Editor: John Arnold. E-mail jarnold@creditman.co.uk
Pat Williams. E-mail pwilliams@creditman.co.uk
Site: Business Credit Management UK
URL: http://www.creditman.co.uk
Issue: Vol 6 Issue 8
Dated: 24 February 2002
Welcome to the Business Credit News UK.
In this weeks edition you will find the following topics.
CREDIT 2002, the definitive exhibition & conference for the UK commercial and consumer credit industry, plays host to the largest gathering of credit professionals in the UK, showcasing the complete range of credit related products, services & applications and the 'all new' Credit Management Conference - incorporating The Management Forum.
So, whether you are a senior executive within the financial world or a manager at the centre of a credit function, CREDIT 2002 is the IDEAL opportunity this year to witness, discover, interact and network with the leading figures of the Credit Management industry - worldwide. For more information and to REGISTER, please visit the website at www.credit-expo.co.uk
UKRETAIL SALES AND TAX RISE POINT TO FURTHER RATE CUT
Reacting to the latest UK retail sales data by the Office of National Statistics (ONS), which were released last Thursday, Ian Fletcher, Chief Economist at the British Chambers of Commerce, said:
“These retail figures open the door slightly more ajar for an interest rate cut in the coming months. It is far too early to say that the economy is faltering, but if the slowdown on the high street continues, then consumers might need a helpful nudge from the Bank of England.
"Of greater significance are the Prime Minister's comments about the NHS on Wednesday, which add weight to the argument for future interest rate cuts. If general taxation is to rise to help pay for public services, then this provides the MPC with greater scope to loosen monetary policy."
BLAIR OPENS DOOR TO TAX HIKES
The Prime Minister, Tony Blair, has given the strongest indication yet that the government is preparing to raise taxes in the April 17 Budget to pay for improvements to the National Health Service (NHS).
Strongest tax message yet
Speaking on BBC television's NHS day, Blair said: "If we want sustained investment in the NHS over a period of time we are going to have to pay for it and I believe we will find that money."
Blair was responding to a poll created for the show which found that 69% of people want taxes to be earmarked specifically for health.
The government says that it will not raise income tax, so the money will likely come through national insurance contributions or indirect taxes. Analysts believe that any tax increases would almost certainly affect businesses.
Earlier yesterday, the health secretary, Alan Milburn, said that people would be prepared to pay extra for improvements.
"I think people know if they want a better health service they have to pay for it. We haven't ruled out tax rises," he told BBC Radio Five.
New NHS league tables have revealed the service in dire need of a revamp. The figures showed a large increase in the number of re-admissions to hospital because patients are released too soon.
The prime minister's comments followed the release of new figures showing that public finances shrank £4 billion in January to a surplus of £12.2 billion - a fact that will add pressure on Chancellor Gordon Brown's spending plans ahead of the Budget.
MANUFACTURERS EXPECT OUTPUT WILL STOP FALLING FOR FIRST TIME IN SIX MONTHS - CBI SURVEY
After six months of reporting falling output expectations manufacturers now say they expect output volumes to remain stable over the next four months. That is the key finding of the CBI's February monthly Industrial Trends Survey out last Thursday.
Asked about output volumes over the next four months, 28 per cent of manufacturers said they would be up while 27 per cent said they would be down. The balance of plus one per cent is the first positive balance since July 2001 and represents a bounce back over the last two months from December's three year low of minus 28 per cent.
Among the main industrial sectors, food, drink and tobacco and motor vehicle manufacturers expect strong rises while the aerospace sector anticipates a sharp fall.
Total order books are still significantly below normal but have risen back slightly to levels last seen before 11 September 2001. Thirteen per cent of manufacturers said total order books were above normal, 42 per cent said they were below. The balance of minus 29 per cent was last seen in August 2001 and compares with minus 31 per cent in January and minus 34 per cent in December.
Manufacturers of goods bought directly by consumers are not suffering as much as those selling to other firms. Manufacturers of intermediate products and, to a lesser extent capital goods, reported order books the furthest below normal while makers of consumer goods said they were only modestly below normal.
The smallest manufacturers, those with less than 200 employees, reported the weakest order books. The largest, those with over 5,000 employees, were the least negative.
Export demand is still very weak. February's balance of minus 40 per cent compares with minus 42 per cent in the January survey. The balance of firms reporting more than adequate stocks has fallen slightly compared with last month. Plus 18 per cent compares with plus 19 per cent in January but is down significantly on the plus 26 per cent recorded in December which was the highest figure since November 1998.
Doug Godden, CBI Head of Economic Analysis, said: "In this survey we appear to be seeing the first signs that the severe squeeze on manufacturing is starting to ease. But it would be wrong to overstate the good news.
"While this is the first time since last summer that manufacturers have not been expecting a fall in output they are not expecting an increase either. Order books are still well below normal and both profit margins and prices are still under severe pressure.
"It won't be until the next survey that we see whether these, more positive, expectations are borne out."
Manufacturers expect prices to continue to decline, though the rate of decline is easing. Ten per cent said they expected to book domestic orders at higher prices, thirty per cent said they expected prices to be lower. The balance of minus 20 per cent compares with minus 23 per cent in January and minus 29 per cent in December.
Publishing its first economic forecast this year, the CBI said the annual growth rate is expected to slow to 1.8 per cent in 2002 compared with 2.4 per cent last year, but the economy would recover as the year unfolds. The outlook for this year has been revised up by 0.1 percentage points since the November forecast, reflecting improved prospects for exports. Economic growth is expected to pick-up in 2003 to 2.7 per cent.
Consumer spending is expected to grow by 1.9 per cent overall in 2002, and is expected to slow as real income growth will be much more modest than in recent years. A steady rebound in consumption is expected in 2003.
Inflation pressures are expected to wane as consumer spending growth slows. Underlying retail price inflation should remain below the government's 2.5 per cent target. It is expected to reach 2.2 per cent by the fourth quarter of this year and 2.1 per cent in the fourth quarter of 2003.
