Spanish unemployment leaps to new high of 26% with 55% of young people out of work

5.97 million without jobs following prolonged recession and spending cuts

It is the highest level since measurements began in the 1970s

Over past 12 months a further 691,700 people have fallen out of work

There are now 1.8 million Spanish households in which no one is employed

And financial experts warn 'we haven't seen the bottom yet'

Spain's unemployment rate has soared to record levels with a shocking 55 per cent of young people now out of work and experts warning worse is to come.
The jobless total rose to 26 per cent in the fourth quarter of 2012, equivalent to 5.97 million people according to the National Statistics Institute and up from 25 per cent in the previous quarter.
It is the highest level since measurements began in the 1970s as a prolonged recession and deep spending cuts left almost six million people out of work at the end of last year.

Crisis: A man waits outside a Madrid employment office. Latest figures reveal Spanish unemployment has reached an all-time high

Over past 12 months 691,700 more people have fallen out of work, the institute said, adding that there were now 1.8 million households in which no one was employed.

'We haven't seen the bottom yet and employment will continue falling in the first quarter,' said Citigroup strategist Jose Luis Martinez.
Spain sank into its second recession since 2009 at the end of 2011 after a burst housing bubble left millions of low-skilled laborers out of work and sliding private and business sentiment gutted consumer spending and imports.

Unemployment in Spain now stands at a record 26 per cent, higher than any other EU country

Efforts by Prime Minister Mariano Rajoy's government to control one of the euro zone's largest deficits through billions of euros of spending cuts and tax hikes have fueled general malaise, further hampering demand.
When Rajoy took office in late 2011 there were 5.27 million jobless in Spain.
The economic downturn put an average of 1,900 out of work every day through 2012 and with the recession expected to last at least until the end of 2013, net job creation is unlikely this year.

Sorry scene: Over the year, 691,700 more Spanish people lost their jobs, meaning there are now 1.8 million households in which no one was employed

Joblessness has been particularly acute for Spain's youth, with 60 percent of people under the age of 25 unemployed in the fourth quarter.
In the fourth quarter, the economy shrank at its fastest pace since the recession began, the Bank of Spain said on Wednesday, dragged down by a steep drop in private consumption due in part to a September VAT hike and public wage cuts.
Spain is in the throes of its second recession in just over three years following the collapse of its once-booming real estate sector in 2008.
Battling to reduce a swollen deficit and avoid a bailout, the year-old conservative government has brought major financial and labor reforms and applied severe cutbacks in wages and spending but so far the economy has shown few signs of recovery.
The austerity measures are aimed at lowering the deficit, but are hurting the economy in the short-term, while the reforms will only help growth in the longer-term. That means the economy will suffer more before it recovers.
The central bank this week estimated that the recession deepened in the fourth quarter of last year, the economy shrinking by 0.6 percent compared with the previous three-month period.
It was the sixth consecutive quarterly contraction. The economy contracted by 0.4 percent in the third quarter.
The bank estimated economic activity was down 1.7 percent in the fourth quarter from the year-earlier period and down 1.3 percent for the whole of 2012.
The statistics institute will announce official economic growth figures on Jan. 30, while Europe's main statistics office Eurostat unveils its estimate on Feb. 14.

'I paid off my Virgin credit card TWICE but got hit with £100 in charges': How phantom interest can ruin your credit score

You would think paying off a credit card would be as simple as checking the remaining balance, and coughing up that amount.
But one This is Money reader found that a card he had assumed had been cleared had a sting in the tail - and would end up costing him more than £100 in sneaky charges months down the line.
Last January, Mark Zimmerling paid off the remaining £3,895.76 he saw was left on his Virgin/MBNA card, the remainder of a balance transfer made a year and half earlier.

Credit car woe: Mr Zimmerling has been left out of pocket and seen a blotch on his credit record after MBNA/Virgin troubles

He assumed the account was then closed. Unfortunately, he didn’t realise that interest had accrued in the time between the balance he saw was issued, and the date he paid.
The first he learned of this was four months later when Virgin/MBNA contacted him to tell him he owed £9.30 interest and a £12 late payment fee for missing the payment - a total of £21.30.

He stated his case over the telephone but decided the best course of action was to pay this off so the account was up-to-date and closed - something he says MBNA/Virgin confirmed to him at the time was the case.
However, in June, he received another letter advising he had missed more payments, with further interest and late payment charges added, to the tune of £36.61.
This was followed by an email telling him his name would be registered with the credit reference agency as a defaulter.

Credit record: Mr Zimmerling says the debacle has dragged his credit rating down

Exasperated, Mr Zimmerling spoke to ’20 different advisers’ to sort the spiraling situation. He also wrote to them stating his case.

