Bridging Finance News

Andrew Manley has taken over as an interim chief executive of Defence Estates, the property arm of the Ministry of Defence.

Andrew Manley is currently the Commercial Director of Defence Estates and he will be acting as the interim chief executive until autumn, when the strategic defence review will take place.

A permanent appointment for the position of Chief Executive is not in the offing right now since changes in the business plan are likely to occur during the autumn review.

The permanent Under Secretary of the Ministry of Defence sent around a general notice to all staff instating Andrew Manley as the acting Chief Executive. One of ministry’s spokesman said, “We will rerun an open competition in the autumn with a new remit based on the reviews which are currently in train as part of the strategic defence and security review.”

Recently, Andrew Manley became a board member. He offers expert advice on ‘major commercial challenges facing the organization’.

Find a range of bridging loans on our website for your property needs.

Banking giant, Lloyds TSB, has won a significant court case, which has already been dubbed ‘landmark’ by finance and legal professionals alike.

It is thought that the victory will put an end to a number of ways consumers can challenge the enforceability of debts that relate to Payment Protection Insurance (PPI).

As reported in www.credittoday.co.uk, a judge decided to hear the PPI case in the High Court, in order to set a binding judgement for the county courts, where most PPI cases are head.

He dismissed four separate claims brought against Black Horse Finance, a subsidiary of Lloyds, by consumer David Speak, who had defaulted on a PPI policy contained in a loan of £5,000.

Speak claimed that Black Horse mis-sold the PPI as compulsory, had misrepresented the product at point of sale, was in breach of insurance conduct of business rules, and had breached the 1974 Consumer Credit Act by creating “an unfair relationship between lender and borrower”.

Judge Waksman ruled against all these claims, deciding that the testimony of the Black Horse PPI saleswoman was more consistent than the testimony provided by Speak.

This landmark ruling means that future claims concerning PPI can only be brought against banks on grounds of misrepresentation at an individual point of sale.

David Bowden, senior litigation lawyer at Lloyds TSB, speaking with Credit Today, said: “Not only have we won but we have set a precedent in the high court that county court judges are going to have to follow.”

PPI has been a controversial topic in the last couple of years, with tales of mis-selling rife and over 13,500 consumer complaints lodged with the Financial Ombudsman Service between April and June of this year alone. 81% of these complaints have been upheld and a number of banks have been landed with huge FSA fines for PPI mis-selling.

In most PPI cases banks have tried to settle with the customers before the case is brought to court, but Bowden said the Lloyds “dug their heels in on this”.

Following the decision Lloyds announced that it would no longer be selling PPI.

Industry experts have speculated that other banks will soon follow Lloyds TSB in ceasing PPI sales alongside loans and credit cards, although it’s expected that it will remain in place for mortgages.

Former footballer and Scotland captain, Colin Hendry, is being investigated by police following a claim of fraud against him.

Two former friends of the Blackburn and Rangers star told police that he borrowed £95,000 from them just before he went bankrupt with debts of £2.2 million.

It was reported back in March that Hector and Williamina McFarlane were in the process of suing Hendry over his failure to pay back the sizeable loan.

However, the footballer, of Lytham, Lancashire, then entered bankruptcy proceedings and the couple went to the police.
Hector MacFarlane, 61, told Scottish newspaper, the Daily Record: “Colin Hendry borrowed £95,000 from us and then proceeded to go bankrupt.

“After looking at all the correspondence and paperwork about this loan, we were advised to go to the police. This we have done.”

The couple, who used to be Hendry’s neighbours, are demanding to know the state of the footballer’s finances when they agreed to lend him cash.

They also complained that Hendry’s daughter, Rheagan, sent them a threatening message on Facebook.

20 year-old Rheagan Hendry, who is five months pregnant, has admitted that she sent the message but never threatened “physical abuse”.

According to press reports, the message to Williamina McFarlane stated: “You started it and I will very much end it for both of you.”

Lancashire Police confirmed that they were investigating the fraud claims and alleged threat, although Rheagan told the paper that police have not contacted her yet.

The McFarlanes were once close friends of the Hendry family, and supported the footballer after the death of his wife, Denise, last July from complications caused by a botched liposuction surgery.

It is thought that Hendry began to suffer financial problems last year when he was forced to give up work in order to take care of his wife, before her tragic death.

Members of the Royal Bank of Scotland Group were yesterday handed a £5.6m fine by the FSA for failing to have adequate systems and controls in place to prevent breaches of UK financial sanctions.

UK firms are prohibited from providing financial services to persons on the HM Treasury sanctions list. The Money Laundering Regulations 2007 (the Regulations) require that firms maintain appropriate policies and procedures in order to prevent funds or financial services being made available to those on the sanctions list.