Introducing the forecast, CBI Deputy Director-General, John Cridland, said: "The UK economy is giving a good account of itself during a tough global slowdown. Although consumer spending is expected to weaken later this year, it should be compensated by stronger export growth as the international economy comes out of recession."
The forecast assumes interest rates of 4.25 per cent by the end of this year and 5 per cent by the end of 2003. The public sector balance is expected to fall into deficit this year, widening to £2.1 billion in 2002/03 and £13 billion in 2003/04.
Growth in export volumes is forecast to average 1.6 per cent for this year as a whole compared with 0.9 per cent in 2001. As world trade picks up export volumes are set to rise to 3.1 per cent in 2003. Growth in imports is also expected to remain strong this year as domestic demand maintains momentum supported by government spending.
Manufacturing investment is set to continue to contract while private services investment remains weak.
Job losses are expected to increase during this year. Unemployment, on an ILO basis is set to rise to over 1.62 million by the end of this year, falling back to 1.51 million in 2003 as both the global and UK economy rebound.
UK BUSINESSES MOST RELUCTANT TO SPEAK OTHER LANGUAGES
New research shows that whilst most European countries embrace foreign languages, the UK and Ireland are being left behind. Executives in the UK and Ireland are less inclined than ever to learn a second language, according to new research from business and financial advisers, Grant Thornton.
Grant Thornton's European Business Survey (EBS), now in its 10th year, shows that while the rest of Europe are bi-lingual or multi-lingual, there has been a steady decline in the number of British and Irish business people who are able to negotiate in more than one language.
Only 28% of executives in the UK claim to be able to negotiate in another language, placing the UK only 1 per cent ahead of Ireland, who sit firmly at the bottom of the table. This contrasts with four out of five EBS respondents in Denmark, Finland, Luxembourg and Poland who say they could conduct business in another language and three-quarters in Belgium, Greece, the Netherlands, Norway, Portugal, Sweden and Switzerland who say the same.
There has been a steady decline in the number of UK and Irish executives who speak a second language since the beginning of EBS, 10 years ago. Back in 1992, 44% in the UK had a second business language. In 1997 the number dropped to 38% in the UK and 31% in Ireland, compared to 29% and 28% in both countries today.
EBS 2002 also shows that the UK's language disadvantage may have had an effect on it's overseas trade because, in addition to the number of executives with a foreign language ability going into decline, the proportion of UK SMEs who export has dropped significantly from 49% in 2001 to 33% this year.
Commenting on the results, Andrew Godfrey, Head of International and European Services at Grant Thornton said: "With the UK Government announcing its 10-year strategy to improve language teaching, this research shows it is clearly needed. However, the UK and Ireland already seem to take languages much less seriously than the rest of Europe and these new plans will allow pupils to drop languages at the age of 14, making it even more difficult for businesses to get linguists they need.
I believe that English is increasingly becoming the business language of Europe, but to obtain maximum competitive advantage and grow through exports, it is vital that the Government helps businesses nurture multi-lingual employees, not hinder them. The UK is already one of only three EU countries not trading in the euro and our lack of enthusiasm for other languages means we may be in danger of being left behind on the European stage."
Grant Thornton can be found at www.grant-thornton.co.uk
Research for the survey was conducted between 11 and 30 September 2001 across 19 countries including all 15 member states of the European Union plus Norway, Poland, Switzerland and Turkey. Questionnaires were sent to 59,000 companies with between 10 and 250 employees or that have a turnover of between 1 and 50 million Euro. Responses were received from 4,496 companies yielding an overall response rate of 8.4 per cent.
The first European Business Survey was published in May 1993. It remains the only survey of its type to be undertaken among small-to-medium sized enterprises on a European-wide basis. Now in its tenth year, it makes a contribution to trend information on the SME sector, to which around 90 per cent of European businesses belong.
Business Strategies, a research and economic forecast consultancy has collaborated with Grant Thornton throughout the 10 year history of the European Business Survey - for further information visit www.business-strategies.com
FARMERS' GRANTS TOP £7 MILLION WITH NEW GOVERNMENT AID PACKAGE
Farmers and rural business will receive a further £2 million boost from the government to aid their recovery from the effects of foot-and-mouth disease.
The cash will be shared by 17 successful bidders and takes the total amount given out under the Agriculture Development Scheme (ADS), to £7 million - £2 m was awarded in 1999 and £3 m in 2000.
ADS was designed to improve the marketing performance and competitiveness of the English food industry. Top priorities for this round of funding were projects which would contribute best to helping post-FMD recovery, which would benefit a large proportion of producers or an entire sector, and which demonstrated commitment from a wide range of partners from different parts of the supply chain.
Successful bids include schemes to improve breeding stock, make better use of dairy calves, and to develop better integrated and more responsive supply chains. A list of successful bids is attached.
Food and Farming Minister Lord Whitty said:
"We promised a range of measures to help the farming industry to help itself and establish a more viable and competitive industry in the aftermath of FMD.
"The projects we are supporting demonstrate that the industry has both the will and the ideas needed to improve marketing and competitiveness. Many of them will benefit not only the immediate applicants but, if successful, other parts of the industry - whether through the spread of best practice and new ideas or through the availability and use of improved breeding or fattening stock."
30% LOWER RETIREMENT INCOME LIKELY FOR MANY IN LOW FUNDED DEFINED CONTRIBUTION PENSION SCHEMES
Research by KPMG Pensions has found that nearly half (43%) of companies running defined contribution pension schemes are making contributions of 5% or less, while in a typical final salary scheme companies will make contributions of 10% or more. With defined contribution plans typically having combined employer and employee contributions of 10% or less of an employee’s salary, an employee is likely to receive a pension around 30% less than in a typical final salary scheme.
“More and more companies are closing down their final salary schemes, some even to existing members, and switching to defined contribution. Whilst defined contribution schemes make good business sense for employers, it is vital that employees make much higher levels of contributions and are aware of the risks inherent in not doing so. Many people could face lean retirements otherwise,” said David Fairs, partner in KPMG Pensions. “The level of voluntary pension saving in the UK is not high and unless employees save more for their retirement, the changes we are seeing will potentially increase the burden on state retirement provision.”
