Tuesday, 9 July 2013

Race to save Britain's oak trees

Race to save Britain's oak trees from mystery disease that's 'bleeding them to death'... and the colourful beetle that could be to blame

  • Thousands of oaks have already been affected by a mysterious disease
  • It can kill the ancient trees within four years
  • Government has ordered a huge survey across Britain to track the threat

Mail on Sunday
Under threat: A classical country scene with a large Oak in the Lake District National Park near Hawkshead
Under threat: A classical country scene with a large Oak in the Lake District National Park near Hawkshead
The Government is spending £1.1 million on an emergency project to save ancient English oaks from a mysterious disease that is causing the trees to ‘bleed to death’.
Thousands across the UK have already been infected, with the disease so serious that oaks are being felled and their bark stripped and burnt to prevent it spreading.
One theory is that a beetle may be responsible for the threat to the historic trees.
Researchers are now involved in a race against time to develop a way to stop the disease that, once it takes hold, kills the oaks within four years.
The Government has ordered a huge survey of trees across Britain to try to understand and track the new threat. Many of Britain’s ash trees are already doomed by the rapid spread of a fungal infection.
Scientists are also trying to isolate and identify a bacteria found on the dying oaks that was previously unknown and might be behind the infection.
The three-year project is an effort to stem the spread of  so-called ‘acute oak decline’,  or AOD, which is identified  by dark weeping patches on  stems of older trees. Oaks more than 50 years old are at the greatest threat.
Researchers believe the disease may be linked to the oak jewel beetle because the diseased trees’ bark is often pitted with the insects’ distinctive  D-shaped exit holes.
The beetle’s larvae have also been found in or near the ‘bleeding’ patches on the trunk of dying trees. It is not known  if beetles are attracted to the scent of the infected trees or if they are carriers of the disease that is killing them.
Attack: The oak jewel beetle that feeds on oak timber
Attack: The oak jewel beetle that feeds on oak timber

Using advanced sequencing technology, scientists will  analyse the DNA of bacteria,  fungus and insects found on healthy and infected trees to isolate the cause.
The Forestry Commission and bioscience experts at Bangor and Cambridge Universities are leading the project, which will take samples from up to 200 woodlands.
Estates belonging to the National Trust are among the hardest hit. At Blickling Hall in Norfolk, the majority of the oaks within its 950 acres of historic parkland are suffering from the disease. Ancient trees at Attingham Park in Shropshire are also affected.
According to a Forestry Commission document, estate workers should ‘strip the outer bark and sapwood of heavily infected and dying or dead trees after felling and burn on site’.
‘Rapid destruction of stripped bark is recommended to prevent the possibility the disease spreading,’ it adds.
Mysterious disease: Thousands of oaks have already been affected, which kills them within four years
Mysterious disease: Thousands of oaks have already been affected, which kills them within four years

Dr James McDonald, from Bangor University, is carrying out DNA research using forensic science techniques pioneered in medical research to try to identify the bacteria.
He said: ‘It is affecting older trees, some hundreds of years old, and whatever is behind it  is causing the decline of something that has been here for so long, is much loved, and is difficult, if not impossible,  to replace.
‘It is a very complicated issue. It could involve new bacteria that have been isolated from the lesions on the stems or the oak jewel beetle. We are looking at their involvement but both could be passive bystanders in the process. We don’t know.’
Dr John Morgan, head of the Forestry Commission’s Plant Health Service, said: ‘We are determined to do everything possible to protect our trees. AOD is a complex condition and this new funding will enable us to better understand it, and the number and distribution of trees affected.’

Friday, 21 June 2013

The Archbishop of Canterbury attacks payday loan industry

The Archbishop of Canterbury attacks payday loan industry

June 20th, 2013 | by  | Published by Bureau of Investigative Journalism
Archbishop: Ban "usury" lenders from our high streets

The Archbishop of Canterbury has called for the Government to ban ‘legal usury on our high streets’ in a strongly worded attack on the payday loan industry.
Speaking in a parliamentary debate on the high-cost loan companies, some charging customers more than 4,000%, the Archbishop said the Government should introduce a cap on the rates the firms can charge.
He also dismissed Government claims that a cap would restrict competition and force people to turn to loan sharks.
‘The payday lending industry has grown at a vast speed’ he said, and was now ‘a situation too big to ignore’.
The debate follows a Bureau investigation that revealed the huge growth in the industry over the past three years. The research showed that the 12 biggest high-cost lending companies made almost £1bn in revenues in the last year, with some tripling their turnover.
The Archbishop told the House of Lords payday lenders assured people with ‘impressively slick marketing campaigns and targeted advertisements that the process of taking out a loan is quick, simple and safe.
‘But once you have taken out the loan it is difficult to get out of the cycle, with the rates offered, simply paying off the interest becomes a struggle.’
Calling for a cap on the lenders interest rates, he said: ‘A cap doesn’t mean 25% or 30%.
‘Caps are needed at a sensible level that does not choke off supply and send people into the hands of loans sharks. But on the other hand caps are there to prevent usurious lending.’
Legal usury
Responding to arguments that caps should not be brought in ‘at any price’, he added: ‘The trouble is they are at any price, typically over 2,500% on an annual basis. We do need to look at reasonable limits that cut out legal usury from our high streets.’