He requested that further charges be put on hold until a resolution was found but says this was refused. The fees and interest continued to mount until, in November, Mr Zimmerling received a request for a further £86.20, made up of seven £12 late payment charges plus interest.

It took the amount demanded by Virgin/MBNA overall to £154.11. Potentially even more costly was the damage done to his credit rating. He says his credit worthiness has been ‘ruined’ by the affair, with one agency now rating him as 'very poor’ despite never being in arrears with his mortgage or other credit card before.
He has taken his case to the Financial Ombudsman Service (FOS) but it has told him it could take a further six months to process.
Mr Zimmerling said: ‘I think this is all grossly unfair, unjust and surely not good banking practice. They have been negligent in not advising of the consequences and have racked up their charges because of this.'

This is Money takes up the case

On Friday 18 January 2013 This is Money contacted Virgin about Mr Zimmerling's case, and the company said it would investigate.
A spokesman explained the appearance of the unforeseen interest payments. He said: ‘Because we calculate interest on a daily basis, the balance can change between the customer making the payment and it being credited to their account.
‘This is standard practice across the industry, and any difference is carried over to a customer's next statement.
‘As happened in this case, if this is not paid then interest and charges can begin to accumulate, which is why we encourage all of our customers to check their statements every month and open the letters, read the text messages or respond to the calls we make.’
However, it agreed it could have done more to deal with the issue more effectively, and promised to review the case internally.
It also said that despite the fact the issue is being decided upon by the FOS, it will reimburse the fees and charges, and will also make necessary amendments to the credit file.

VIRGIN MONEY TAKES CREDIT CARDS IN-HOUSE IN BID TO TAKE ON BANKS

Virgin Money stepped up its efforts to become a rival to high street banks with a £1billion deal to run a portion of its credit cards itself.
Virgin announced at the weekend that it would scale down a tie-up with MBNA, a division of Bank of America, and confirmed it mean the purchase £1billion of assets in the process.
While it will still have £2billion of credit card accounts run by MBNA, Virgin did not rule out taking these in house in future as well.
Virgin is expected to launch its own current account before the end of the year that will extend its banking bid even further.

LEE BOYCE: Using just my name and address a fraudster took £1,000 of Wonga loans - yet it won't reveal how this can happen

This is Money’s banking correspondent Lee Boyce fell victim when a fraudster managed to take out payday loans under his name with Wonga.
What has ensued is a number of unsatisfactory responses from Wonga which has left him in the dark as to how the fraud has happened and questioning just how seriously Wonga takes treating fraud victims. He delves a little deeper…

Wonga barrier: The payday lender is staying tight-lipped as to how I became a victim of fraud

On Christmas Eve, I received an unwanted present when I went back to my mum’s house in Essex for the festive period.
Opening old post, as I hadn’t been back to the property since September, I had three separate letters from payday lender Wonga – final demands for money I had allegedly borrowed from it.
I felt my pulse race and hands tremble; I had become a victim of identity fraud and someone had managed to take two loans in my name to the tune of more than £1,000.
Frantically, I called the number on the letter to no avail. Frustratingly, it rung-out. I knew if I didn’t sort it before Christmas, I would struggle to relax.

I took the route not open to most – I called its public relations (PR) team. I explained the situation and I was told it would be looked into. If I wasn’t a journalist with such access to getting a problem I planned to write about looked at, I dread to think how powerless I would have been feeling.
A few days after Christmas, Wonga informed me that it had investigated the situation, the money would be written off and my credit record would be adjusted.
It turns out a fraudster using just my name and address had managed to open a loan.
Two small pieces of information which are easily available – how could Wonga let this fraud happen so effortlessly?
You think this answer could be easily obtained. I asked the payday lender to describe to me, in detail, how the fraud happened. After all, this is just the latest in a spate of Wonga fraud cases that This is Money has seen and as a journalist I felt a duty to explain to others how this can occur.
After a week of waiting, a member of its PR team contacted me to say I was simply a victim of ‘identity fraud.’ It was clear to me it was putting the barriers up with such a derisory response.

Simple information: Just my name and address were needed to open a Wonga loan - in my opinion, the payday lender needs to be much more thorough with its checks