KPMG’s research found that 88% of companies with final salary schemes had seen their pension costs rise in the last few years, and two thirds of them expected those costs to keep on rising unless they took decisive action. The introduction of the FRS17 accounting standard and its expected impact on company balance sheets was a further major concern, cited by almost 40% of companies as a key issue.
“Pensions are now costing business 15% or more of payroll in many cases, and costs year on year have become more volatile. Companies are struggling to manage these financial risks within their business plans – pensions are now a top 3 business issue for many MDs or CEOs,” said David Fairs. “The volatility of costs and the potential impact of FRS17 mean that the days of the final salary pension scheme look numbered.
“FRS17 could still have a serious effect on those companies that have moved to defined contribution schemes, because of their historic pension liabilities,” David Fairs continued. “In many cases, these liabilities for past benefits for employees and ex employees now approach the value of the sponsoring business itself.”
KPMG’s research found that a third (34%) of companies now operate a final salary pension scheme only. 28% operate a defined contribution scheme, while 36% operate both – evidence that change is already well underway as more and more companies close their final salary schemes for future benefits and switch to defined contribution plans. 44% of final salary schemes were already closed to new entrants.
VAT GONE MAD
Last week we reported on the following:
"EU REACHES AGREEMENT ON HOW TO TAX DIGITAL SERVICES PROVIDED OVER THE INTERNET"
"The EU confirmed this week that European consumers buying services delivered electronically over the Internet (e.g. music, games, digital books or pay per view TV) from businesses outside the EU will have to pay VAT from July 2003. The move attempts to create a level playing field between EU and non-EU businesses, to simplify the VAT regime and to safeguard future tax revenues for the EU (until now such services from outside the EU have been VAT free)."
This week we have received the following comment from Nigel Morris-Cotterill of Risk Values
That VAT article is an example of beaurocracy gone mad - and for our Risk Values business - that sells a single piece of software where purchasers purchase an unlock code on line from a third party - we have a mad situation where we have to work out whether a customer is UK based, EU VAT reg, EU non-VAT reg or outside EU and send choose a version with different prices for the unlock code. All we want to do is make the stuff, charge a single price and account for tax properly due. Instead we end up filling in forms for data where we can't see any tax benefit as against a simple regime of tax charged in EU and not outside.
Risk Values may interest your readers - it's a tool to identify those who display a propensity to commit financial crime such as fraud and money laundering. Please take a look at www.riskvalues.com
CHANCELLOR URGED TO TAKE ONE EASY STEP TO IMPROVE ACCESS TO FINANCE FOR SME'S
Small and medium sized enterprises (SMEs) are currently finding it increasingly difficult to secure funding. Larger SME's are particularly suffering because the threshold for the current eligibility to be a "tax efficient" investment is too low and the process too complex say accountants and business advisors, PKF.
The Chancellor could take one easy step to resolve this by raising the threshold of gross assets for the three main methods of raising finance for SMEs - Enterprise Investment Scheme (EIS), Venture Capital Trusts and Corporate Venturing Scheme - from the existing £15m to £30m. This would bring them in line with Enterprise Management Incentive (EMI) share options which were raised in the last pre-budget statement effective from 1st January 2002 - and which are being increasingly taken up by a raft of larger companies.
In order to qualify for tax relief on either personal or corporate investment in an SME, the business's gross assets must not exceed £15m, which restricts a huge number of medium sized businesses from applying. The rules and regulations surrounding the schemes are also extremely complicated and long-winded.
James Welch, PKF tax partner, said "Many of our SME clients are looking to raise finance to see them through the difficult economic climate of the next 12 months and are finding it more and more difficult because there is no tax relief incentive for potential investors if the business's assets are more than £15m.
" By raising the threshold to £30m the Chancellor would be making a quick and easy change to the system which would not increase red tape. Overall, it would allow a much larger proportion of SMEs to benefit and continue to grow and prosper."
* Larger SMEs with gross assets of £15m or more
For more information on the budget, visit PKF's dedicated budget website: www.pkf.co.uk/budget2002
For more information on raising finance: www.sbs.gov.uk
PKF is the eighth largest firm of accountants and business advisors in the UK with more than 1,600 partners and staff operating in over 25 offices around the country. Principal services include: assurance and advisory; consultancy; corporate finance; corporate recovery and insolvency; forensic; and taxation. The firm has particular expertise in sectors such as: charities; technology and e-commerce; hotel and leisure; small and medium sized companies; inward investment; medical; professional partnerships; and public sector. PKF's web site address is www.pkf.co.uk. PKF also offers financial services through its FSA authorised company, PKF Financial Planning Limited.
PKF is a member of PKF International, which has more than 8,000 people operating in over 100 countries around the world.
Credit cards are leaving consumers confused
The presentation of credit card APRs is confusing consumers and not helping people choose the best deal for them. This needs to change, Consumer Minister Melanie Johnson said this week.
She published a report following the Government's consultation on modernising the consumer credit laws last year. It shows overwhelming support for the Government's approach with key priorities for action which include clamping down on loan sharks, magnifying the small print and putting a stop to irresponsible lending.
The report also identifies further areas of work - including credit cards APRs - which the Government will now take forward as part of its two-year rolling programme of reform.
Melanie Johnson said:
"We must deliver a far better deal for consumers in today's credit market to give them the protection they deserve - that's why we have embarked on a massive overhaul of our credit laws.
"With the multitude of credit offers today, consumers need to be able to compare different products with ease to decide on the best deal for them."
"Currently, APRs quoted for credit cards are confusing and do not allow consumers to compare products like for like. This needs to change."
The massive shake-up of consumer credit laws will:
- Look at standardising the way credit card APRs are calculated and presented so that consumers can compare products with confidence. Currently, a number of different APRs are quoted for the same credit card which makes it difficult for consumers to decide which one is right for them.