Former media boss Lord Hollick, the Labour peer, accused the major high street banks, including taxpayer-owned Royal Bank of Scotland, of funding the payday lending industry instead of providing more reasonable loans to consumers.
And he pointed to the increasing ownership of payday firms by US businesses despite restrictions of high cost loans in the US and of the involvement of Conservative donor Henry Angest with high cost lender Everyday Loans.
Citing the Bureau’s report he pointed to high increases in turnover and profits experienced by some high-cost lenders.
He added: ‘Harsh economic circumstances may be the driver of demand, but the secret of the high profit is the mix of simple and instant loan availability, lax regulation, the absence of competition and, of course, eye watering interest rates.’
He added: ’The lenders business model is to recruit borrowers and then to increase the number of loans, thereby maximising the yield per customer, and so begins the awful debt cycle which traps the many payday borrowers.
‘For the lenders the high debt experience, estimated at more than 25%, is more than compensated for by the stratospheric interest rates.’
A U-turn
Shadow Business Minister Lord Mitchell accused the Government of a U-turn on earlier plans to clamp down on payday lenders and cap the interest rates they are allowed to charge.
He said the ‘government’s heart had gone out of the matter and they were retracting their position.
‘The government no longer seems to care,’ he added.
He demanded that the Government ‘state unequivocally that usury rates are morally wrong and should be made illegal.’
But Business Minister Viscount Younger, responding for the Government, ruled out any immediate cap on the interest rates of payday lenders.
He said consumers had to take personal responsibility for their own finances. ‘Payday loans are a new phenomena, they should only be used for a short-term fix and never for long-term debt problems. A way for managing a short-term cash flow problem,’ he said.
He added: ‘Spiralling cost of credit is not the main crux of the problem. Problems arise when people take out this kind of short-term, high-cost loan when it is not suitable for them. When they cannot afford to repay.’
He said that lenders did not always carry out adequate assessments of potential borrowers ability to afford the loan.
And that, in this respect, ‘the payday market is not functioning in the interests of consumers.’
He added: ‘The government is therefore deeply concerned about the scale of consumer detriment identified, the speed and ease at which loans can be accessed, the frequency with which loans are rolled over and the grave financial and social problems arising from defaults and the calling-in of such repayments.’
He said the Government and regulators were taking tough enforcement action against unscrupulous lenders. And that the new regulator, the Financial Conduct Authority, which begins work in April next year, would have tough new powers ‘including imposing unlimited fines on firms and… a more stringent bar for market entry’.

Thursday, 13 June 2013

Revealed: The £1 billion high cost lending industry

Revealed: The £1 billion high cost lending industry

June 13th, 2013 | by Jason Lewis Bureau of Investigative Journalism

Bundles of cash are being lent to consumers with poor credit ratings. (Image via Sutterstock.com)

 Britain’s top dozen high cost lenders – some charging interest rates of more than 4,000% – made almost £1bn in the last 12 months, the Bureau of Investigative Journalism can reveal.
The figure is more than four times greater than the turnover of the entire industry assessed just three years ago.
Half of the biggest high-risk loan companies in the Bureau’s research also posted profit margins of more than 30%.
This massive growth in an industry that is largely made up of controversial payday loan companies, has taken place despite Britain suffering a double-dip recession, and against the background of falling wages and a squeeze on more mainstream borrowing.
The Bureau’s investigation into these lenders analysed the accounts of companies that offer debt to customers with low credit ratings, and charge high interest rates in the process.
Many of the companies in the research offer payday loans, a term used to refer to a short-term, high-cost loan, regardless of whether the payment is linked to a borrower’s payday. Some of these companies charge interest that is equivalent to 4,000% annually, on loans intended to last a few weeks or months. Other companies provide loans, some more long-term, with interest rates above 50%, considerably higher than conventional mortgages, overdraft facilities and even credit card companies.

Competition Commission
The disclosures come as the Office of Fair Trading (OFT) is due to decide whether it will refer the payday loans industry to the Competition Commission for a market investigation into alleged restrictive business practices.
The OFT is also waiting for responses to a series of letters sent to the leading firms questioning how they are run.
The government watchdog’s review of the industry has already led to three companies having their licenses to issue loans revoked and another three placed under formal investigation.
Earlier this year prime minister David Cameron rejected calls for a cap on the interest rates the firms can charge borrowers. He told the House of Commons: ‘The most important thing to do… is to welcome what the Office of Fair Trading is doing, which is putting those companies on notice… without an effective regulated sector, there are far more dangers from loan sharks.’
Now research by the Bureau shows how the payday loans firms and other high-risk lenders, have enjoyed a period of rapid expansion funded by loans from high street banks and huge investment from foreign firms, mostly in the US where, unlike in Britain, payday loans are heavily regulated.

The Bureau’s analysis of the industry’ top 50 firms reveals that:
•            Leading firms are boasting profit margins over 30%.
•            At least seven leading firms saw their revenues treble in the last year.
•            Six firms made operating profits of more than £10m.
•            One loan company director earned a salary of £1.6m and four more were paid between £200,000 and £800,000 a year.
•            Shareholders in one firm received a £5.3m dividend.
•            Small loan company bosses are becoming overnight millionaires, in one case transforming a former guesthouse owner into a gentleman farmer.
The total turnover of the firms we examined was £1.4bn compared to £242m in 2009, when the industry was analysed in detail by the government agency the National Consumer Council.
Leading company Wonga.com posted profits of more than £63m while three others made more than £30m operating profits: Instant Cash Loans, MEM Consumer Finance ltd and Amigo Loans.
Recommendation after recommendation and review after review has uncovered a systematic failing in this industry, which continues to claim it can sort itself out.
Stella Creasy MP
Seven companies more than tripled their revenue in the past year: Wonga.com, Lending Stream, TxtLoan, CFO Lending, The Loan Store, First and Goal Ltd and SDM Corporation.
And six companies in the top ten made pre-tax profits of more than £10m and profit margins based on their operating profits of more than 30%. These include WageDayAdvance, which was bought by a US-based company in February and made £16.4m pretax profits on £34m turnover.
Systematic failings
Labour MP Stella Creasy, who has campaigned to limit the interest that firms can charge, said: ’Recommendation after recommendation and review after review has uncovered a systematic failing in this industry, which continues to claim it can sort itself out.
‘Those struggling with the debts they are causing know otherwise – they desperately need the government to do the right thing and cap the total cost of credit that can be charged in the UK to give British consumers the protection that they deserve from these problems – and that others around the world enjoy.’
The huge expansion in the industry is demonstrated by the growth of medium-sized firm CFO Lending, which published its accounts at Companies House this week.
The firm, which charges 4,414% APR interest on loans and is run by Essex property developer James Keeble, has seen its turnover increase from £790,000 in 2009 to £19.6m for the year ending August 2012 – a 24-fold increase.
Other foreign-owned firms posted huge increases in turnover but made losses after paying fees due to their parent company.
One of the biggest firms in the market, Lending Stream, had an income of almost £33m, up from £10m a year earlier, but made a loss of £3.6m after paying more than £36m in administrative expenses.
According to its accounts, its only employees are two foreign-based directors, but it faced huge costs, including paying £5.3m in royalties to its US parent Global Analytics Inc, based in California.
The firm, which charges 4,414% APR interest on loans and is run by Essex property developer James Keeble, has seen its turnover increase from £790,000 in 2009 to £19.6m for the year ending August 2012 – a 24-fold increase.
Payday loans have come under heavy attack by consumer groups including the Citizens Advice Bureau. Such groups draw on research into the industry showing the difficulty many people have repaying their loans.

