BEWARE! THE BANKS ARE OUT TO GET YOU!

[Tizer]

A similar sort of cunning wheeze is perpetrated by certain rich people living in the Channel Islands except in their case it concerns companies selling leasehold retirement properties which have rapidly increasing ground rents and can't be sold easily then the owner dies. Instead of one company they operate under a large number of company names. When one gets `outed' in the news they can just close it down and transfer the properties to one their other companies. I'm not using the name because the said persons are extremely litigious and also very good at keep their activities under wraps and forcing deletion of stuff about them from the Web.

[Stanley]

I have an idea to whom you are referring (for he had been to night school). I've been listening to the tales of extortion for a while now. Leases have always struck me as dangerous things.... Ground Rent we used to call it.

[Stanley]

I think this is the right place for what happened yesterday..... As many of you know already, my house was owned by my youngest daughter Janet. When she became ill last year I realised that there was no way she would be able to deal with the small matter of the Building Insurance on the property so I declared her incompetent to the insurance company and we agreed that the best course was for me to pay the premium. So far so good, Janet was not imposed on and the insurance was in place. My broker Swinton, has always had difficulty dealing with an overseas customer, their system didn't recognise that this was possible and for years I have had the annual round of phone calls and explanations. During the last year they have installed a new system and I had to spend a long time getting them up to speed and agreeing that in view of the fluid situation the simplest way of ensuring cover was for me to pay again, the only change being that the policy would be in the name of 'Exors of Janet Graham'. Again, so far so good. The policy came due and I rang them to renew it when I got the notice. The agent I spoke to had to be appraised of the situation again but agreed to accept the payment of the premium and so I paid and was assured that the insurance was in place. Phew!
But, not five minutes later I got a phone call from another agent who wanted to let me know the insurance was due. He had no notes on the system and knew nothing about the situation so I had to explain all over again and tell him that the insurance had been renewed. In the end he checked and once more assured me that the insurance was in place and I would receive the documentation very shortly.
Now we come to the bit that really annoyed me. He started to explain to me why the confusion had arisen and had great difficulty in understanding why was not interested in this. All I wanted was assurance that the insurance was in place. What struck me on reflection was the fact that their new system doesn't seem to be any better than the old one in that there were no explanatory notes on it. Also the fact that both the agents were more interested in conforming to their system and covering their backs instead of keeping it simple and simply helping me, the client, to get my insurance. There was a lack of clarity of thought and focus on the task in hand, writing the policy and accepting payment. I can't help thinking that this episode demonstrates many of the faults we see reported on the site in all aspects of dealing with the public.
Sorry about that but it all reinforces my contention that there is a deep level of incompetence and misunderstanding embedded in our modern world at all levels.... End of rant!

[Stanley]

See THIS for a Reuters report on what is expected to be a massive claim on Amazon for back tax. What intrigues me is that the reason for the imposition is not because Amazon were avoiding paying tax on its trading in the Principality but on an obscure legal transgression because Luxembourg gave them a special deal not open to other capital holders which gave them an 'unfair advantage'. I would have thought that the real problem was the company avoiding paying VAT in countries where they were actually trading.

[Tizer]

Sorry about that but it all reinforces my contention that there is a deep level of incompetence and misunderstanding embedded in our modern world at all levels.... End of rant!

Agreed. The engineer who visited me yesterday from BT was a good man ground down by a terrible organisation. He spent as much time having to record his actions and replying to phone calls from his boss checking up on him as he did on the actual job.

[Stanley]

It's very common Tiz. That's why I contrast the days before cell phones when I was incommunicado all day in the wagon and my boss had to trust my judgement and good sense.
I watched an interesting programme last night in which bankers talked about the move to a cashless society and the importance attached to card and contactless payments. One of the main drivers is that as no cash is paid and it is painless non-cash buyers tend to buy more and this increases consumption. Done this way the banks get a cut of every transaction of course and perhaps more important, access to 'big cash data' which a lady from the Financial Times described as 'The New Oil'.

[Tripps]

For the first time, I've just heard the words "Open Banking" on Radio 4, Paul Lewis programme. Seems it starts next year - which is not far off.

Checked out google, and all the links it threw up seem to be industry related, with nothimg from the consumer side of things. Seems it starts next year, and will enable lots of organisations to have full access to our banking affairs. Lots of work seems to have been done on it without the punter being aware. This is surely deliberate, and it will be presented to us a a 'good thing' and too late to reverse it? I can't find a link that I'd recommend, but it's worth a look.