- Change the licensing regime to keep loan sharks out of the market.
- Increase protection for consumers against extortionate credit.
- Regulate more credit agreements by increasing the Consumer Credit Act financial limit and reducing the number of exempt agreements.
- Enable consumers to carry out credit agreements on-line.
- Simplify the advertising regulations to ensure greater transparency.
- Give consumers a fairer deal when they want to pay off a loan early by amending the early settlement regulations.
This work complements action the Government is already taking on tackling overindebtedness and providing advice to those consumers with debt problems.
The Task Force on Overindebtedness published a report in July 2001 recommending further work in a number of areas. Five working groups have been set up take this work forward. They are working on:
- key questions consumers should ask before taking out a loan. The Group has identified a set of questions and we are now planning to trial these with consumers;
- identifying best practice in certain marketing techniques, in particular the use of pre-approved loans, credit card cheques and unsolicited increases in credit limits;
- the provision of key information to consumers before they take out credit, (What should be included? How should it be presented?) and cooling-off periods;
- the selling of payment protection insurance, in particular the need for a separate signature when taking out PPI on a credit agreement;
- secured lending warning statements. One of the Group's recommendations is the inclusion of a wealth warning on secured loan agreements to make it clear to borrowers that their home could be at risk of repossession.
The working groups will report back to the Task Force shortly. The Task Force also recommended research into the cause, effect and extent of overindebtedness. The government have commissioned MORI to carry out this research and expect the results will be published in early summer.
Telephone and online debt advice lines will be piloted in three sites around the UK in partnership with the Money Advice Trust. The helplines will also help consumers draw-up debt repayment plans. The pilot schemes in Birmingham, Cornwall and Fife will end in March 2003.
The Task Force on Overindebtedness was set up in October 2000. Its members who include representatives from the credit industry, Government, and consumer organisations came together to focus on practical ways of achieving more responsible lending and borrowing.
Citizens Advice Bureaux dealt with nearly one million enquiries about debts in 2000/01. Over 600,000 of those enquiries related to consumer debts - including loans, credit cards and overdrafts.
NACAB's key tips for dealing with debt:
- Don't panic and don't ignore the problem - debt problems don't go away
- Avoid borrowing more to try and pay off existing debt
- Talk to your creditors about your difficulties
- Work out which debts are your priorities eg. mortgage, rent, utilities and pay them first
- Work out a budget that covers all your income and essential outgoings. Only offer to pay off debts at a rate you can keep up - it is easy to be panicked into offering more than you can afford.
- Debt advice is available for free from the CAB - you don't have to pay.
MAJOR CREDIT CARD COMPANIES AGREE TO CHANGE ADVERTS
Greater clarity for introductory rates of interest
Twenty eight credit card companies have agreed to change the way they advertise introductory rates of interest. They include the major card issuers such as high street banks and finance houses.
The companies named below have agreed not to describe introductory interest rates as APRs (annual percentage rate) after the OFT expressed concern that this practice breached consumer law and could mislead consumers. Examples of such adverts for introductory rates included phrases such as: '0% APR on balance transfers for six months' or '3% APR fixed until 1 July 2002'. Consumer credit law says that the APR should measure the overall charge for credit, including interest and other charges over the lifetime of an agreement. A temporary interest rate therefore cannot be called an APR.
The OFT wrote to the credit card companies under its Stop Now powers which speed up action against businesses which do not comply with a range of existing consumer laws.
John Vickers, Director General of Fair Trading said:
'Straightforward advertising is vital for consumers and competition in the credit market. APRs allow consumers to compare deals in a clear and simple way. The OFT is pleased to have secured agreement to stop the misleading use of "introductory APRs". This shows how Stop Now powers can get positive, swift and proportionate results.'
The companies who have agreed to change their advertising are Abbey National plc, Alliance & Leicester plc, The Associates, Bank of Scotland, The Boots Company plc, Capital One Bank (Europe) plc, Clydesdale Bank plc, Direct Line Financial Services Ltd, Egg plc (Prudential Banking plc), Furness Building Society, Halifax plc, Hamilton Direct Bank, HFC Bank plc, HSBC Bank plc, Liverpool Victoria Friendly Society Ltd, Lloyds TSB Bank plc, MBNA Europe Bank Ltd, Morgan Stanley UK Group, National Westminster Bank plc, Nationwide Building Society, Paramount Bank, People's Bank of Connecticut, Providian National Bank, RBS Advanta, The Royal Bank of Scotland plc, Sainsbury's Bank plc, Tesco Personal Finance Ltd, Woolwich plc.
A paper 'The OFT's Approach to Stop Now Orders: Consumer Credit Issues' is available on the OFT website www.oft.gov.uk
Under the Stop Now Regulations, the OFT can apply for a Court order against traders who breach or are threatening to breach a number of laws harming the collective interests of consumers covered by those laws. It can seek written assurances in lieu of court action. The Regulations cover the following areas: doorstep selling, timeshare, unfair contract terms, consumer credit, distance selling, package travel, package holidays and package tours, misleading and comparative advertising, sale of goods rights, TV broadcasting activities and advertising of medicinal products for human use.
The APR means the annual percentage rate of charge for credit determined in accordance with the Consumer Credit (Total Charge for Credit) Regulations 1980 SI 1980/51 (as amended) and, in relation to advertising, Schedule 3 of the Consumer Credit (Advertisements) Regulations 1989. SI 1989/1125 (as amended).
NEWS FROM COMPANIES HOUSE
The Directors Register cleansing exercise was completed in December as planned. The team successfully merged 277,432 duplicate entries. To date the team has also linked together 266,932 entries where more than one address existed for a person or company. The final total for the linking stage will be known in April, when the last of the changes are passed through our merge programmes and systems updated.
The team is currently working on the mop-up exercise resolving duplicate issues that have arisen since January 2001. This work will be completed mid March, however the amendments will not be completely visible until early July.
We are currently reviewing our merge & match software, which is looking at ways of maintaining the quality improvements made by the team and expanding our ability to identify and correct duplicates as they occur.