Research by R3, the insolvency practitioner, shows that more than 5m adults were considering taking out a payday loan in the first six months of this year. It also revealed that millions of people – 13% of the population – prioritised paying back the loans over buying food, clothes or paying their heating bills.
Consumer research group, Which? also revealed that a third of payday loans were simply taken out to pay off another payday loan.
Well rewarded
The growth in the industry has rewarded investors and directors well. Many of the chief executives of the companies analysed by the Bureau are earning six-figure salaries. The highest paid director at Wonga.com earned £1.6m in 2010, according to company accounts.

Dale Chapman and his father, founders of Wage Day Advance, received a share of a dividend of £5.3m according to a note in the accounts, as well as a pay-out after selling the company to US-owned Speedy Cash Holdings in February. Mr Chapman’s father, Paul bought a farm in Harrogate, west Yorkshire in the run-up to the sale.

High Cost Loans: The money pouring into a boom for consumer loans

The money pouring into a boom for consumer loans

June 13th, 2013 | by Jason Lewis Bureau of Investigative Journalism

High street banks have lent to payday loan companies. (Image: Barclays bank via Sutterstock.com)

The rapid growth of the high-cost consumer credit industry has attracted considerable investment despite criticism of the huge interest rates charged by many companies.
The Bureau’s investigation into the sector, which includes many payday loan companies, reveals that Britain’s high street banks have put millions of pounds into the industry. US companies, some banned by law from issuing payday loans in the American states where they are based, are also investing in the UK’s less regulated market. Many have bought up UK companies, paying the UK founders millions of pounds for their shareholdings.
Criticism of the industry has focused on the level of interest charged, with some loans costing up to 4,474% in interest. The government has rejected calls to cap the interest rates the firms can charge, claiming it would force people to turn to illegal loan sharks.
Tory donor: Henry Angest
Instead the Office of Fair Trading (OFT) is attempting to crack down on the industry, threatening to remove firms’ licences if they fail to check whether customers can afford the loans or use aggressive debt collection tactics. The OFT has already removed three licences.
Buying in
Despite this new attempt at regulation, international businessmen including some from eastern Europe, a South African mining company president and US venture capitalist Don Valentine – who made his name funding Apple, Google and YouTube – have bought into the industry.
Many of the companies in the Bureau’s research offer payday loans, a term referring to a short-term, high-cost loan, regardless of whether the payment is linked to a borrower’s payday. These companies charge over 4,000% interest rates. Other companies provide loans, some more long-term, with interest rates above 50% – considerably higher than conventional mortgages, overdraft facilities and even credit cards.
Among those who have invested is the Arbuthnot Bank Group run by chief executive Henry Angest, a Swiss-born millionaire, and a major Conservative Party donor.
Angest now controls Everyday Loans Limited, which offers the ‘financial freedom’ of unsecured loans of between £500 and £10,000 at 74.8%. This is not a short term payday loan company, but has rates of interest higher than other more traditional consumer loans such as credit cards.
US companies, some banned by law from issuing payday loans in the American States where they are based, are also investing in the UK’s less regulated market. 
A former Conservative party treasurer, Angest has contributed £7m to the party in loans and donations.
Last year Everyday Loans was purchased by an Arbuthnot group subsidiary, Secure Trust Bank, which is investing millions of pounds to fund new lending.
Arbuthnot Latham, a private bank, in which Angest owns a majority stake, and which is also part of the Arbuthnot group, has offered a £5m loan to the Conservative Party at 3.5% interest. The loan is listed on the official Electoral Commission register but a Conservative Party spokesman described it as a ‘credit facility’ which the Party had not drawn upon.
A spokesman for Everyday Loans claimed the company was a responsible lender. He said the firm does not provide ‘payday loans’ nor is it a ‘short-term lender’.
He said customers had to borrow over a minimum of 13 months and added: ‘Everyday Loans provides loans to customers who are underserved by the high street banks. If Everyday Loans did not provide this service those looking for loans would have to approach payday loan companies, pawnbrokers or home collected credit companies where interest rates would be very much higher.’
He said: ‘We are not engaged or plan to engage in payday lending. The interest rate charged on [our] loans reflects the risks involved in lending to the individual borrowers. The rates we charge are typically 3 times less than the representative rates of lenders like the home collected credit companies and 20 times less than payday lenders.’
Asked whether the firm or its chairman and chief executive Henry Angest had discussed the company’s business with the prime minster or the government, the spokesman added: ‘We can confirm that we have not discussed the business of Everyday Loans Limited with either the Conservative Party, the current Government or Civil Servants.’
Angest is the second leading Conservative donor with a connection to a high-risk lending company. Adrian Beecroft runs Dawn Capital Investments, a private investors fund, which has a major stake in Wonga, one of Britain’s best-known and fastest growing payday lenders.
Beecroft, who is also a government adviser, has given almost £800,000 to the Conservatives since 2006, most recently contributing more than £100,000 last December. Wonga’s turnover has trebled to almost £185m the last year.

