Banks leave some customers in 'dire poverty'

By Brian Milligan Business reporter, BBC News

High Street banks have been accused of leaving some customers in "dire poverty" after taking money out of their accounts without permission. 
 

 

Setting off typically sees banks move between £100 and £200, usually to pay off a credit card account

Banks can move cash between different accounts belonging to the same person, and only have to tell them afterwards.

The practice, known as "setting off", typically involves banks moving money from a current account to pay off a credit card account which is overdrawn.

Citizens Advice says it has seen an 80% rise in inquiries about such transfers.

It is not illegal for banks to move money in this way. They only have to tell the customer after they have done it.

"Setting off" typically involves banks moving sums of between £100 and £200, usually to pay off a credit card account.

For many people that can actually be helpful, as it will save them interest charges.

Continue reading the main story

“Start Quote

I have no money for food, let alone for other essentials like washing materials”

End Quote John Gates

 

But for others, particularly those who receive benefits, it can cause serious hardship.

£3 a day
 
John Gates, from Brixton in south London, has a £4,000 debt on his credit card.

He relies on housing benefit and Job Seeker's Allowance for his income.

On at least four occasions his bank took money out of his current account to put towards the credit card debt. It only informed him afterwards.

After paying for his rent, John says that left him with just £3 a day to live on.

"It's devastating," he says. "It means I go on a forced diet. I have no money for food, let alone for other essentials like washing materials."

Another couple, from Dundee, told the BBC that they were left without enough money to pay for their baby's nappies after their bank also transferred money to a credit card account without their knowledge.

The couple agreed to be interviewed, until their bank apparently offered them a £1,000 payment if they agreed to remain silent.

Bank consolidation
 
Citizens Advice says such cases are not rare. "It's actually leaving people in dire poverty," Sue Edwards from the service told the BBC.

Up to 2% of all bank customers are affected by set-off payments, and the practice has increased markedly in the last four years.

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“Start Quote

The onus is on the banks to make sure they treat individuals sympathetically and positively”

End Quote Eric Leenders British Bankers' Association

 

That is partly because of the consolidation of banks, so that where customers used to have accounts in separate banks, they now find those accounts come under a single new owner.

The Lloyd's Banking Group includes Halifax and Bank of Scotland, for example, while RBS includes Natwest.

Sue Edwards says she would ideally like to see the whole practice banned, but because that would require legislation, it would be difficult to achieve.

In the meantime she is asking banks to leave at least £1,000 in people's accounts, to cover basic living costs.
"It wouldn't help everybody," she says, "but it would help more people than at present."

'Beneficial' practice
 
Banks say they are well aware of the problem.

"It can be a big challenge for people," admits Eric Leenders from the British Bankers' Association (BBA).

But he also points out that the practice can be beneficial to customers who have simply forgotten to make a payment.

Such customers could avoid an unarranged overdraft, or arrears on a loan or mortgage.

And he rejects the idea of leaving a minimum of £1,000 in customers' accounts.

"It would be difficult to say a specific amount," he says.

But after the BBA published extra guidance to the lending code in March this year, Eric Leenders is promising that banks will be more considerate towards customers.

"The onus is on the banks to make sure they treat individuals sympathetically and positively," he says. "Banks should make sure there's sufficient left for reasonable living expenses."

The Financial Services Authority, the banking regulator, is currently consulting on its own new guidance on set-off practice.

Among its planned recommendations, it says money should not be taken from joint accounts or where the cash involved has come from a benefit payment or a tax credit.

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Related Internet links

• Citizens Advice
• British Bankers' Association

Mum disowns son over debt

 Visit from Ah Long the final straw

JOHOR BARU: A tyre shop owner has disowned her son after Ah Long harassed her over his RM60,000 gambling debt.

Bong Swee Yin, 50, said although she could tolerate her son stealing from her to fuel his online gambling habit, the visit by the Ah Long was “unbearable.”

“I can accept and even forgive him for stealing from me over the past eight months. However, leaving me to settle his RM60,000 debt is too much.

“I have decided to disown him,” she told reporters at a press conference organised by Johor Baru MCA public complaints bureau deputy chief Michael Tay here.

Fed up: Bong airing her woes to Tay during a press conference at the Johor Baru MCA public complaints bureau.