Further internal work is being carried out to introduce new preventative measures, which includes spell checks for names and post towns. The name spell checker is already in place and has had an immediate positive impact on our internal quality figures.
IMPORTANT CHANGES TO SCOTTISH LAW
There has been a court decision which fundamentally changes Scotland's pre judgment remedies and I would like to share this information with you to ensure your readers are fully up to date with developments which could have a bearing on any litigation you are conducting in Scotland.
In Scotland we have a pre-judgment remedy known as inhibition.This can be granted either before or after decree is granted. Practically if the Pursuer(claimant) wants it he will get it and it is used as a means of ensuring the defender is able to satisfy the court's judgment. In effect it is security for the debt.
Its effect practically prevents the defender from disposing of his fixed property. As far as pre- judgment applications are concerned these are virtually granted automatically.
There has just been a decision from the Court of Session which clearly states the granting of an inhibition pre judgment is incompatible with the Human Rights Act. The decision does not affect the post- judgment position. Inhibitions prior to judgment will only be granted if strict criteria are met.
I will be writing an article on this subject over the course of the next few days but I thought your readers should be made aware of these changes at the earliest possible date. If anybody would like to discuss this with me then please call on 0141 572 4251 or email me at scowan@yuill-kyle.co.uk
Stephen Cowan
Yuill&Kyle, Debt Recovery and credit Control lawyers, Scotland
Telephone 0141 572 4251
Email scowan@yuill-kyle.co.uk
www.debtscotland.com
EQUIFAX AND NATIONAL TELECOMMUNICATIONS DATA EXCHANGE, INC. SIGN $5 MILLION DEAL
Equifax Inc. (NYSE:EFX), a leader in information management, announced it has been awarded the $5 million National Telecommunications Data Exchange, Inc. (NTDE) contract for the next five years - the third consecutive time this contract has been awarded to Equifax. Equifax has managed the NTDE database of default commercial account information from 72 telecommunications companies since 1995.
The NTDE provides information in a manner which permits early identification of "risk accounts" among new service applicants. This unique forum enables telecommunication companies to share information on businesses that have left a carrier with an unpaid final bill. Members use the data to assess potential credit risk when considering an application for service. Data is also used to assist in skip tracing and to prescreen marketing/prospect lists.
"Equifax's mission of enabling global commerce is exemplified by our development of NTDE and 14 other Exchanges," said Paul Springman, Equifax Group Executive, Global Sales. "The exchange business is a core competency, and we are pleased that NTDE has renewed the contract with us."
"We have been very pleased with Equifax's handling of the data," said Alice Haslam, executive director of NTDE. "Equifax constantly works to improve the Exchange capability by improving the matching algorithm, developing easier-to- read reports and offering additional secure channels for transmitting and receiving data. Past performance and the anticipation of future performance is one of the leading factors in continuing our relationship with Equifax," Haslam said.
As a credit risk tool, NTDE is unique in the marketplace. NTDE was built and is maintained in collaboration with 72 telecommunication companies who regularly submit millions of records from their customer bases. The result is a credit risk tool that identifies non-payment behavior unique to telecommunication customers, which differs from the behavior of those same customers becoming delinquent on their commercial credit accounts.
"NTDE houses over $1.2 billion in total bad debt," said Glenn Schwartz, president, NTDE. "Considering that the average commercial write-off can be quite large, preventing just one high-risk commercial account from being put on the books represents enormous savings. In the past three months, more than 1,000 matches of unpaid balances of $100,000+ were made. NTDE alerted member companies to a huge risk," Schwartz said.
COLLECTIVE INVESTMENT SCHEMES TO BE EXEMPT FROM 20 PARTNER LIMIT
The Government has announced that it is to remove the 20 partner limit on limited partnerships carrying on business as collective investment schemes.
The announcement which comes into effect on 22 March will apply to limited partnership collective investment schemes which are authorised by the Financial Services and Market Act 2000. The limited partnership has become the market standard for private equity funds and this exemption will cover the majority of such funds.
Melanie Johnson MP, Minister for Markets said:
"After consulting with investment managers it became clear to us that the law as it stands is putting UK business at a disadvantage internationally and preventing firms from expanding.
"We want the UK to remain at the heart of investment activity in Europe and we have taken quick and decisive action to remove this unnecessary regulation and bring real benefits to the City."
The 20 partner limit on limited partnerships was imposed by the Limited Partnerships Act 1907, with only certain professions such as solicitors and accountants exempt from the regulations. This announcement means that limit partnership collective investment schemes will also be exempt.
The Government first announced its intention to totally remove the 20 member limit on business, by means of Regulatory Reform Order, in November last year following widespread consultation. The draft legislation implementing this proposal will be presented to Parliament later this year. Today's move will mean that collective investment schemes will benefit quickly.
Section 4 of the Limited Partnerships Act 1907 prohibits the formation of limited partnerships with more than 20 partners.
Under section 717 of the Companies Act 1985 certain professions carrying on business as limited partnerships are automatically exempt from the 20 partner rule. Section 717 also confers powers on the Secretary of State to make regulations granting further exemptions.
Information about the Regulatory Reform Act 2001 can be found at: www.cabinet-office.gov.uk/regulation/act/index.htm
Following extensive discussions, Land Rover and KPMG, the Administrative Receivers of UPF (UK) Limited, have last week reached an agreement which will safeguard jobs at both Land Rover and UPF and guarantees the supply of chassis for the popular Discovery model.
The settlement involves the acquisition of the debt by Land Rover, who will facilitate the continuation of the business through a number of committed parties. The exact details of who will assume responsibility for the different sectors of UPF Thompson have yet to be finalised and are subject to due diligence.
Land Rover and KPMG, together with the banks who appointed them, are confident that this is in the best interests of all concerned parties and that the agreement comes as a result of the professional conduct of all parties throughout the negotiations. All parties acknowledged that this was a complex case with potentially wider implications for British industry and are therefore delighted to have reached a win-win resolution.