My immediate reaction is of course Luddite - ' no way will I allow that' - but then I think of direct Debits which in a small way already allow it, and I've come to no harm from that. I also took some convincing that cash machines were safe.

We have been warned about banks and 'big data' often on here from Stanley and his clever daughter. I think we should take heed.

[Tizer]

I heard it on Paul Lewis's Money Box too. The banks are past masters at arrogance when it comes to ignoring the effects of their projects on the public. Trying to eliminate cheques was an example - they just went ahead and did it. Mind you, Google are known for that too.

[Stanley]

David, it was news to me as well. You are right of course re. DD payments but if and when I am asked I shall refuse it. At least I won't have thrown my door wide open. What I think we shall see is an increase in direct marketing rather like the targeted ads you get after buying on Amazon.
Tiz is right as well, we are no longer clients of the bank but data points and therefore an asset. They should be paying us!
On a similar subject, did you listen to the R4 programme made by Barbara after being bombarded by requests from charities?

[Tizer]

but if and when I am asked I shall refuse it.

You don't expect them to ask your opinion or give you a choice, do you?

[Stanley]

From what Paul Lewis said I got the impression that the banks were sending letters out to inform that it is happening but giving the choice of an opt-out. We shall see.....

[Stanley]

Have a read of THIS report on the latest advice from the IMF on progressive taxation. They say that there is no evidence that taxing the super-rich more heavily damages economies. This will be music to the ears of anyone who read and understood the thesis of Piketty's book on 21st Century Capital. He was quite specific, their must be a global wealth tax. If it is not introduced to stem the flow of capital into the coffers of the top 1% it will starve the economies and increase the already growing income gap. Trump and his supporters are not going to like this, they help finance the IMF and this is directly contrary to his tax plans.

[Stanley]

Lots of comment this morning about the 10% year on year rise in unsecured domestic lending on credit cards and more recently the new car leasing methods. An interest rise is on the cards very shortly and this is a potential last straw for some heavily indebted households. There is also comment about young people in particular in that many of them think that borrowing is the normal way of running finances. It has never been easier to borrow, a couple of swipes on a mobile phone can get an immediate loan but often at crippling interest rates in excess of 1300% APR. This horrifies people of my generation but is the norm for the young. Look at the amount pay day lenders spend on TV advertising and new lenders appear regularly. It must be a profitable market!
An interesting theory appeared this morning for the reason why Boeing is so worried about Bombardier. They are looking for new investors and could possibly hook up with the Chinese aerospace manufacturers. The worry is that this could open up new technologies to the Chinese and kick start their abilities and capacity. A Chinese equivalent of Boeing would be the ultimate nightmare.

[Tizer]

Yes, here's the BBC page on that warning.
`Financial regulator warns of growing debt among young people' LINK
"The chief executive of the Financial Conduct Authority has warned of a "pronounced" build up of debt among young people. In an interview with the BBC, Andrew Bailey said the young were having to borrow for basic living costs. The regulator also said he "did not like" some high-cost lending schemes. He said consumers, and institutions that lend to them, should be aware that interest rates may rise in the future and that credit should be "affordable". The head of the FCA was talking to the BBC as part of its 'Money Matters' coverage, looking at the issues of credit and debt in the UK.".......
It's probably made even worse because many young people now have to take on a massive debt from age 18 when they become a student. The Government is actively contributing to the debt crisis. I don't know if it's true but I read that the Student Loans Company is trying to boost the debts because it can then get a better return when it sells the debts on to another business.

Talking about China and Bombardier another thought surfaced. President Sis has announce a new capital city is to be built for Egypt. It will house 6.5 million people and have the tallest buildings in Africa. Where is the money coming from? China of course!

[plaques]

Not wishing to make light of the debt problem but I tend to look at in a similar way to alcoholism, its not something that you actively chose to do but something you slide into. The initial debt may seem perfectly reasonable, Student loan, mortgage and even a car then comes the nice to haves which are part of today's living standards. Sometimes 'pay nothing for 2 years, sort of offer. When the financial situation then changes and the weekly payment can't be met its so easy to roll the debt over until it gets totally out of hand. In the absence of some other adult guidance, parents, family members who are in a position to really help then the debt can escalate to a point of ruining lives. A starting point, although not without its problems, would be to stop the roll over option. Easier said than done but at least a start.