 

She said she hoped the Ah Long would stop harassing her since she had severed family ties with her 25-year-old son who would often stay up until the wee hours of the morning gambling online on his computer.

“Whatever the Ah Long want to do to him, I don’t care anymore. I am very disappointed with his behaviour,” she said, adding that her son had been missing since Aug 25.

Bong also vowed that even if her son were to repent and beg for forgiveness, she would not help him pay his debts.

“If he comes home and explains his actions, I am still willing to take him back. I will not, however, help pay his debts. That will be his problem,” she said.

“Before the Ah Long came to my shop last Wednesday, I had no idea that my son’s gambling habit was so serious.

“He has always been rebellious and disobedient but I never imagined him getting into this kind of trouble,” she said, adding that the Ah Long had threatened to seize goods from her shop if her son did not settle the debt soon.

Tay said almost 90% of the Ah Long cases the bureau received this year were linked to debts incurred through online gambling.

“Many people turn to Ah Long when they get into debts. I urge the public to never ask Ah Long for help no matter how deep the trouble they are in,” he said.

Moving to a higher plateau

AT YOUR SERVICE
By DATUK NICHOLAS S. ZEFFERYS

After three years, Pemudah, initially set up to make public delivery service more effective and efficient, now faces the same question it put to others. Has it been effective in effecting mindset change?

PEMUDAH (Government’s Special Task Force to Facilitate Business) has been in existence for over three years now. It is perhaps appropriate to review how and why it came about.


In his book, Business at the Speed of Thought, billionaire Bill Gates wrote that business would change more in the next decade than it had in the past 50 – and it has indeed. The speed of change requires all organisations to conduct an honest stocktaking, asking “How are we doing?” and then doing something about the gaps.


In the private sector, this usually comes in the form of continuous feedback from customers and investors. Failure to listen to feedback in the private sector leads to complacency and, ultimately, insolvency and bankruptcy.


In the public sector, feedback comes in the form of complaints from stakeholders and also the global ranking of countries. Failure to heed either leads to complacency and a slow, gradual decline in service delivery.


Once, when somebody asked him how he had gone bankrupt, a businessman replied. “Gradually, then suddenly.” It is in the nature of people and organisations to gradually fall into a pattern of complacency, particularly when things seem to be going well. Then, suddenly and inexplicably, they are shocked to find themselves hopelessly adrift.


Investment in Malaysia – both foreign and domestic – has been on a declining trend for over a decade. A reality check came from a World Bank report comparing countries on several measures. It showed that it was just too difficult to do business in Malaysia, which was ranked very poorly on nearly all components of the business life cycle processes.


Pemudah was formed on Feb 7, 2007, during Tun Abdullah Ahmad Badawi’s leadership. He wanted a customer-centric government that was world class in the delivery of government services. He had in his mind a new vehicle – drawing on the private sector to provide another lens through which to evaluate and transform government processes and procedures.


The Chief Secretary to the Govern­ment was appointed the Chair to the Taskforce. Abdullah conceived Pemudah as a public-private partnership (PPP) that went well beyond being a dialogue between the two. This was demonstrated by sharing its chairmanship with private sector leader Tan Sri Yong Poh Kon.


Pemudah’s goal was to vault Malaysia to the Top 10 in global competitiveness. The first official meeting was on Feb 23, 2007. The principle shared goal by all members in the public and private sectors was to “McDonaldise” government delivery. It was, among others, to ensure accountability, deadlines on action items, and question the need for burdensome rules designed to catch less than 1% of the abusers.


The Chief Secretary expressed the need for mindset changes and encouraged ministries and agencies to take proactive initiatives, even beyond what Pemudah may recommend or emphasise.


The private sector representatives expressed concern about flip-flops on decisions and the need to shake the bushes with stakeholders before the implementation of policy changes or new policies. Among others, they placed importance on Malaysian Investment Develop­ment Authority’s empowerment as a one-stop shop, enhancing the “rule of law” and a review of unnecessary procedures in order to speed up delivery. The mindset change was to transform processes to achieve transaction completions in days, rather than months.


Government and private sector processes came under the lens of both effectiveness and efficiency – “doing the right things right”. Nothing was sacred – neither entire organisations nor processes within or across ministries and sectors. The focus was not only on improving what was in place, but also defining new measures, processes, or Acts.