KPMG SELL THE MARSHALL PUBLISHING DIVISION OF JUST GROUP PLC (IN ADMINISTRATION)
KPMG Corporate Recovery Partner, Allan Graham the Joint Administrator of Just Group PLC, have announced the completion of the sale of the business and assets of Marshall Editions Developments Limited, Marshall Editions Limited, Marshall Publishing Limited (all in administration) to Quarto
. Quarto are a London based international book publisher who have acquired the rights to a large number of well known backlist titles, as well as other publishing assets.
Allan Graham said:
“We are delighted to have achieved the sale to Quarto. All other businesses in the Just Group remain available for sale and we’ve received a high level of interest in each of these.”
Allan Graham and Mick McLoughlin of KPMG Corporate Recovery were appointed joint Administrators to Just Group PLC on 9 January 2002.
INTERNET INSURANCE CON FOILED AFTER DTI INVESTIGATION
Judge blasts "devious and dishonest" director
The director of a company which sold motor warranties over the Internet has been slammed by the High Court for misleading the public.
The damning verdict on Mr Shahrooz Ghassemian, sole director of Equity & Provident Ltd, came as the company was wound up in the High Court on 19 February.
Presiding judge, Mr Justice Patten said that Mr Ghassemian's conduct of the company affairs had been "wholly unacceptable".
"I am afraid to say that he struck me as both devious and dishonest and in short was willing to say or do anything to fend off the legitimate enquiries of the regulatory authorities", he said.
Equity & Provident was shut down in the public interest following probes by DTI investigators.
During the course of the investigation it emerged that the company:
The main finding against the company was the misleading nature of the motor warranty cover it sold over the Internet at www.equity-provident.com
For around £140 a time, customers bought warranties which they believed would provide replacement car parts free of charge. In reality, the company did nothing more than promise to consider claims made under the warranties. There was no obligation to pay out.
Mr Justice Patten agreed with the DTI's complaint that the company did not give a true indication of the nature of the policies, and said that any customers buying them would not be aware they were "potentially if not actually worthless".
In his defence, Mr Ghassemian claimed that the company had honoured many of the policies and provided hand-written forms from claimants in evidence.
The judge remarked that he had "doubt about the reliabililty of this evidence", when it was discovered that the majority of the claimants were either not listed on the electoral roll or were dead.
Mr Ghassemian from Kensington, West London, who also used aliases including Shahrooz Ghassemian-Langrody or Shahrooz Langroody, could not be relied on to run the business properly in future and the Judge ruled that it should be wound up with immediate effect.
Consumer Affairs Minister Melanie Johnson said:
"It's down to the dogged determination of our investigators that we have managed to get this company shut down once and for all, and stop more people from being conned."
"Our immediate concern is to close the website, which is still offering these worthless policies. In the mean time, we urge members of the public to stay away from this website, which is now nothing more than a front for a defunct company."
A petition to wind up the company in the public interest was presented by the DTI on 15 May 2001.
The Official Receiver has been appointed liquidator of the company and will be responsible for investigating the conduct of the director in relating to the businesses. In appropriate cases the Official Receiver can take disqualification action or refer the matters for prosecution.
Anyone who has had any dealings with the company since 15 May 2001 should contact the Official Receiver at the following address:
The Insolvency Service
Public Interest Unit
PO Box 203
21 Bloomsbury Street
London WC1B 3SS
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TW LW TW LW
USA 1.43 1.43 Canada 2.27 2.28
Austria 22.54 22.59 Portugal 328.47 329.18
France 10.74 10.77 Belgium 66.09 66.23
Finland 9.74 9.76 Italy 3172.46 3176.19
Germany 3.20 3.21 Sweden 15.17 15.17
Holland 3.61 3.61 Switzerland 2.43 2.43
Spain 272.61 273.19 Ireland 1.29 1.29
Australia 2.77 2.82 Denmark 12.19 12.19
Hong Kong 11.17 11.20 Euro 1.64 1.64
Africa Com 16.47 16.53 Saudi Arabia 5.38 5.38
India 69.67 66.90 Malaysia 5.45 5.45
Singapore 2.62 2.62 Norway 12.83 12.83
Japan 191.57 190.95
TW This week LW Last week.
America's Globalstar filed for Chapter 11 bankruptcy protection with debts of $3.3 billion.
The non-emergence of credible bidders for Olympic Airways forced the Greek government to abandon a privatisation and announce a restructuring of the flag carrier that would see 9,000 of its staff laid-off.
Freshly privatised, Britain's Air-Traffic-Control System was bailed-out by the government to the tune of GBP30m ($43m) after it had forced the privatisation through in the face of considerable opposition.
Source - The Economist
Brandon Hire, the tool hire company, announced pre-tax profits of 3.3 million pounds, on turnover of 30.1 million, for the year ending 31st December 2001. Earnings per share stand at 9.8p.
Logica, the information and technology company, announced pre-tax profits of 61.6 million pounds, on turnover of 600.2 million, for the six months ending 31st December 2001. Earnings per share stand at 9.1p on increased capital.
Reckitt Benckiser, the household goods group, announced pre-tax profits of 498 million pounds, after exceptional credit, on turnover of 3,439 million, for the year ending 31st December 2001. Earnings per share stand at 50.8p.
Spirent, the network technology group, announced pre-tax losses of 730.7 million pounds, after exceptional charge, on turnover of 880.1 million, for the year ending 31st December 2001.
Workspace announced pre-tax profits of 8.89 million pounds, after exceptional credit, on turnover of 28.9 million, for the nine months ending 31st December 2001. Earnings per share stand at 40.7p.
MERGER NEWS
The Secretary of State for Trade and Industry has decided, on the information at present before him, and in accordance with the recommendation of the Director General of Fair Trading, not to refer the following merger/s to the Monopolies and Mergers Commission under the provisions of the Fair Trading Act 1973:Proposed acquisition by The Royal Bank of Scotland of 456 pubs from Scottish & Newcastle
Proposed acquisition by Northern Foods of Kerry Group's fried products business
Proposed establishment of a new industrial and provident society through the acquisition of the entire issued share capital of Zenith Milk Ltd and The Milk Group Ltd
JOHNSON ACCEPTS UNDERTAKINGS ON LLOYDS TSB/ABBEY NATIONAL
Competition Minister Melanie Johnson has accepted undertakings from Lloyds TSB Group plc in relation to Abbey National plc.