Research by the Bureau also shows that these high-cost lending companies are often heavily reliant on the leading high street banks for funding and set up costs.
Despite widespread criticism that the major banks are reluctant to lend to small businesses and entrepreneurs planning start-ups, payday lenders have found them willing partners.
One major payday firm, US-based Lending Stream, describes Barclays Bank, which currently lends to businesses at 5.1% APR, as a major ‘strategic partner’.
3,378% interest rate
The firm, owned by Delaware-registered Global Analytics Holdings Inc, had a £32.7m turnover in 2011 with 142,000 British customers borrowing £31.2m. Its customers pay 3,378% APR to borrow from it.
The firm’s Californian-based boss Krishna Gopinathan claims he founded the firm to ‘give back’ and to ‘empower’ people with low access to credit.
How much Barclays lends the firm is not disclosed, but it has a fixed charge over the company’s deposits providing, according to Lending Stream, ‘integrated banking solutions … lending, risk management, trade, cash and liquidity management, and specialist asset and sales financing’.
Barclays, which at one stage sought a taxpayer-funded government bail out before instead reaching a deal with Middle East investors, is also involved with several other high-cost lenders.
Barclays Capital, its investment arm, lent £75m to Everyday Loans Limited according to its filings to Companies House to provide ‘funding for the provision of consumer finance lending to customers’, until this was paid off when the firm was bought out last year.
According to documents filed at Companies House the bank also has a charge over credit balances facility for TxTLoan Limited, a firm offering 4,474% interest loans through mobile text messaging.
Barclays was keen to stress that it no longer lends to payday loan companies. A spokeswoman for Barclays Bank said: ‘We do not lend to any of these companies.’

Other major banks are also involved in funding the industry. HSBC provided seed capital for Money in Advance Limited, a firm registered in the British Virgin Islands, the offshore tax haven, which explains, for example, that it will loan customers £250 for 22 days and collect £305 – an interest rate of 3,697% APR.
Taxpayer-owned Royal Bank of Scotland (RBS), which was bailed out after the financial collapse in 2008 with £45bn from the government, is another that has invested in the high-cost credit sector.
RBS funds Amigo Loans Limited, owned by entrepreneur James Benamor, who is paid £890,000 a year. His firm, which says it has now stopped doing payday loans, was, until recently lending at 199% APR. The Bureau has included the company in its data as the financial records cover the period when it was still operating as a payday lender.
Before the bail out the bank, though subsidiary NatWest, helped Nottingham city jeweller Henry Hallam build up his Money Shop business before he sold out to US-giant Dollar Finance in a deal in 1999.
Its website advertised: ‘Borrow £400 for 31 days, pay £400 interest’.
Taxpayer-owned Royal Bank of Scotland, which was bailed out after the financial collapse in 2008 with £45bn from the government, is another that has invested heavily in the payday business.
At the end of last year it replaced these with new longer term ‘guarantor loans… Based on how much your friends trust you, NOT your credit score’, it says. These loans charge 49.9% APR in interest.
Lloyds TSB, which took £5.5bn from the taxpayer to save it from collapse, is another high-street name involved in funding the payday market.
The bank helped fund Instant Cash Loans Limited, owners of the Money Shop.
Investment in the industry is flowing in from the US too. The Bureau’s research highlights the growing involvement of US firms in the British payday industry at a time when such companies are facing tighter regulation of their activities at home.
Rapid growth
Dollar Finance has overseen the massive growth of the Money Shop taking it from a company with 34 staff and a turnover of £2.9m in 1998 to one with 2,300 staff and an income of £172.3m today.
The success of its Money Shop stores has made Dollar Finance, which is owned by Philadelphia-based DFC Global Corporation, keen to expand.
In 2009 it acquired Express Finance (Bromley) from Michael Thorpe, who, before the buy out, had employed his 25-year-old son and his wife to help run the business, for almost £5m. In the three years after the takeover the company’s revenues increased tenfold to £51.7m and it is making profits of almost £17m a year.
In April 2011 Dollar Finance expanded further, buying internet loans business MEM Consumer Finance, which trades as PaydayUK and issued £30m worth of loans last year.
Expansion of the payday loans industry in the US has been curtailed by a growing clampdown on high interest rates by state governments. Some states have even banned payday loans.
In 13 states the loans are either illegal or, while not explicitly banned, prohibited by strict usury limits – hard interest rate caps on the annual percentage rate.
Since 2007 a federal law has also capped lending to military personnel at a maximum of 36%.
Dollar Finance is based in Pennsylvania, where state laws cap interest rates on short term loans at 30% compared to the 2,949% APR offered on its PayDayUK website this week.
In 13 states the loans are either illegal or, while not explicitly banned, prohibited by strict usury limits – hard interest rate caps on the annual percentage rate.
Cash Choice UK Limited is another firm owned in a US state where its interest rates, advertised on its website as 3,491% APR, would be outlawed.
The firm is owned by US citizen David Vickers, president of Cash Choice Inc, based in Atlanta, Georgia, where payday loans have been banned for more than 100 years.
A statement on the Georgia governor’s website says: ‘Payday loans have become a multibillion dollar industry in recent years. Nevertheless, it is illegal in Georgia to make a payday loan.
‘(The) law authorizes felony and racketeering charges against violators, as well as fines of up to $25,000 per violation and a possible jail sentence of 25 years.’
The risks of similar legislation in Britain is reflected in the annual report of Texas-based Cash America International Inc, owners of one of the biggest UK payday lending firms. CashEuroNetUK, which trades as QuickQuid and Pounds To Pocket, and advertises interest rates of 1,734% APR.
In Texas the state senate has been pushing for new laws that would put limits on payday and short-term loan firms charging interest rates of 1,000%.
The latest proposal would limit customers to one payday loan at a time. The size of the loans would also be limited by their monthly income and the loan could only be renewed four times.
With the UK operation generating revenues of £198m, Cash America warned its shareholders: ‘If prescriptive regulations are adopted  (in the UK) the Company’s compliance costs will be significantly increased’.

