Internet ban for just 3 illegal downloads

Film and music fans who illegally download material will be cut off from the internet under Government plans to tackle online piracy.  Under proposals to be unveiled next week, users suspected of wrongfully downloading films or music will be first sent a warning email telling them to stop.  more >>

Gas guzzlers are hit with £25 C-charge

London Mayor Ken Livingstone today announced a tripling of the congestion charge for ‘Chelsea tractors’ to £25 a day – the equivalent of £6,500 a year.  The 90% discount for zone residents owning gas-guzzlers (band G vehicles) will also be scrapped – meaning they will have to pay the full amount wherever they live.  more >>

Savers should beware as rates fall

Interest rates are coming down on many savings accounts following the Bank of England cut on Thursday.  But although the base rate fell by just a quarter of a percentage point, the rates on some savings accounts have come down by far more.  Newcomer Kaupthing Edge, however, has thrown down the gauntlet by declaring that it will not cut the 6.5% rate on its table-topping easy-access account. ICICI, which pays 6.41% to HiSave customers, Bradford & Bingley (6.40%) and Icesave (6.40%) have yet to reveal whether they have the stomach for a fight.  Watch this space!

Mortgage lenders rush to cut rates

Within hours of the Bank’s announcement at noon, nine of the top ten lenders said they would pass the full quarter-point cut to their borrowers.  Only the stricken Northern Rock did not move its rates following the decision to bring down rates from 5.5% to 5.25%.  The ‘rush to cut’ follows criticism of banks and building societies for ripping off mortgage holders after the last rate reduction just before Christmas.  About 20% of lenders did not pass on the whole of the December decrease to hard-pressed borrowers.  The rate cut will help only the minority of borrowers, roughly one in five, who have a mortgage with a variable interest rate.  About 50% of homeowners have a fixed-rate loan which will not be affected.

Bank cuts interest rates to 5.25%

The Bank of England cut interest rates on Thursday by a quarter point to 5.25 percent despite calls for a half-point cut.  The widely expected quarter point cut by the Central Bank was modest compared to the recent cuts made by the US Federal Reserve (1.25% points last month alone).  The Bank’s move will be welcomed by many mortgage borrowers, but homeowners who do not have a mortgage deal directly linked to the base rate may be disappointed as some lenders have been increasing their own rates in anticipation of a cut.  The decision by the Bank of England’s Monetary Policy Committee comes as more evidence emerges of a slowdown in economic growth both in the UK and overseas.

I got carried away, says SocGen’s rogue trader

The Frenchman accused of being behind a £3.7bn bank fraud admitted on Tuesday: ‘You lose your sense of the sums involved when you are in this kind of work. It’s disembodied. You get a bit carried away.’  While working as a £75,000-a-year trader for Societe Generale, France’s second biggest bank, Jerome Kerviel was gambling up to £37bn – more than his bank’s worth.  It is alleged that he circumvented internal controls with stolen computer access codes and fictitious documents.  However, he told investigators that the bank must have known what he was doing because of the profits he had generated previously, and suggested his bosses ‘turned a blind eye’ as long as he was not in the red.  His losses were revealed by the bank on January 24.  He was arrested a few days later but released on bail within 48 hours after being charged with breach of trust, using false documents and unauthorised computer access.

Newcomer Kaupthing offers 6.5% to online savers

Icelandic-owned Kaupthing Edge, an online savings provider, has become the latest foreign bank to launch an account aimed at British savers.  The instant-access savings account which pays 6.5% gross rivals that of ICICI Bank’s HiSave account at 6.41% (which has stayed at the top for a long while).  Savers must first open the instant-access account with a minimum of £1,000 before they can take advantage of Kaupthing’s fixed rates while ICICI HiSave only requires £1.  It also offers a six-month fixed-rate bond at 6.8% gross and a 12-month fixed-rate bond at 6.86% gross.  Kaupthing is regulated by the Financial Services Authority and as such savers’ cash up to £35,000 is protected under the Financial Services Compensation Scheme if the bank were to run into difficulties.  Kaupthing also guarantees that the rate on its instant-access account, which is variable, will not be less than 0.3 of a percentage point above the base rate until February 2012.

Egg crackdown on 160,000 customers

Egg annouced it was forced to make an unprecedented move to curb overspending after a review revealed 160,000 customers had a ‘higher than acceptable risk profile’.  The cardholders received letters within days warning them their Egg credit cards will stop working in 35 days’ time.  Those with a higher risk would typically mean people who spend over their credit limit or fail to make minimum repayments.  However, Egg’s actions backfired when hundreds of those affected say they settle their debts every month and incur none of the bank charges which make money for Egg.  But the lender defended the move, saying the ‘risk review’ was carried out after the banking giant Citigroup bought Egg last year and the decision was not prompted by the credit crunch.  The Office of Fair Trading has yet to receive a complaint. But sources indicated an investigation would be launched within days if a sufficient response is received from customers.