The undertakings prevent Lloyds TSB from acquiring Abbey National's personal current account or SME businesses.
This follows the Competition Commission report of 10 July 2001, which concluded that the transfer of these parts of Abbey National's business to Lloyds TSB would be against the public interest.
Ms Johnson said:
"The DGFT has advised me to accept these undertakings. I believe that they will satisfactorily address the adverse effects identified in the Competition Commission's report."
The parties have already signed the undertakings.
The Competition Commission's report on the proposed acquisition by Lloyds TSB of Abbey National was submitted on 10 July 2001, identifying adverse effects only in respect of the personal current account and SME markets. Accordingly, the undertakings relate only to these areas, and do not prevent Lloyds TSB acquiring any other part of Abbey National's business which might come up for sale.
The Fair Trading Act 1973 empowers the Secretary of State to refer to the CC for investigation and report actual or proposed mergers which create or intensify a market share of over 25 per cent of the supply in the UK, or a substantial part of the UK, of particular goods and services, or involve the take-over of assets exceeding £70 million.
Copies of the CC report (Cm 5208) are available from The Stationery Office.
H & H CELCON LTD/MARLEY BUILDING MATERIALS LTD: COMPETITION COMMISSION INVITES EVIDENCE
Patricia Hewitt, Secretary of State for Trade and Industry, has asked the Competition Commission to look into the proposed acquisition by Celcon of Marley Building Materials (MBM).
The Commission will look at all aspects of the merger's likely effects on the public interest, including the impact on the supply of aircrete blocks to the construction industry. The Commission has been asked to report to the Secretary of State by 27 May 2002. The report will be published later.
The Commission would like to hear from all interested parties in writing by Monday 4 March 2002. If you wish to submit evidence please write to:
The Reference Secretary (Celcon/MBM)
Competition Commission
New Court
48 Carey Street
London WC2A 2JT
Or email: aircrete@competition-commission.gsi.gov.uk
HEWITT REFERS PROPOSED ACQUISITION BY CARGILL OF CERESTAR
Patricia Hewitt, Secretary of State for Trade and Industry, has referred to the Competition Commission the proposed acquisition by Cargill Incorporated of Cerestar, a producer of starch and sweeteners.
She made her decision in accordance with the advice of the Director General of Fair Trading (DGFT).
Ms Hewitt said:
"The DGFT has advised me that this proposed acquisition raises competition concerns which warrant reference to the Competition Commission.
"I have carefully considered the DGFT's advice and agree with his conclusions. I am therefore referring the proposed merger to the Competition Commission so that it can be fully investigated."
The DGFT has advised that this merger would reduce the number of significant UK producers of glucose syrups and blends from four to three, and give the merged a share of supply in the UK, in terms of sales, of almost 50%.
The decision to make a reference does not in any way prejudge the question of whether or not the proposed joint venture would be against the public interest. It is for the Competition Commission to report on this after investigation. The Commission is to make its report by 9 May 2002.
The Fair Trading Act 1973 empowers the Secretary of State to refer to the Competition Commission actual or proposed mergers which create or increase a market share of 25% of the supply of particular goods or services in the UK or a substantial part of the UK, or involve the take-over of assets exceeding £70 million. Once a reference has been made, the Competition Commission investigates the merger and delivers a report to the Secretary of State on whether or not the merger will operate against the public interest. If a merger is found to operate against the public interest, the Commission may recommend possible remedies.
On 21 January 2002 the European Commission referred part of the above acquisition - that which concerns the supply of glucose syrups and blends in the UK - to the UK competition authorities under Article 9 of the EC Merger Regulation (ECMR). Article 9 (6) of the ECMR imposes a four-month deadline from the EC's referral of a Member State's competent authorities to publish any report or announce their findings on examination of the concentration in question. Under Article 7 of the Implementing Regulation (Regulation 47/98/EC), that period will expire on 30 May 2002.
A new pilot project to reduce court delays and witness waiting times was launched last week by Michael Wills, Minister for the courts at the Lord Chancellor's Department, at Chelmsford Crown Court.
Over a quarter of Crown Court hearings are cancelled on the day they are due to go ahead. Of these, a quarter were due to a witness not attending. There is also evidence to suggest that as little as 3% of police officer time attending court actually involves giving evidence.
The Chelmsford Crown Court pilot uses modern communication technology, including the Internet and mobile phone text messaging to improve the sharing of information about court hearings between the court and:
- other criminal justice organisations: including Essex Crown Prosecution Service, Essex Police, Chelmsford Prison and Essex Probation Service;
- victims, witnesses and Victim Support's Witness Service;
- solicitors and barristers; and
- members of the public and the media.
Michael Wills said:
"Delayed hearings and waiting around in court precincts cause unnecessary stress for victims and witnesses who are keen for justice to be done and to get on with their lives.
"By improving communication between all those involved in a case using technologies that people use today, court hearings are more likely to go ahead on the day, reducing unnecessary trips to court for victims and witnesses, including police officers. It also means that witnesses can be kept better informed so they can spend less time in the court building waiting around to give evidence.
"Modernising the criminal justice system is a priority for the Government. This pilot is part of our programme to provide a Crown Court fit for the 21st Century - one that not only makes the best use of technology, but also offers the level of service that the public and court users have a right to expect."
EXHIBIT (Exchanging Hearing Information by the use of Internet Technology) is being piloted at Chelmsford Crown Court over the next six months and will be extended to Basildon and Southend during March.