Eventually, a member of its fraud department contacted me and said: ‘I’m afraid we won’t go into how the fraud may have happened as publication may encourage copycat attempts.’
I didn't agree with this statement, but never-the-less I wanted to know for personal reasons as a victim and for professional reasons to get some off-the-record understanding and, as such, wouldn't have published it in this article.
However, Wonga wouldn't even agree to do this.
I have been a victim of fraud, yet it wasn’t willing to tell me how it had happened and I find that disgusting.
I believe I have a right to know, as should any fraud victim, no matter what company they are dealing with.
So, as a journalist I am asking: does Wonga have a fraud problem it is trying to hide from public view and is it all-too-simple for scammers to get cash in your name?
Wonga tells me that 8,000 pieces of data are analysed when assessing a loan application – but the fraudster needed to only use two things  to get a loan, my name and address.
Not even my bank details were compromised. My bank says there is no evidence of them ever having been used for a Wonga account and the lender says they were not put in.
Yes, that’s right; they managed to get the money paid straight into another bank account.
So what I want to know is how they are managing to comb through 8,000 pieces of data in just fifteen minutes to properly check loans?
And how can loans be opened with such little information when, for instance, you need photo identification and copies of bills to even open a current account in a bank?
Getting an answer from Wonga, however, is like getting blood from a stone and it chose not to answer when I asked how its processes work.
I also asked how, if the money was paid into another bank account that is not my own, they cannot establish who the fraudster is.
It said: ‘We did make the bank, which held the account where the money was deposited, aware. Data Protection rules mean they will not share the details with us. You should also inform the police.’ 
Yet This is Money's previous investigations have suggested that it is actually Wonga that should be reporting this to the police, as it is actually considered the victim of the theft, despite this having been done in my name.
Is Wonga at all taking my case seriously? And is it taking other members of the public, who have been victims of fraud, seriously? It certainly doesn’t feel like it and it doesn’t appear the police are being notified by the payday lender when fraud happens.
So what about my all important credit file?
Wonga said: ‘References to the loans have been removed.’
I told it I wanted to check for myself that it had been done, but it took three times of asking to get an answer to which agencies it uses.
All of these hurdles to get the information are very frustrating.
How someone can use just my name and address to access high interest payday loans is frightening. I understand that identity fraud is a widespread problem that affects a number of companies, but what worries me more is how tight-lipped Wonga is about the subject.
I have lodged a Subject Access Request (SAR) with the Information Commissioner’s Office (ICO) in hope this can shed some light about how my data was used and where the money was paid to.
It can take a few weeks for this to be processed – I will keep readers updated when I get the result. I am also in the process of checking my credit report with Experian to make sure Wonga has been true to its word and updated my credit file.
This isn’t an attack at Wonga as a payday lender and the APR rates on its loans - it’s an attack at how frustrating it has been at giving simple answers to questions to someone who has been a victim of fraud.
In my opinion all organisations, not just Wonga, should be more transparent when it comes to this growing problem and advise ways to protect your data from fraudsters in the future.

HAVE YOU BEEN A VICTIM OF WONGA FRAUD?

Wonga states that its fraud rates are some way below the UK average for online transactions – but This is Money’s inbox has had a steamy stream of complaints.
My colleague Tara Evans has reported on Wonga fraud in the past and also has ongoing cases  – some with similar problems as mine highlighted above and others who have had payments for loans they never took out swiped from their current accounts.
Have you been a victim of fraud with Wonga similar to my experience above? Let us know in the comments box below or e-mail lee.boyce@thisismoney.co.uk and tara.evans@thisismoney.co.uk

Brits have paid off half their personal loans since the financial crisis, with debts at their lowest since 1999

Counting the pennies: Cautious consumers chose to pay off more than they borrowed in 2012

Cautious households are making considerable headway clearing their debts, with the amount owed on personal loans dropping to its lowest level in 14 years, according to a report.

The total balance owed by consumers on all personal loans fell to £34.5billion in December, the lowest figure seen since August 1999 and almost half its pre-financial crisis peak.

The figure has been falling for some time as people try to clear existing debts and steer clear of new loans, the report by the British Bankers’ Association (BBA) said. 
Overall, the outstanding level of non-mortgage consumer borrowing shrank back by 1.6 per cent over the year to December, which was driven by a sharp 7 per cent contraction in personal loan and overdraft lending.
There was a net repayment of £48million in personal loans and overdrafts in December, it added.

However net spending on credit cards increased by £278million in the month, suggesting that people relied more heavily on plastic to get them through Christmas. 
As savings rates became even more abysmal, savers piled their money into cash Isas over the year in search of better rates of interest. Personal deposits increased to 6.1 per cent on the year to December, the BBA said. 

Loans and overdrafts continued to fall over the year while credit card debt continued to rise (Source: BBA)

Households have also been taking advantage of low interest rates to make high mortgage repayments and cut down what they owe, reducing net mortgage lending to a ‘flat balance through much of 2012’, the report said.

BBA statistics director David Dooks said: ‘2012 was a year of holding on to deposits and repaying debt for companies and households.
‘New mortgage lending of £92billion was offset by £91billion of repayments, and slow economic growth also continued to suppress new borrowing demand from consumers and from companies.’