Indeed, when Prime Minister Datuk Seri Najib Tun Razak met with Pemudah, he expanded its role to cover not only business but other outcomes which affected the rak­yat.


Ultimately, sustainability of the transformation process requires a mindset change. The Pemudah model takes the public-private relationship beyond dialogues that are simply an often inconsequential airing of issues and gripes. It moves it to a higher plateau of shared responsibility for effecting change in the status quo. The private sector is invited to sit equally at the same table with government officials and the collective “team” is charged with the responsibility to improve Malay­sia’s positioning.


PPP collaboration has yielded not only measurable outcomes but it has perhaps, more importantly, yielded a change of mindsets. The public sector has moved from victims and functionals to energised and empowered leadership under the guidance of Pemudah co-chairs Tan Sri Sidek Hassan and Yong.


Of great pride to all Pemudah members is the recently conferred award to Tan Sri Hasmah Abdullah for her efforts in modernising and creating a customer-centric Inland Revenue Board, the modernisation of the judicial system and the creation of Commercial Courts, new guidelines on registering property and many others that Pemudah either directly or indirectly effected.


Pemudah is a work in progress and this PPP remains committed to continue to improve the government delivery system to serve the rakyat and all stakeholders in Malaysia.

God did not create the universe: Hawking

LONDON – God did not create the universe and the "Big Bang" was an inevitable consequence of the laws of physics, the eminent British theoretical physicist Stephen Hawking argues in a new book.

File photo shows Canada's Prime Minister Stephen Harper applauds beside British physicist Stephen Hawking (R) after making an announcement at the Perimeter Institute for Theoretical Physics in Waterloo July 6, 2010. [Agencies]

In "The Grand Design," co-authored with US physicist Leonard Mlodinow, Hawking says a new series of theories made a creator of the universe redundant, according to the Times newspaper which published extracts on Thursday.

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"Because there is a law such as gravity, the universe can and will create itself from nothing. Spontaneous creation is the reason there is something rather than nothing, why the universe exists, why we exist," Hawking writes.

"It is not necessary to invoke God to light the blue touch paper and set the universe going."

Hawking, 68, who won global recognition with his 1988 book "A Brief History of Time," an account of the origins of the universe, is renowned for his work on black holes, cosmology and quantum gravity.

Since 1974, the scientist has worked on marrying the two cornerstones of modern physics - Albert Einstein's General Theory of Relativity, which concerns gravity and large-scale phenomena, and quantum theory, which covers subatomic particles.

His latest comments suggest he has broken away from previous views he has expressed on religion. Previously, he wrote that the laws of physics meant it was simply not necessary to believe that God had intervened in the Big Bang.

He wrote in A Brief History ... "If we discover a complete theory, it would be the ultimate triumph of human reason - for then we should know the mind of God."

In his latest book, he said the 1992 discovery of a planet orbiting another star other than the Sun helped deconstruct the view of the father of physics Isaac Newton that the universe could not have arisen out of chaos but was created by God.

"That makes the coincidences of our planetary conditions -- the single Sun, the lucky combination of Earth-Sun distance and solar mass, far less remarkable, and far less compelling evidence that the Earth was carefully designed just to please us human beings," he writes.

Hawking, who is only able to speak through a computer-generated voice synthesizer, has a neuro muscular dystrophy that has progressed over the years and left him almost completely paralyzed.

He began suffering the disease in his early 20s but went on to establish himself as one of the world's leading scientific authorities, and has also made guest appearances in "Star Trek" and the cartoons "Futurama" and "The Simpsons."

Last year he announced he was stepping down as Cambridge University's Lucasian Professor of Mathematics, a position once held by Newton and one he had held since 1979.

"The Grand Design" is due to go on sale next week.

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Link Between Everyday Stress and Obesity Strenthened With Study Using an Animal Model

ScienceDaily (Sep. 1, 2010) — Stress can take a daily toll on us that has broad physical and psychological implications. Science has long documented the effect of extreme stress, such as war, injury or traumatic grief on humans. Typically, such situations cause victims to decrease their food intake and body weight. Recent studies, however, tend to suggest that social stress--public speaking, tests, job and relationship pressures--may have the opposite effect--over-eating and weight gain. With the rise of obesity rates, science has increasingly focused on its causes and effects--including stress.