RBS and Lloyds did not respond to the Bureau’s questions.

High Cost Loans. Making money: Profiting from high-interest loans

Making money: Profiting from high-interest loans

June 13th, 2013 | by Jason Lewis Bureau of Investigative Journalism

Offering a solution: High interest loan companies. (Image via Shutterstock.com)

CashEuroNet UK LLC
Trading as Pounds to Pocket and QuickQuid, the US-based firm is one of the biggest players in the UK payday loans market. It began trading in 2007.
It is registered in Delaware, the tiny state known as the ‘brass plate capital’, where US firms can take advantage of low taxes and laws protecting shareholders.
In the UK its only presence are two addresses registered with the Office of Fair Trading (OFT) belonging to a City of London lawyer and secretarial service firm in Green Lanes, north London.
The firm has announced it is closing its UK branch and instead will trade from the US. It is owned by Cash America Net Holdings, based in Chicago.
Founded in Irving, Texas in 1983, starting with a single pawnshop, the chain grew through rapid acquisitions and was listed on the New York Stock Exchange in 1990.
The company’s annual report for 2012 show its UK operations now generate turnover of £198m of its £1.2bn annual revenue.
The report describes the firm’s ‘core purpose’ as providing ‘financial solutions that help ordinary people meet their needs and pursue their dreams’.
It says it offers ‘reliable assistance when, often, our customers have nowhere else to turn.’
Advertising on television in the UK, Pounds to Pocket charges interest of 278% APR. On its website it says: ‘Borrow £500 and pay £79.09 per month for 12 months at a fixed interest rate of 140% per year.  The total charge for credit is £449.01 (all interest). The Total Repayable is £949.01.’
In his report to shareholders in April the firm’s president wrote: ‘The recent review of the payday lending industry in the UK by Britain’s Office of Fair Trading have captured most of the headlines and analysts’ attention in 2012. The most frustrating part of the process is the uncertainties it creates…
‘I wish I could provide you with granular clarity on how these federal agencies might impact our business, but to do so would only be speculation at this point…
‘Fortunately, many legislators today take heed of the growing library of independent research documenting the lack of credit in the underbanked community and the dangers associated with restricting product design via legislation.’
Israeli businessman Errol Damelin and South African Jonty Hurwitz set up the firm in 2007.
Hurwitz is an expert in ‘control theory’ and helped design a mathematical model to allow the firm to issue the maximum number of loans in the shortest time possible at the minimum risk.
Wonga sees itself as a technology company rather than a finance firm, with Damelin’s ambition for it to be ‘world class…like Facebook, Amazon and Apple’.
It quickly went from issuing £3.2m worth of loans in 2008 to issuing £246m loans last year, adverting interest rates of 4,214% APR.
In 2010 an unnamed director earned £1.6m. 

Instant Cash Loans Ltd, MEM and Express Finance Bromley (owned by Dollar Finance)

Nottingham jeweller Henry Hallam set up Instant Cash Loans, which trades as the Money Shop, with one shop in the city centre in 1992.
By the time he sold up to US loans giant Dollar Finance in 1999 he had opened branches in Bristol, Newcastle, Sheffield, Coventry, Cardiff, Birmingham, Sunderland, Hull, Southampton and Bolton.
At the time Hallam said: ‘By buying us they have established a bridgehead in the UK.’
That ‘bridgehead’ has seen the firm expand rapidly, going from 34 employees in 1998 to 2,339 in 2012.The company is now generating revenue of £172.3m a year and profits of £34.4m. It offers cheque cashing, pawnbroking and foreign currency as well as loans.
Dollar Finance also owns MEM Consumer Finance, which trades as PaydayUK and offers online short-term loans at 2,949.1% APR.
Started by Oxfordshire businessman Iain McKenzie in August 2003, its first year saw a turnover of just £110,181 and an operating loss of £47,867. Its four staff earned £71,226 between them.
Backed by loans from the Bank of Scotland and Barclays to cover further lending, the firm rapidly expanded. By 2010, in the run-up the sale to Dollar Finance, turnover was up to £60m, and it employed 232 staff.
Dollar Finance has continued to expand the company’s operations and it now employs 285 staff and had a turnover of more than £123m last year.
It is currently advertising a £275 loan over 28 days. The total amount repayable is £357.36 – an interest rate of 2,949.1% APR.
Express Finance Bromley was set up in 2000 by Michael Thorpe, aged 65, from Bromley, with a loan from Barclays Bank. Thorpe sold his his stake in the firm to Dollar in 2009 and the US firm began a rapid expansion.
Daryl Thorpe remained a director of the firm until last year. He is now running a new payday firm, Money in Advance, which has South African mining company president Greg Kinross as a director.

Amigo Loans (previously Financial Processing UK Ltd)

Owned by entrepreneur James Benamor, who started his loan brokerage company, the Richmond Group, in 1999 at the age of 21.
Unable to afford advertising at the time, he says he printed leaflets and hand-delivered 30,000 in the first month.
His firm says it has abandoned ‘payday loans’, which it previously issued at 199% APR charging £400 interest on a month long loan of £400.
At the end of last year it replaced these with new longer-term ‘guarantor loans’. These are ‘based on how much your friends trust you, NOT your credit score’, it said.
Amigo Loans, advertised on daytime television by men in sombreros, now only lends for a minimum of a year. It says: ‘Borrowing £5,000 over 60 months, repaying £197.62 per month, total repayable £11,857.20.’ That is £6,857.20 in interest over the five-year loan.
Last year the firm had a £50m turnover.