During 2007, the Royal Bank of Scotland Group processed the largest volume of foreign payments of any UK financial institution. However, between 15 December 2007 and 31 December 2008, RBS Plc, NatWest, Ulster Bank and Coutts and Co, which are all members of the group, failed to adequately screen both their customers, and the payments they made and received, against the sanctions list.

The regulator stated that this resulted in an ‘unacceptable’ risk that the banking group could have facilitated transactions involving sanctions targets, including terrorist financing.

The FSA said that the group’s failings in relation to its screening procedures were particularly serious because of the risk they posed to the integrity of the UK financial services sector.

This is the biggest fine imposed by the FSA to date in pursuit of its financial crime objective. It is also the first fine imposed by the FSA under the Regulations.

Margaret Cole, FSA director of enforcement and financial crime, said: “The involvement of UK financial institutions in providing funds, economic resources or financial services to designated persons on the sanctions list undermines the integrity of the UK’s financial services sector. By failing to screen relevant customers and payments against the HM Treasury sanctions list, the Royal Bank of Scotland Group left itself open to the risk that it was facilitating terrorist financing.”

Commenting on the historic fine, Linksfield Technologies, a specialist in providing technology to the financial services sector, said that the FSA’s action carried implications for many other financial institutions.

Linksfield Director, Dr Larry Shapiro, said: “Today’s action underlines the importance now being attached to this area by the authorities, following on from the FSA’s report in April 2009 and HM Treasury’s recent draft terrorist asset-freezing bill in March 2010.

“Many don’t realise that this new asset-freezing bill will require financial firms to conduct retrospective checks on all clients that they’ve dealt with during the last five years.”

Linksfield has software that it claims can be a solution for financial firms trying to keep on top of the ever-changing sanctions list – according to Dr Shapiro it can change 3 times in a single day in extreme cases and, on average, 5-7 times a month.

The Financial Sanctions Register (FSR) Checker automates the checking of the financial sanctions list, and is already used by many financial institutions in order to comply with legal obligations in line with the Third Money Laundering Directive.

Dr Shapiro says that as well as providing a full evidence trail to demonstrate precisely what checks were done when, the FSR Checker also provides advanced “fuzzy matching” algorithms for key name and address fields – since individuals and companies listed on the register often try disguise their true identity and alter documents.

He added: “This first fine by the FSA is hugely significant, since many financial institutions we speak with have not believed that the FSA is serious about them needing to do these checks.”

The FSA’s Margaret Cole backed this up, saying: “The scale of the fine shows how seriously the FSA takes this issue and should act as a warning to other firms to ensure that they have adequate screening procedures.”

In a final note, the watchdog added that as the Royal Bank of Scotland Group agreed to settle at an early stage of the FSA investigation, it qualified for a 30% reduction in penalty. The FSA would have otherwise imposed a financial penalty of £8 million.

Fraudulent insurance claims are at a record high according to new figures released by the Association of British Insurers (ABI).

Over 2,300 false insurance claims are made every week in the UK which totals up to more than £16 million.

The ABI’s figures reveal that in 2009 the number of detected fraudulent insurance claims rose by 14% in comparison to the previous year’s figures. A total of 122,000 bogus claims were uncovered last year, valued at £840 million.

Motor insurance frauds were the most expensive in 2009, amounting to £410 million in false claims. Home insurance was the most common, which accounted for nearly half (62,000) of the total number of detected false claims in 2009.

Fraudsters put forward 8,500 liability claims last year, where the majority lied to claim personal injury insurance. Similar to 2008, figures showed that 4% of all claims by cost were fraudulent, but this is double the figure from five years ago.
 
The rise in personal debt and the huge financial pressures that families are facing are the main factors for the startling rise in insurance frauds, according to an ABI spokesperson.

Some of the most incredulous cases included a man who alleged he had fractured his hand after tripping over a pothole in the street, when in fact he had punched a wall during a domestic argument.

In another case, a young female suspected of shoplifting injured herself from jumping down some stairs while running away from security guards, yet told her insurer that she had tripped over a loose pavement. 
Nick Starling, the ABI’s director of general insurance and health, said that the high number of false claims means that honest insurance holders have to pay more.:
“Reducing fraud remains an ongoing battle for the insurance industry. Our honest customers rightly object to having to pay higher premiums to subsidise the fraudulent minority, which is why insurers continue to up their game in the war on the cheats,” he said.
“Whether claiming against a third party for bogus personal injury or on their own insurance, fraudsters are more likely than ever to get caught, leading to more expensive and harder to obtain insurance and credit, and the possibility of a criminal record.”