Sunday, 25 August 2013

Banks face $2 billion U.K. credit card scandal bill

Banks face $2 billion U.K. credit card scandal bill


british banks British and other banks will take part in the scheme to compensate customers in the latest of a series of scandals concerning misconduct in the financial services industry.
LONDON (CNNMoney)

Banks and credit card issuers will have to pay up to £1.3 billion ($2 billion) compensation to British customers who were sold identity theft and fraud protection policies they didn't need.

It's the latest in a series of fines, settlements and compensation payments in the industry as banks try to move on from a recent sorry history of manipulating interest rates, breaking money-laundering laws and selling individuals and businesses complex products that were inappropriate or not properly explained.
Regulators said they were setting up a program to allow seven million customers to claim compensation relating to 23 million insurance policies sold by Card Protection Plan (CPP), which was fined £10.5 million in November 2012.
"Customers were given misleading and unclear information about the policies so that they bought cover that either was not needed, or to cover risks that had been greatly exaggerated," the Financial Conduct Authority said in a statement.
Related: America's favorite credit cards
The policies cost between £30 and £80 per year and were widely mis-sold by CPP. Many customers were referred to CPP by the biggest names in U.K. financial services.
Thirteen banks and credit card issuers, including Barclays (BCBAY), HSBC (HBC), Morgan Stanley (MS, Fortune 500) and MBNA, will join CPP in the compensation program, which is open to anyone who bought one of the products since 2005.
Customers due compensation will be entitled to the amount they paid for the policy, less any payouts, plus 8% interest on the amount owed.
Other banks participating in the compensation program are Lloyds (LLDTF), Canada Square Operations Limited (formerly Egg Banking), Capital One (COF, Fortune 500), National Australia Group, Home Retail Group (HMRLF), Nationwide Building Society, Santander (SAN)and Tesco (TESO)Personal Finance.
Related: Ex-JPMorgan bankers charged over London Whale
The bill is small compared to the $20 billion the U.K. sector has already paid out to compensate buyers of payment protection insurance aggressively sold at inflated prices alongside mortgages and other loans for more than a decade.
But it comes as banks are still struggling to strengthen their balance sheets to make up for the cost of past misconduct and to meet new tougher rules on capital and liquidity introduced in the wake of the global financial crisis.
Barclays said last month it was looking to raise £7.8 billion by issuing new shares and debt to help plug a £12.8 billion cash gap identified by regulators. It is also shrinking its balance sheet. To top of page

U.S. Open: Serena Williams 'pumped up' by defeat to Victoria Azarenka

U.S. Open: Serena Williams 'pumped up' by defeat to Victoria Azarenka


U.S. Open champion Serena Williams signs her autograph for fans at the USTA Billie Jean King National Tennis Center.
U.S. Open champion Serena Williams signs her autograph for fans at the USTA Billie Jean King National Tennis Center.
STORY HIGHLIGHTS
  • Serena Williams will begin defense of her U.S. Open title on Monday
  • World No. 1 is seeking to become the grand slam's oldest women's champion
  • American says she is determined to bounce back from recent Cincinnati defeat
  • Her main rival will be last year's beaten finalist Victoria Azarenka
(CNN) -- Serena Williams has lost only four matches this year -- and the world No. 1 is hoping her most recent setback can help her become the oldest winner of a U.S. Open women's singles title.
The American is favored for a fifth triumph at Flushing Meadows, but this month's defeat by second-ranked Victoria Azarenka has given the Belorussian hope of avenging last year's final heartbreak.
Azarenka served for the title just under 12 months ago in New York, but Williams fought back to claim her 15th grand slam title.
She has since added another, at the French Open in June, but suffered a shock reverse against Sabine Lisicki in the last 16 at Wimbledon.
Williams added two more WTA Tour titles at Bastad and Toronto, but was upset by Azarenka in a third-set tie-breaker in the Cincinnati final.
'Golden Bear' on tennis love
'Little Giant' aims for Grand Slam glory
"Every time I lose, I get so pumped afterwards," said Williams at a pre-tournament press conference Saturday.
"I just feel like now I'm ready, now I'm prepared. I almost needed that to take my game to a new level."
Williams will be 32 on September 26, and if she can retain her title in the final 18 days before that then she will surpass Margaret Court's 1973 effort of being the tournament's oldest woman winner.
"I have been able to keep up with the times," Williams said. "I'm actually serving harder than I ever have in my career. The racquets are stronger and I'm more fit.
"I feel so good, so healthy, so vivacious every time I step on the court."
With world No. 3 Maria Sharapova missing the tournament due to injury, and Wimbledon champion Marion Bartoli having retired earlier this month, Azarenka is Williams' biggest threat along with Polish third seed Agnieszka Radwanska.
Williams will face former French Open winner Francesca Schiavone in her opening match Monday, while older sister Venus plays Belgium's Wimbledon semifinalist Kirsten Flipkens.
King still fights for tennis equality
Secret to beating tennis' big four
Azarenka will begin the two-week event against Germany's grand slam debutant Dinah Pfizenmaier.
"You can always take the best out of what happened last week, so I will definitely take that into consideration," the 24-year-old told reporters Saturday.
"But the new week, U.S. Open, Serena, number one player in the world, defending champion, we all start kind of from zero here."
In the men's draw, Rafael Nadal and Roger Federer will both be in action on Monday.
Second-ranked Nadal will face American Ryan Harrison as he bids to win the hard-court event for the second time. The Spaniard was champion in 2011, then runner-up the following year, but missed the 2012 event due to injury.
Federer, the champion five years in a row from 2004, will play Slovenia's Grega Zemlja as the seventh seed following a difficult year in which the 17-time grand slam winner has struggled with both injuries and an experiment with a new racquet.
Meanwhile, world No. 9 Petra Kvitova's U.S. Open preparations stumbled Saturday as the Czech lost 6-2 6-2 to Romania's Simona Halep in the final of the WTA event in New Haven.
Halep, a quarterfinalist in Cincinnati, followed up Friday's win over former No. 1 Caroline Wozniacki to claim her fourth title this year.
France's Gael Monfils may miss New York after suffering an abdominal injury in the final of the ATP's Winston-Salem tournament.
The former world No. 7, now ranked 49th after a series of physical setbacks, retired at 6-3 2-1 down against Austria's Jurgen Melzer.