Wage Day Advance Limited

After leaving school in 1989, Dale Chapman started as an apprentice fitter at a local bus company, but quickly realised working for someone else was not for him.
He opened a shop selling secondhand furniture and progressed to becoming one of the UK’s youngest pawnbrokers before starting his loans firm in 2001.
Now 32, he sold the firm to US loan company Speedy Cash Holdings in February.
Claiming to be one of the UK’s fastest growing payday lenders, its website says: ‘Make any day your Payday’ and reveals that borrowing £225 for 28 days would cost £66.38 in interest, the equivalent of 2,814.2% APR.
It claims it is now processing over 800,000 loan applications a month.
Although the purchase price has not been revealed, company disclosures in New York showed the American buyers raised $100m (£64m) to fund the acquisition and future loans to customers.
In the run up to the sale, Chapman and his wife Kim bought a property in Harrogate, paying £1.75m in cash according to planning records.
They appear to have immediately upset their new neighbours with plans for a car port and garage which were said to be a ‘over development’ of ‘listed’ buildings. A second application to convert a barn and connect it to the house was rejected and plans to extend the access road to the house drew concern from the local Ramblers and Bridleways Associations.

At the same time, Chapman’s father Paul, 63, another shareholder, bought a farm in Harrogate for £2.15 million, according to Land Registry documents. He moved in after selling the family home in Keithley, West Yorkshire, which had been run as guesthouse.

High Cost Loans: The high cost lending companies

Get the data: The high cost lending companies

June 13th, 2013 | by Jason Lewis | Published by Bureau of Investigative Journalism.

The growing consumer credit industry. (Image: Balance sheet via Shutterstock.com)

The Bureau of Investigative Journalism has examined the financial health of the top 50 high cost lending companies to reveal an industry with revenues over £1bn a year.
The data reveals that the top 12 companies, many of them charging interest rates over 4,000%, have a combined turnover of nearly £1bn and that seven of the companies where accounts are available have tripled their revenues in the past 12 months.

The Bureau analysed the accounts of the top companies operating in this fast growing sector where these were available. Most companies in the top 20 file full accounts at Companies House. Many of the smaller companies only report limited financial detail. In these cases we have used turnover estimates compiled by Duedil, which provides a financial analysis service, in order to rank the companies.
The list of the 50 companies used was compiled after consultation with industry experts.

Many of the companies in the research offer payday loans, a term used to refer to a short term, high cost loan, regardless of whether the payment is linked to a borrower’s pay day. Others include short term and high-risk lenders that charge high rates of interest.

Tuesday, 11 June 2013



VIP treatment at gigs and match


Jason Lewis

9 June 2013

RESIGNED: Andrew Mitchell

THE senior police officer leading the review into the Plebgate affair has been warned over freebies he enjoyed at the home of a Premier League club.
Deputy chief constable Ian Hopkins was questioned over hospitality he accepted from Manchester City FC's security chief at least four times - which he failed to declare promptly.
He enjoyed VIP facilities at sell-out concerts at the City of Manchester Stadium to see Take That, Coldplay and Bruce Springsteen and to watch a Champions League fixture against Real Madrid.
Mr Hopkins and guests were treated to a hotpot and drinks in the corporate hospitality area.
He is in charge of a team of officers from the Greater Manchester force examining the Met police's handing of Plebgate, the affair which led Tory MP Andrew Mitchell to resign as Chief Whip, after a row with officers in Downing Street.
Deputy Chief: Ian Hopkins

The newly appointed £140,000-a-year deputy chief is investigating claims officers lied and fabricated evidence. Mr Mitchell was accused of calling the police plebs, which he denies.
Mr Hopkins has frequently overseen the policing of football matches. Now he has been warned about his failure to disclose immediately special treatment as a guest of the stadium's head of security Peter Fletcher, who is also a former senior police officer with the Greater Manchester force.
Last night a statement from the chief constable Sir Peter Fahy said: "The Deputy Chief Constable has attended three concerts at the Etihad having purchased standard tickets. At each he has received an element of hospitality and has been given advice by the Chief Constable about this issue. As a result he has made additional entries in the force's Gifts and Hospitality Register.”
He added that Mr Hopkins had not been formally disciplined but said the discussion had been “part of the normal relationship between managers and staff and provides a record that a matter has been addressed.”
He added: "It is accepted that occasionally police officers are offered gifts and hospitality due to the role that they perform and the relationships that they build with partners and commercial organisations. It is important that any such gifts and hospitality that are accepted are properly recorded. 
"There is a commercial relationship between MCFC and Greater Manchester Police over the provision of policing services. The charging mechanism for this this set by national guidance, which GMP adheres to."

