go look for assistance, the fraudsters will move in, remove the card and withdraw money from your account.

How to protect yourself: There have been reports of criminals installing tiny cameras above ATM machines to allow them to see clients’ PIN codes. Always be cautious when entering your PIN at the ATM or point-of-sale. Make sure that no-one is watching and try to shield the keypad with your body or your hand so no-one can see it. Continue reading ‘How to Prevent ATM Fraud’ »

It’s no secret: the varieties of bank accounts available to consumers are many, and banks will often extend a number of special offers and account deals to gain more customers. As a result, it can be confusing for consumers to choose a bank – as well as an account – that’s right for them. However, there are a set of guidelines that can help consumers secure an account that suits their specific needs.

To begin, you need to choose a bank to host your bank accounts. There are many ways to go about doing this – from seeking referrals and suggestions to researching products and customer service ratings for various banks. But one of the most common requirements for many consumers looking to open bank accounts is accessibility – that is, to do business with a bank that has a branch near them, and which is easily accessible from other locales. Many people will narrow their choices down to a few banks in their area, then proceed to researching each of those banks.

Most banks offer savings, current and business accounts – so you’re likely to find the type of bank accounts you’re after at a number of different banks. There’s a great deal of information – whether in the form of official statistics or customer forums – online, to help you get an idea of customer service offerings for each bank. Another way to research a bank in detail is to visit a branch in person, in order to speak with a representative – which also gives you a good opportunity to start enquiring about the types of accounts they offer.

Continue reading ‘What to Look for in Your Bank Accounts’ »

Lloyds Banking Group are the next major bank to reveal losses after releasing the first half year figures from 2009. The group has put the mounting losses down to its acquisition of HBOS, which took place in January.

The firm made a £4billion loss from January to June this year, which was worse than originally expected, after the value of all assets were recorded but the total cash equivalent amounted to less than previously anticipated.

The banking group, which is part-nationalised – 43% owned by the state, took on £13.4billion, the majority of which was made up of bad loans, with 80% of this belonging to HBOS.

But it has said that it expects results to show signs of improvement in months to come.

Lloyds shareholders can grasp some comfort in knowing that most of the poor quality loans taken on by the group are now being insured by taxpayers, so that the taxpayer would foot the bill for any further losses as opposed to the bank.

Continue reading ‘Lloyds reports £4bn in losses for 2009’ »

According to new research carried out by financial group Moneyfacts, almost 50% of all current accounts offered to consumers provide no return on their money.

The number of accounts paying no returns at all has risen from 19% recorded a year ago, to 49%. The new figures have also shown that current accounts paying 0.10% or less now constitute to 83% of the market, compared to 57% 12 months ago.

Over the last year, the average rate of interest paid on current accounts has fallen from 1.54% to 0.71%. However, in the same period, the average overdraft rate has increased from 12.99% to 13.2%. “current accounts are the most widely used accounts, yet is is surprising how many people are reluctant to switch in order to get a better deal,” said James Booker, a spokesperson for Which4U.

Continue reading ‘Fall in returns offered on Current Accounts’ »

The Bank of England has today announced plans to inject a further £50billion through its quantitative easing programme – a process used to help stimulate the economy by putting more money into circulation.

The new plans will increase total spendings to £175billion, exceeding the £150billion limit first set by the chancellor.

The rate setters said in a statement that the recession “appears to have been deeper than previously thought”.

They also made the decision to freeze interest rates at 0.5% for the fifth consecutive month, the lowest rate ever recorded.

A number of people in the markets were surprised by the Monetary Policy Committee’s (MPC) decision to expand the programme.

The announcement had a negative effect on the pound, losing recent gains against the dollar to fall by over a cent to $1.6830.

Mervyn King, Bank of England governor, was obliged to ask the chancellor for permission to extend the programme beyond its original £150billion limit, to which Alistair Darling accepted.

Stephen Timms, financial secretary to the Treasury, said he thought extending the programme was the right thing to do.

Continue reading ‘Bank of England to inject £50bn into economy’ »

The increase in global business and travel means more and more people are moving around for business, and indeed pleasure, purposes. Regardless of why you are travelling, money is an essential item for your trip so you should investigate international banking options before jetting off.

An international bank is similar to a bank found in the United Kingdom in terms of the services offered. Payment accounts, debit cards and lending opportunities are all part of international banking. Personal and corporate accounts are generally available when banking internationally so both individuals and companies can benefit.

There are an abundance of reasons why individuals and companies opt to bank internationally with tax rules generally ranking high on the list. The tax rules that govern offshore accounts differ from those of bank accounts within the United Kingdom.

Interest accrued on an offshore savings account is paid gross without income tax being deducted. Interest paid on the gross amount amounts to more, thereby producing a more sizeable final payout.

Continue reading ‘The Ins and Outs of International Banking’ »