China's Bo Xilai rebuts testimony of ex-police chief key to his downfall

China's Bo Xilai rebuts testimony of ex-police chief key to his downfall


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Bo Xilai trial wraps third day

STORY HIGHLIGHTS
  • Bo Xilai slams his former police chief as a "liar with extremely bad character"
  • Trial adjourned after half a day on Sunday, to resume for day 5 on Monday
  • Bo facing trial for corruption, embezzlement and abuse of power
  • Wang says he tried to seek U.S. asylum because he feared for his safety
Jinan, China (CNN) -- Calling his former deputy a "liar with extremely bad character," fallen high-flying politician Bo Xilai on Sunday rebutted the testimony of the prosecution's star witness as his increasingly dramatic trial stretched into a fourth day.
The former Communist Party chief of the sprawling southwestern metropolis of Chongqing has denied abusing his power -- the third and final charge being heard in court in Jinan, eastern China, long after he was stripped of his posts and expelled from the party.
Prosecutors accuse Bo of threatening and improperly firing his former police chief Wang Lijun after learning about a murder investigation involving Bo's wife Gu Kailai, who is currently serving a suspended death sentence for killing British businessman Neil Heywood.
On Sunday, Bo insisted that Wang was lying throughout his court appearance, and said his words lacked any credibility or legal standing.
Fallen political star Bo Xilai stands for trial at the Jinan Intermediate People's Court on Thursday, August 22. Fallen political star Bo Xilai stands for trial at the Jinan Intermediate People's Court on Thursday, August 22.
Bo Xilai: China's 'trial of the century'
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Bo Xilai: China\'s \'trial of the century\' Bo Xilai: China's 'trial of the century'
Disgraced Chinese politician on trial
Bo Xilai's wife testifies
Bo Xilai defends himself in court
China's 'trial of the century'
Politician's supporters still pro-Bo
Wang took the witness stand Saturday, providing the first opportunity for the two former allies to confront each other since Wang's attempted defection to the United States in early February 2012.
Wang told the court he fled to the U.S. consulate in Chengdu because he feared for his safety following a tense encounter in Bo's office, just one day after Wang told Bo about his wife's suspected involvement in murder.
"He started verbally assaulting me... and about three minutes later, he walked around the left side of his desk and stood in front me. He suddenly attacked me with his fist, hitting on my left ear -- it was not just a slap," Wang recalled, according to a court transcript.
On Sunday, Bo said: "He said I didn't just slap him but punched him. I never practiced martial arts -- I don't possess such striking power," according to a transcript released by the Jinan Intermediate People's court.
Bo added: "After being convicted for abuse of power and defection, he still argued that he didn't defect but engaged in diplomacy in accordance with regulations.
"All this shows this man has extremely bad character and lies on the spot."
The trial was adjourned after the Sunday morning session and will resume Monday morning.
The story behind the 'slap'
On Saturday, Bo conceded he had made mistakes but denied he broke the law to protect his wife.
"I have made mistakes. I feel regret and I'm willing to take responsibility," Bo said. "But whether or not I've committed a crime is a different issue."
"I didn't bend the law to protect Gu Kailai," he said. "I didn't force Wang Lijun out or force him to defect to the United States."
Bo did acknowledge slapping Wang in the face -- a key moment long considered a turning point in the two men's relationship -- during the office confrontation, claiming he believed Wang was trumping up charges against Gu and thus furious at his "double-faced" deputy who had faked his loyalty to the Bo family.
According to a court transcript, Wang said it was more than a slap and that the blow had caused a "discharge" from his ear.
"My body shook a little... and I found blood at the corner of my mouth and discharge in my ear," he continued. "I wiped the blood off with a tissue, but when he heard me calmly tell him again that he had to face the reality, he threw a glass on the ground while saying 'I'll never accept it.'"