Monday, 29 April 2013

Clegg: Belgians spring tax surprise on Mrs Clegg

Belgians spring tax surprise on Mrs Clegg

Jason Lewis and Bojan Pancevski Published: Sunday Times 28 April 2013
Nick Clegg and his wife, Miriam Gonzalez Nick Clegg and his wife, Miriam Gonzalez (James Glossop)
BELGIAN bureaucrats have left Nick Clegg and his wife baffled over claims that she failed to pay tax for domestic staff the couple employed at their former home in Brussels.
Miriam Gonzalez, the Spanish-born wife of the deputy prime minister, was ordered in absentia to pay €1,000 — £840 at today’s exchange rate — after being taken to court over unpaid social security contributions for “up to four domestic staff”. The Labour Court in Brussels issued two judgments against her, one in December 2006 and another in May 2007.
However, the couple — who had lived in the city while he was an MEP and she worked for the European Commission — had moved to London in 2005.
The Liberal Democrats last night blamed “an administrative error” by the Belgian authorities and said that Gonzalez, an international lawyer, was attempting to establish “the full facts”.
“Miriam has attempted to establish why she was never notified about either the tribunal proceedings or the judgments, which both happened long after she had left Belgium to live in the UK,” said her spokesman.
A lawyer who represented the tax authorities in one of the hearings against Gonzalez said she deals with hundreds of similar cases each year. “Disputes like this are common in Belgium,” she said.
Gonzalez’s spokesman said that the National Social Security Office, the Belgian equivalent of the Department for Work and Pensions, had confirmed in writing to her last week that she did not owe it any money. All the same, she would repay anything she owed “if that were ever to be the case”.
“The first time that either Miriam or Nick were aware of these judgments was when they were brought to their attention by The Sunday Times,” the spokesman added.
“Miriam was never notified of the proceedings or the judgments and was therefore not represented and the facts were never challenged or checked. The validity of the judgments must be considered in that regard.”
Court documents reveal that the authorities in Belgium brought two cases against Gonzalez for defaulting on taxes.
The writs alleged failure to make payments for staff employed at the couple’s 19th-century townhouse in the heart of one of Brussels’s most prestigious districts.
Gonzalez was working as a senior adviser to the EU commissioners Chris Patten — the former Conservative cabinet minister and now BBC chairman — and Benita Ferrero-Waldner of Austria.
According to documents seen by The Sunday Times, she registered her household as “employers of domestic personnel” with the Belgian equivalent of Companies House between 2003 and 2005. She was found in default of tax for her employees in 2006 and 2007 after she had left Brussels.
Belgium judgment: Miriam Clegg's name was removed from the copy due to privacy laws

Sunday, 21 April 2013


Blair aide reopens bitter feud with axed 'mad cow' mandarin - in speech to Kazakh dictator's cronies

  • Jonathan Powell gave speech in oil rich former Soviet state Kazakhstan
  • But he launched personal attack on Sir Richard Packer
  • He previously compared Blair’s government to Hitler’s Third Reich

    Tony Blair’s former chief of staff flew 3,000 miles to an oil-rich former Soviet state run by a brutal dictator to tell them how they could learn from Britain’s long history of democracy.
    Jonathan Powell started out by explaining how Kazakhstan would be a vastly better country if it could have its own Rolls-Royce-class Whitehall civil service system, free of corruption.
    But he ended up reopening an old domestic feud by launching a personal attack on a fellow former British mandarin who compared Mr Blair’s New Labour government to Hitler’s Third Reich.
    Jonathan Powell
    Sir Richard Packer
    Feud: Jonathan Powell, right, reopened an old domestic feud by launching a personal attack on former British mandarin Sir Richard Packer, left,  who compared Mr Blair’s New Labour government to Hitler’s Third Reich

    After complaining how hard it was to get rid of troublesome civil servants in Britain, Mr Powell said the Government was forced to give a £1 million payoff to the official who was ‘to blame for the mad cow  disease’ crisis in the early days of  Mr Blair’s Premiership.
    He did not name the official, but he didn’t have to: Sir Richard Packer,  permanent secretary at the Ministry of Agriculture in the late Nineties, last night said he had no doubt Mr Powell was referring to him.
    Mr Powell, along with Mr Blair,  has been advising Kazakh President Nursultan Nazarbayev in a deal reportedly worth up to £16 million.

      Kazakhstan has faced widespread concern over human rights abuses, the treatment of the president’s political opponents and brutality and murder by its police force. Its civil service is riddled with corruption and nepotism.
      Speaking at Nazarbayev’s State Management Academy, Mr Powell told his audience of the dictator’s apparatchiks: ‘When we came to power in 1997, there was a high-ranking official in the  Agriculture Ministry who was fully accountable for the outbreak of mad cow disease in the country.’
      Aide: Jonathan Powell is pictured with Tony Blair in 2007
      Aide: Jonathan Powell is pictured with Tony Blair in 2007
      According to a Kazakh news agency, Mr Powell said: ‘Nothing happened when we asked him to resign. We were told it was impossible to fire him and the best option was to promote him off this position. 
      'In the end, we had to pay him £1 million worth of termination fee. It is very difficult to get rid of such unwanted officials.’
      Sir Richard told The Mail on Sunday: ‘I have come across reports of Jonathan Powell bad-mouthing me before. It is something he has got in his head for some reason, I don’t know why. I might have spoken to him twice.
      ‘It all seems very strange and is also quite factually wrong. He seems to be accusing me of being responsible for BSE. I don’t see how anyone who knew anything, which doesn’t include  Powell, could say that. The BSE report says something completely different. Mr Powell should check his facts.’
      After leaving his Whitehall job, Sir Richard was fiercely critical of the Blair government. He told the BBC: ‘In one respect . . . [the Blair government] reminded me of the Third Reich where . . . nobody would know where ultimate responsibility lay.’
      Last night, Sir Richard denied having received a £1 million payoff, saying: ‘It depends how you add it up. I was there for more than 30 years (and) you can make up a very big figure with pensions and what have you. 
      ‘The implication of the £1 million is that I was paid over and above what  I was entitled to. It was fully within the rules. Once again, Powell’s rhetoric is completely at variance with  the facts.’
      Mr Powell was unavailable for  comment.