It involves each court clerk recording the progress of a case, such as "jury is sworn-in" or "prosecution has started", directly onto a computer in the courtroom as it happens. This information can then be automatically notified to the criminal justice organisations and lawyers involved in the case in a manner of their choosing eg by e-mail, text message to a mobile phone, fax or pager. Court staff can also use the same technology to communicate other hearing information, for example, proposing a change to court schedules if there is an unexpected guilty plea and a gap in the schedule appears.
The Crown Prosecution Office in the Court building also has a screen displaying updates about the progress of cases and allows them to inform witnesses via mobile phone or pager when they will be required in court to give evidence.
The status of the case can also be viewed on public information screens in the court precincts and is available on the Court Service website (www.courtservice.gov.uk and follow the link for Daily Court Status), for victims and witnesses and others interested in a case.
Chris Reynolds, Chelmsford Crown Court Manager, said:
"Offering an improved service to victims and witnesses and other court users is of great importance to Chelmsford Crown Court and we are proud to be leading the way in piloting this new project. We will be able to provide other criminal justice agencies with the information they require more quickly. This will give them the opportunity to improve their efficiency and effectiveness as well as helping the Crown Court."
Deputy Chief Constable John Broughton of Essex Constabulary said:
"We welcome a development such as EXHIBIT. It will allow us to be much better informed about the progress of cases in the court and about the outcomes. The information that it will provide us will be of great assistance in our drive to reduce bureaucracy and to allow our officers to spend more time on front line policing."
Karen Jones, Higher Court Advocate for Essex Crown Prosecution Service, said:
"This innovation should lead to significant improvements in communication within the courts service and with all criminal justice agencies which will also benefit victims and witnesses, leading to greater efficiency."
Frances Sharp, Chelmsford Crown Court Witness Service, said:
"EXHIBIT enables the witness support service to be much better informed about the progress of cases and when each witness will be needed. This will help us to reduce the amount of time that witnesses are kept waiting around and allow us to call them when they are needed.
"The screen in the witness waiting room provides witnesses with regular updates on the progress of the cases that are in court. This goes a long way to increasing confidence in the system and reducing the frustration that can arise."
Fay Hepworth, Senior Probation Officer, Courts, said:
"The information that EXHIBIT will provide us - by email, mobile phone and pager - will greatly enhance our ability to place our staff where they are most needed - in the court room. We will be much better informed about what is happening in each case and will be able to ensure that we provide the quality service that is expected of us."
There will be a comprehensive evaluation of the pilot to allow a clear demonstration of the changes in working practices required to deliver maximum benefit to all of the parties concerned. On completion of the evaluation exercise, the Court Service together with the other Criminal Justice Organisations will agree and plan the most appropriate approach to national implementation.
The Home Office White Paper, "Policing a New Century", identified that there is evidence to suggest that as little as 3% of police officer time attending court actually involves giving evidence. It is available at: http://www.archive.official-documents.co.uk/document/cm53/5326/cm5326.htm
The National Audit Office report, "Criminal Justice: Working Together", published in December 1999, highlighted that in 1998 over a quarter of all Crown Court trials were ineffective. Of these 25% were due to the non-availability of witnesses. It is available at: http://www.nao.gov.uk/publications/nao_reports/990029.pdf
6 - 7 March 2002 Softworld Accounting & Finance Software and E-business event. Grand Hall, Olympia, London Register in advance at http://www.softworld.co.uk/afs2002/register.html 11-13 March 2002 BCR's 2002 Receivables Finance International Conference Four Seasons Hotel, Singapore Website http://www.factorscan.com/static/asianpacific.htm Tel: +44 208 466 6987 Fax: +44 208 466 0654 Email mb@bcrpub.co.uk Wednesday 13 March 2002 ICM National Conference and Exhibition Heritage Motor Centre, Gaydon near Warwick For full details tel 01780-722907 or e-mail training@icm.org.uk Monday 25 March Wessex Branch of the ICM meeting Do Not Get Stung by Guarantees Presented by Jo Johnson of Moore Blatch Solicitors Royal Southampton Yacht Club Southampton 7.00pm for registration and refreshments 7.30pm Speakers 4 April Credit Today Awards 2002 Grosvenor House Park Lane London Black Tie Single Booking 120.00 plus vat. 10% discount to Credit Today subscribers Telephone 01403-786-726 or 020-7407-4700 E-mail sgc@mag-subs.demon.co.uk or awards@credittoday.co.uk or visit www.credittoday.co.uk 7 - 13 April The Credit Academy, 7 day Residential Course FT Knowledge Financial Learning London, 80 Strand, WC2R 0RL Contact Jane Lees - E-mail jane.lees@nyif.com Tel +44 (0)20 7010 2568 17 and 18 April Credit 2002 - The Definitive Event for the Commercial and Consumer Credit Industry Brompton Hall, Earls Court, London For more information contact vtolson@advanstar.com Website www.credit-expo.co.uk 22 - 28 April The Credit Academy, 7 day Residential Course FT Knowledge Financial Learning Venue - Hong Kong, location tbc Time: 08.30 Contact Jane Lees - E-mail jane.lees@nyif.com Tel +44 (0)20 7010 2568 10 - 16 June The Credit Academy, 7 day Residential Course FT Knowledge Financial Learning Venue - New York, location tbc Contact Jane Lees - E-mail jane.lees@nyif.com Tel +44 (0)20 7010 2568 21 June The ICM Fellows Luncheon Churchill Room, The House of Commons Westminster, London Guest Speaker Norman Lamb MP Cost 49.50 GBP inc of vat and all drinks Contact ICM Training Department on 01780-722907 E-mail sheila@icm.org.uk 3 to 5 July Receivables Finance International Europe (2002) Marriott Hotel, Prague Tel: +44 208 466 6987 Fax: +44 208 466 0654 Email mb@bcrpub.co.uk Wednesday to Friday 9 to 10 October International Credit Exhibition & Conference Raffles City Convention Centre Level 4 Swissotel Singapore , The Stamford Singapore Website http://www.internationalcredit001.com/ E-mail info@internationalcredit001.com If you have an event coming up which is credit management related and you would like us to make an entry in the Diary section please e-mail the details to jarnold@creditman.co.uk
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