[Stanley]

Tiz, did you see the section of the report that named seaside towns like Scarborough as having the highest rates of bankruptcy in the UK? The reason being that indebted people are taking that option at £90 to get the debt off their backs. Another little fact about Scarborough emerged, it has the lowest average wage in the country......
P, I'm sure you're right. Like any other addiction the key is that it's easier to succumb than fight it but I suppose the first step is to realise that you have a problem and that's where support from any quarter is important. We had good support and were used to doing without, things were different then. We didn't think we had any right to luxuries like holidays or even carpets! Another advantage was that we weren't bombarded by advertisements like the one that tells you "You're worth it!" Today we have the Kardashian culture which peddles hedonism and ridiculously conspicuous consumption. A dead give-away of this element of society is the fact that many riots trigger looting of shops selling high end consumer goods. Today, a common measure of worth is the ability to consume and it's corroding society. This is what enables the banks and loan companies to make squillions out of gullible customers. Rather than address the disease, the 'system' tends to offer ways out like Voluntary Debt Reduction Agreements as this facilitates increased consumption and profit. How long can it continue? When does the music stop?

[chinatyke]

Tiz, did you see the section of the report that named seaside towns like Scarborough as having the highest rates of bankruptcy in the UK? The reason being that indebted people are taking that option at £90 to get the debt off their backs.

I think you are a bit off the mark with 90 quid. It was 550 quid court fees when I helped my sister with her bankruptcy in 2012 + another 175 quid paid to the court which she later reclaimed.

[PanBiker]

It's not full bankruptcy China but a debt relief order.

Citizens Advice - Debt Relief Orders (DRO's)

[Stanley]

Tht's right Ian. China it's described as bankruptcy but as Ian says is simplified. It has the same general effect and drawbacks, £90 cost was quoted in the programme.

[chinatyke]

Thanks, Ian and Stanley. When my sister was forced to declare bankruptcy several years ago, we consulted a solicitor who declared her firm didn't handle that work because there was no money and advised us to get the forms from the court and do it ourselves. We did this and made the submission. The first question the County court judge asked my sister was where did she get the money for the court fees. From her big brother of course! It struck me at the time that over 700 quid in cash (no cheques allowed for obvious reasons) was a lot to find by someone making an application because they had no money!

It sounds like these Debt Relief Orders are a get-out-of-jail-free card. Pile up your debts to over twenty thousand and then pay ninety quid to relinquish them.

[Stanley]

That's about the size of it China and some of the debts are very frivolous in my eyes but in the end what does society do? Let them starve in the gutter.....?

[chinatyke]

That's about the size of it China and some of the debts are very frivolous in my eyes but in the end what does society do? Let them starve in the gutter.....?

... Or send them to Debtors Prison and let them work off their debts.

http://vcp.e2bn.org/justice/page11365-debtors.html

[Tripps]

From the link above -
"Until 1970 it was technically possible to be imprisoned for being in debt and unable to pay".

It was more than 'technically possible' it was quite common. In 1968 I learned that someone I knew was in Strangeways Prison for debt. I went to visit him - thought it would be an interesting life experience. It was.

The amount he owed was 'worked off ' at so much a day (I can't remember the figures) until it was 'paid off'. He did no actual work, and was in the cell for 23 hrs a day. He had only a seven day old Daily Mirror to read. He asked me to contact someone who he thought would pay what he owed and get him released. My memory of the detail is hazy, but I think I went for the cash, and paid it over. I think he was released next day after the formalities had been completed. It was Easter time, and bizarrely, public holidays did not count in the calculation.I was told that technically he still owed the money, but 'they' never came after you if you'd done the time.

It's a memory which has stayed with me - especially people watching in the waiting room. Quite obvious that the poor and the unintelligent formed most of the clientele.

[Stanley]

China, Why stop there? You could bring back the treadmill and picking oakum......
David, quite! I've seen mentions even now of people being in gaol because of debt, not paying the TV license has been mentioned. Are these urban myths?
See THIS for the FCA report on debt. It's a grim picture and the curve on the graph is downwards as inflation exceeds wage growth and so many are technically 'in work' but with below living standard wages, no security and worse in-work benefits than we had in our generation. One phrase in the report struck me, that those without a university education tend to be more satisfied.
What also struck me was a comparison with the indebtedness of France, Greece and Italy as a proportion of GDP. The surprise being that France is higher than we are.
See this weeks Private Eye for a profile of be-Leave, an organisation pushing for hard Brexit. Some very dodgy characters in there!

[Tripps]

Not urban myths , but becoming rarer. Seems the prison was for not paying the fine rather than not having a licence. I seem to recall that a fairly recently, a very high proportion of women in prison was for this 'offence' TV licence

Looks like my memory of the Strangeways waiting room still applies. The BBC licence system seems to be rapidly becoming an anachronism. I think I cold happily manage without the BBC.

I don't have to pay for a licence now - being of the pampered, triple locked, pensioner caste.