Wang told prosecutors that Bo's physical violence against him as well as the disappearance of his aides and investigators led to his decision to seek refuge in the U.S. diplomatic mission in Chengdu.
When Bo was allowed to question the witness, Wang revealed in an exchange that Gu had told him about her intention to kill a day before the murder. And when Bo asked Wang: "Did you think I was forcing you out in an attempt to cover up (my wife's murder) case?" Wang replied: "Yes."
Embezzlement and corruption charges
Earlier Saturday, Bo kept up his vigorous defense against embezzlement charges and, as he did Friday on corruption charges, and dismissed testimony from his jailed wife as a desperate attempt to reduce her own sentencing.
Gu was sentenced last August for killing Heywood in a Chongqing hotel room in November 2011. She gave her testimony to the court via video and said that Bo was well aware of multi-million dollar dealings to fund their and their younger son's jet-setting lifestyle.
"I have feelings for Gu Kailai," Bo said Saturday morning, after admitting to an extramarital affair. "She is a vulnerable woman... and who else could she turn in? That's why all accusations against me originated from her."
Prosecutors allege that Bo received five million renminbi ($820,000) of public funds from a local urban planning official in Dalian, Liaoning Province, in the early 2000s when he was mayor and later the provincial governor.
Bo slammed the allegations as "contradictory" and denied that he needed to take the money as his wife earned millions of dollars from her five law firms.
Under the bribery indictment, prosecutors accuse Bo of using his political posts to secure influence for others. They say that between 2000 and 2012, Bo, Gu and their son, Bo Guagua, received about 22 million renminbi ($3.6 million) in bribes from businessmen in Dalian.
Bo's fall from grace
Bo is a princeling, a term that refers to the children of revolutionary veterans who boast of political connections and influence. His late father, Bo Yibo, was a revolutionary contemporary of Chairman Mao Zedong and the late paramount leader Deng Xiaoping.
Over the past three decades, Bo rose to power as a city mayor, provincial governor, minister of commerce and member of the Politburo, the powerful policy-making body of the Communist Party.
A charismatic and urbane politician, Bo -- with the help of Wang -- was credited with a spectacular, albeit brutal, crackdown on organized crime during his time as the top party official of Chongqing.
Bo's glittering career, in which he drew admirers and detractors for his populist policies, fell apart last year amid a scandal involving murder, corruption and betrayal.
Wang's attempted defection precipitated Bo's political demise. After Gu's sentencing last August, Wang was convicted of bending the law for selfish ends, defection, abuse of power and bribe-taking. He received a 15-year prison sentence.
Bo's trial is seen as a potentially concluding chapter in the scandal.
His high profile and connections among the nation's ruling elite have made his case -- with its tales of greed and wrongdoing by a top official and his family -- an extremely delicate matter for Chinese authorities.
It's taken more than a year, during which time the Communist Party has undergone a major leadership change, to bring him to trial.
Many observers had expected proceedings to stick closely to a pre-planned script, seeing the trial's outcome as the result of a political deal struck between Bo and China's top leaders.
But as he often did in his political career, Bo has so far stolen the show, mounting a robust attack on the prosecution's case and ridiculing witness testimony. That has left China watchers trying to figure out how far he's veered off script.
Journalists from the international news media haven't been allowed inside the courtroom. But the court's official microblog account has delivered updates on developments inside, attracting more than half a million followers on Weibo, China's Twitter-like service.
CNN hasn't been able to verify how accurate and comprehensive the court's version of proceedings has been. But many observers have interpreted it as a reasonably close, albeit filtered, account.