A recent study conducted by the Departments of Psychiatry and Biomedical Engineering at the University of Cincinnati College of Medicine, examined the effects of stress on the meal patterns and food intake of animals exposed to the equivalent of everyday stress on humans. The results suggest that, not only does stress have an impact on us in the short term, it can cause metabolic changes in the longer term that contribute to obesity.

The study was conducted by Susan J. Melhorn, Eric G. Krause, Karen A. Scott, Marie Mooney, Jeffrey D. Johnson, Stephen C. Woods and Randall R. Sakai at the University of Cincinnati College of Medicine, Cincinnati, OH. Their study was published in the American Journal of Physiology - Regulatory, Integrative and Comparative Physiology.

The Study

Previous studies have found that meal patterns (number, duration and size of meals) can affect metabolism. Studies of both humans and animals have shown that taking fewer and larger meals promotes the gain of fat mass and can increase triglycerides, lipids and cholesterol independent of total caloric intake. Conversely, weight gain--even while overeating--can be prevented by consuming smaller, more frequent meals. Whether social stress alters the microstructure of food intake, however, was unclear.

The current study used the visible burrow system (VBS), an animal model of chronic social stress, which has been shown to produce stress-associated behavioral, endocrine, physiological and neurochemical changes in animals. Long-Evans rats (90 days old) were individually housed for three weeks prior to the experiment. During this habituation time, they were briefly anesthetized and implanted with a unique subcutaneous microchip just behind their ears which allowed for identification and monitoring of feeding behavior. Meal pattern characteristics were measured for seven days during habituation. Data were calculated for each animal for each day and then averaged together to provide an overall habituation measure as a baseline for all of the conditions.

For the experiment, rats were formed into colonies, composed of four males and two females, and matched with a control group. Within a few days, all colonies formed a hierarchy which established the dominance of one male and the subordination of the other three males. Each colony had equal hours of light and darkness. Meal pattern characteristics were calculated for each animal on a daily basis. As documented by behavioral video analysis and microchip data, both subordinate and dominant rats reduced their initial food intake and body weight compared to the habituation period and as compared to the control group. After the hierarchy was stable, however, the dominant rats recovered their food intake relative to the control animals, while the subordinate rats continued to eat less by reducing their number of meals. Furthermore, although rats are nocturnal animals, the subordinate rats ate primarily during lighted periods, indicating a shift in circadian behavior.

The Result

After two weeks, the male rats were individually housed for a three-week recovery period and allowed to eat freely. Compared to the control group, both dominant and subordinate rats over- ate during the recovery period, but the dominant animals ate more frequently, while the subordinate animals ate larger meals, but less frequently. The dominant rats gained weight and lean mass, but only as comparable to the control group, while the subordinate rats gained significant fat in the visceral (belly) region. Throughout the recovery period, subordinate rats continued to overeat, eat longer meals and gain fat, suggesting long-term, deleterious metabolic changes.

Interestingly, the study results suggest that the signals controlling ingestive behavior become impaired or are overridden during social stress. Hypothalamic neuropeptide Y (NPY) is a well-known chemical messenger within the hypothalamus that stimulates food intake in times of negative energy balance, possibly by increasing meal size. In this case, NPY did not mediate the consumption patterns of the animals during the VBS period.

Conclusion

This is the first study of its kind to examine meal patterns in real-time during exposure to chronic social stress and during a subsequent recovery period, as well as to begin to evaluate the neuroendocrine and neurochemical underpinnings of the altered ingestive patterns observed. Stress and recovery induced changes in animals' body weight and composition and the alterations in meal patterns observed may have contributed to these physiological changes.

Stress is experienced by animals and humans on a daily basis and many individuals experience cycles of stress and recovery throughout the day. If, following stress, we consume larger and less frequent meals, the conditions are favorable for weight gain--especially in the abdomen. We know that belly fat, as well as stress, contributes to the development of cardiovascular disease, immune dysfunction and other metabolic disorders. Further studies using the VBS model will help us understand the relationship between stress and obesity and help us treat and prevent the development of these diseases.

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