      Wednesday, 10 April 2013

      Horse Meat

      Imported horses ‘missing’

      The Sunday Times Published: 7 April 2013
       Minced horse meat is offered in a horse meat shop in Bremen, Germany, 14 February 2013Horsemeat on sale in Germany: thousands of imported horses may have ended up in British food (Ingo Wagner)
      Thousands of horses imported to Britain from Europe have “disappeared”, fuelling fears that they ended up in our food.
      Britain usually imports about 8,000 horses a year, including thoroughbreds for the racing industry and ponies for young riders. Many are slaughtered, however, and the UK exports horsemeat worth more than £4m a year.
      New figures from the Department for Environment, Food and Rural Affairs show that in two exceptional years Britain imported huge numbers of animals.
      In 2009, 22,209 arrived and 15,611 in 2011. At the same time, there was no noticeable increase in the number slaughtered or in the amount of horsemeat exported.
      Mary Creagh, shadow environment secretary, said: “Where did these animals go? It was a recession, British people were getting rid of their horses and yet huge numbers of animals were brought in and simply disappeared.”
      The figures add to mounting evidence that criminals played a major role in contaminating beef in food with horsemeat.
      Police and food safety officials have tracked consignments of meat to Britain concluding, “it arrived as beef and, in some cases, left as something else”, according to a source with detailed knowledge of the inquiry.

      Monday, 18 March 2013

      Tony Blair

      Tony Blair, Kazakh police and human rights questions

      Tony Blair is helping Kazakhstan reform its brutal police force after widespread concern that it is at the forefront of human rights abuses in the country.

      Tony Blair with  Nursultan Nazarbayev
      Tony Blair with the President of Kazakhstan, Nursultan Nazarbayev, inside 10 Downing Street in 2006 Photo: AFP/GETTY

      By Jason Lewis, Investigations Editor
      8:00AM GMT 17 Mar 2013

      The former prime minister agreed to help as President Nursultan Nazarbayev attempts to quell international criticism of a massacre of oil workers which threatens his hopes for a new international trade deal.
      The dictator’s police and special forces shot and killed 15 striking oil workers and wounded more than 100 during an industrial dispute in Zhanaozen, in the south west of the central Asian country.
      Mr Nazarbayev had praised their actions in “restoring order” before video evidence emerged on the internet showing the police massacring unarmed civilians.
      The incident, in December 2011, led to criticism from international human rights groups and, crucially, the European Parliament, threatening to undermine his plans for membership of the World Trade Organisation, which would mean lower customs tariffs and a place at the international negotiating table.
      The country is a key client of one of Tony Blair’s multi-million pound consultancy practices, with a contract reportedly worth £16 million. After the massacre, the president asked for help in managing the crisis.
      Mr Blair did not take part in discussions directly but last March, as MEPs put the finishing touches to a resolution urging “the Kazakh authorities to make every effort to improve human rights” and “strongly condemning the violent crackdown by police against demonstrators”, the former prime minister sent his most trusted long term adviser, Jonathan Powell, the ex-Downing Street chief of staff, to Astana, the Kazakh capital.

      Riot police patrol in the town of Zhanaozen in Kazakhstan on December 18, 2011.
      Riot police patrol in the town of Zhanaozen in Kazakhstan on December 18, 2011
       He arrived as the EU linked its demands for Kazakhstan to “rapidly improve their respect for the freedom of assembly, association, expression and religion” to “the road map for WTO accession”.
      Mr Powell, the man who negotiated with the IRA and helped shape the dossier of evidence for the first Iraq war, now runs Inter Mediate, a charity addressing “poverty, disease and economic stagnation that are the inevitable by-products of violence and political unrest”.
      In Kazakhstan, he found himself sitting down with the hard line interior minister, attempting to reform the repressive police force to satisfy the EU and those backing Kazakhstan, with its rich mineral deposits and £27 billion of foreign investment, in its bid to become a full trading partner with the West.
      In the meeting Mr Powell and the minister, Kalmukhanbet Kasymov, were said to have “exchanged opinions on … the improvement and democratisation of the police”. Sources said that the consultation covered all aspects of policing including the Interior Ministry’s special forces troops – modelled on the Soviet system – which were deployed in Zhanaozen.
      A Kazakh government spokesman said they also discussed “regulation of police work, training, upgrading equipment”.
      Mr Powell was most recently in Astana last month talking to President Nazarbayev’s advisers but is not thought to have played any further direct role in police reform.
      But there have been at least three further sessions with Mr Blair’s team – which includes a Harvard educated lawyer and a former UN human rights official – including one at the offices of Blair Associates in Astana, on fighting crime and “maintaining public order and security”.
      A Kazakh source said the sessions were “full of mutual understanding and efficient dialogue”.
      But last night this was dismissed as a “smokescreen” by Kazakh opposition leader Zhambolat Mamai, who has led calls for Mr Blair to resign from his advisory role. He said that the trigger for Mr Blair’s involvement was the threat from the European parliament and Western governments.
      “They invited these experts and are now able to say work is going on, they are improving everything, but in fact they are creating a smokescreen,” he said.
      He added: “The Interior Ministry is very much in control of the situation in Kazakhstan, and believe me they will never let these Western consultants get close to understanding the real problems of our system.”
      The December 2011 violence erupted after the government ignored protests from striking oil workers over pay and conditions. Police claimed that they were defending themselves until internet footage backed witness accounts of the security forces shooting indiscriminately at unarmed demonstrators.
      Earlier this year Human Rights Watch said that in 2012 Kazakh authorities intensified “persecution of outspoken government critics” without having “seriously tackled long standing, grave human rights abuses”.
      A spokesman for Mr Blair’s office said: “As is well known, we work to support the government of Kazakhstan on key areas of social, political and economic reform.
      “This has included discussing aspects of police reform – something which was publicised by the government at the time.
      “This work is entirely in line with the work of other international organisations and Western governments and follows the direction which the international community wants Kazakhstan to take.”
      He added: “Zhanaozen was a tragedy, but there are indications that the government is addressing the underlying causes. This includes police reform, plans for local government reform and economic measures to help improve the lives of people living in these types of towns, which are a hangover from the Soviet era.”