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New mis-selling scandal could be ‘bigger problem’ than PPI

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A new mis-selling scandal, centring on interest rate protection products, know as swaps, could be a “bigger problem” for banks than payment protection insurance (PPI), which has seen them pay out £22 billion.

An investigation by The Independent has suggested that Lloyds Bank, which remains partly owned by the government, could face a £5 billion bill because of mis-selling swaps, with other UK banks being similarly affected.

The investigation argues that estimates of the scale of the scandal have focused on interest-rate hedging products (IRHPs), sold mostly to small and medium sized enterprises (SMEs). However, when ‘sophisticated’ clients are factored in the costs could be much higher than previously estimated.

The newspaper worked on the investigation with analysts, who have not been named. One analyst explained. “This is potentially a bigger problem for UK banks than PPI. Profits from PPI sales somewhat offset the £22 billion the banks were forced to pay out in compensation. But profits on swap directivities could be dwarfed by high settlement costs.”

The Financial Conduct Authority (FCA) identified failings in the way some bank sold IRHPs in 2012. The product is designed to offer predictability on interest loan repayments. However, many clients faced high costs when trying to exit the deal when interest rates hit an all time low because of the financial crisis.

Following a review by the FCA nine banks, including HSBC, Co-op and Santander, have set aside money to cover the costs of having to get out of the products.

Commenting on the findings, Charlotte Webster from responsible banking campaign Move Your Money, said, “The latest mis-selling scandal demonstrates that public-owned Lloyds remains right at the bottom of Britain’s banking barrel. The mis-selling of swaps to SMEs is just another illustration of quite how unethical and self-serving the bank really is. Very disappointingly, it looks as if this could be another industry wide issue.”

Lloyds has recently been accused of short-changing PPI victims by using a loophole. The bank, which has called on the FCA to put a time limit on PPI payout, has reportedly saved more than £60 million by assuming customers who were wrongly sold single-premium PPI polices would have bought a cheaper, regular PPI policy instead.

Photo: Howard Lake via Flickr  

Further reading:

Lloyds unveils package to boost credit union sector

Lloyds to launch share offer for retail investors

Lloyds Banking Group apologises and says card problems now rectified

Lloyds pressures regulator for PPI payout time limit

Lloyds accused of short-changing PPI victims

Economy

A Good Look At How Homes Will Become More Energy Efficient Soon

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energy efficient homes

Everyone always talks about ways they can save energy at home, but the tactics are old school. They’re only tweaking the way they do things at the moment. Sealing holes in your home isn’t exactly the next scientific breakthrough we’ve been waiting for.

There is some good news because technology is progressing quickly. Some tactics might not be brand new, but they’re becoming more popular. Here are a few things you should expect to see in homes all around the country within a few years.

1. The Rise Of Smart Windows

When you look at a window right now it’s just a pane of glass. In the future they’ll be controlled by microprocessors and sensors. They’ll change depending on the specific weather conditions directly outside.

If the sun disappears the shade will automatically adjust to let in more light. The exact opposite will happen when it’s sunny. These energy efficient windows will save everyone a huge amount of money.

2. A Better Way To Cool Roofs

If you wanted to cool a roof down today you would coat it with a material full of specialized pigments. This would allow roofs to deflect the sun and they’d absorb less heat in the process too.

Soon we’ll see the same thing being done, but it will be four times more effective. Roofs will never get too hot again. Anyone with a large roof is going to see a sharp decrease in their energy bills.

3. Low-E Windows Taking Over

It’s a mystery why these aren’t already extremely popular, but things are starting to change. Read low-E window replacement reviews and you’ll see everyone loves them because they’re extremely effective.

They’ll keep heat outside in summer or inside in winter. People don’t even have to buy new windows to enjoy the technology. All they’ll need is a low-E film to place over their current ones.

4. Magnets Will Cool Fridges

Refrigerators haven’t changed much in a very long time. They’re still using a vapor compression process that wastes energy while harming the environment. It won’t be long until they’ll be cooled using magnets instead.

The magnetocaloric effect is going to revolutionize cold food storage. The fluid these fridges are going to use will be water-based, which means the environment can rest easy and energy bills will drop.

5. Improving Our Current LEDs

Everyone who spent a lot of money on energy must have been very happy when LEDs became mainstream. Incandescent light bulbs belong in museums today because the new tech cut costs by up to 85 percent.

That doesn’t mean someone isn’t always trying to improve on an already great invention. The amount of lumens LEDs produce per watt isn’t great, but we’ve already found a way to increase it by 25 percent.

Maybe Homes Will Look Different Too

Do you think we’ll come up with new styles of homes that will take off? Surely it’s not out of the question. Everything inside homes seems to be changing for the better with each passing year. It’s going to continue doing so thanks to amazing inventors.

ShutterStock – Stock photo ID: 613912244

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IEMA Urge Government’s Industrial Strategy Skills Overhaul To Adopt A “Long View Approach”

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IEMA, in response to the launch of the Government’s Industrial Strategy Green Paper, have welcomed the focus on technical skills and education to boost “competence and capability” of tomorrow’s workforce.

Policy experts at the world’s leading professional association of Environment and Sustainability professionals has today welcomed Prime Minister Teresa May’s confirmation that an overhaul of technical education and skills will form a central part of the Plan for Britain – but warns the strategy must be one for the long term.

Martin Baxter, Chief Policy Advisor at IEMA said this morning that the approach and predicted investment in building a stronger technical skills portfolio to boost the UK’s productivity and economic resilience is positive, and presents an opportunity to drive the UK’s skills profile and commitment to sustainability outside of the EU.

Commenting on the launch of the Government’s Industrial Strategy Green Paper, Baxter said today:

“Government must use the Industrial Strategy as an opportunity to accelerate the UK’s transition to a low-carbon, resource efficient economy – one that is flexible and agile and which gives a progressive outlook for the UK’s future outside the EU.

We welcome the focus on skills and education, as it is vital that tomorrow’s workforce has the competence and capability to innovate and compete globally in high-value manufacturing and leading technology.

There is a real opportunity with the Industrial Strategy, and forthcoming 25 year Environment Plan and Carbon Emissions Reduction Plan, to set long-term economic and environmental outcomes which set the conditions to unlock investment, enhance natural capital and provide employment and export opportunities for UK business.

We will ensure that the Environment and Sustainability profession makes a positive contribution in responding to the Green Paper.”

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