Personal deposits continued to increase over the year as people shored up their savings (Source: BBA)

Howard Archer, chief European and UK economist at IHS Global Insight, said that a significant number of people could have borrowed more on their credit cards in late 2012 to make their finances stretch further over Christmas.
But he added: ‘The impression remains that consumer appetite for taking on new borrowing is limited.’
The BBA's figures also showed that mortgage approvals to home buyers increased for the sixth month in a row in December. There were 33,636 approvals for house purchase in December worth £5.2billion, continuing a trend of increases seen every month since last July.

Lending to businesses continued to drop over all in December as firms continued to reduce their debts (Source: BBA)

Lenders have said they expect house sales to pick up this year amid signs that the market is improving following a Government scheme launched last August to boost lending, which has prompted lenders to slash their mortgage rates.
The BBA's figures also showed that net lending to non-financial companies decreased by £3.5billion in December.
The report said that firms were continuing to reduce their debts while waiting for more certain trading conditions and an increase in consumer confidence.

Report: Asst. Atty. General Who Shied Away From Wall Street Prosecutions To Step Down

Assistant Attorney General Lanny Breuer has been accused by some of being overly fearful of prosecuting big banks.

Less than 24 hours after his appearance on PBS’ Frontline, where he struggled to explain why his office had brought not one single indictment against a high-level Wall Street executive related to the 2008 financial crisis, Assistant Attorney General Lanny Breuer has reportedly decided to step down. The Washington Post reports that no specific time-frame for Breuer’s departure has been given, so it’s possible he’ll continue to not prosecute bank executives for some time.
In spite of the fact, under his direction, the U.S. Attorney General’s Criminal Division has prosecuted a huge number of financial frauds and other crimes, Breuer has been unable to shake the reputation — and did himself no favors on Frontline — that he is either unwilling or unprepared to go after high-ranking executives at large financial institutions.
“[We] don’t let these institutions go,” he tried to explain about the lack of criminal prosecutions. “We’ve brought civil cases. We’ve brought regulatory cases and the entire approach here is to have a multi-pronged, comprehensive approach to what gave to the financial crisis.”
Breuer and his office have been criticized for not having confidence in the mountain of evidence — turned up by regulators, lawmakers, the Financial Crisis Inquiry Commission, and dozens of private lawsuits against banks — that shows bank executives were complicit in fraud related to toxic mortgages and the mortgage-backed securities created from them.
The Asst. A.G. has also received scorn — and calls for his resignation — from critics for his office’s part in “Operation Fast and Furious,” and other “gun walking” operations wherein government agents knowingly allowed buyers for Mexican drug cartels to purchase weapons at U.S. dealers. It was intended that these weapons would then be tracked to locate higher-level criminals in the organization. However, a number of the guns ended up on the streets, including one that was believed to be used in the killing of a U.S. Border Patrol agent.

Blind Sheik Prosecutor Mary Jo White to be nominated to lead Securities and Exchange Commission

U.S. Attorney for the Southern District of New York from 1993-2002

Barack Obama picks Mary Jo White to lead Securities and Exchange ...

President Obama on Thursday will nominate former federal prosecutor Mary Jo White as chairwoman of the Securities and Exchange Commission and re-nominate Richard Cordray for a full term as director of the Consumer Financial Protection Bureau, according to a White House official.
Both nominations are central to Obama’s hopes of more tightly regulating Wall Street in his second term, as many of the new rules created by the Dodd-Frank overhaul of financial regulation take effect.
Read the whole story.

Senate Democrats will accept House GOP debt-ceiling plan

Senate Democratic leaders announced Wednesday that they plan to accept the House GOP plan to extend the Treasury’s borrowing authority, committing themselves to approving a budget outline this spring and putting off any potential default on the nation’s swelling debt until well into the summer.
About an hour before the House’s expected passage of the new plan, Senate Majority Leader Harry M. Reid (D-Nev.) and his leadership team formally said that they would accept the latest offering from House Speaker John A. Boehner (R-Ohio), in large part because Boehner had dropped his previous demands that every dollar in increased borrowing authority be met with a corresponding dollar in spending cuts.
“We will not hold the full faith and credit of the United States hostage,” Reid told reporters, vowing “regular order” to bring a budget to the Senate floor for the first time since 2009.


Boehner’s team, which has struggled to corral its caucus behind past compromises, believes it has finally unified the rank-and-file behind the proposal to lift the debt ceiling until May 19 in exchange for demands that the Senate and House approve budgets. This is meant to set up an attempt at what insiders call “regular order,” in which House Budget Chairman Paul Ryan (R-Wis.) will attempt to negotiate a deal with Senate counterparts to start the process toward tax and entitlement reform.
It’s a recognition that the past two years of negotiating — lurching from crisis to crisis, often with President Obama and Boehner getting close but then faltering on a deal, leading to last-minute intervention by Senate leaders — have been a political and policy disaster for the House GOP.
Assuming the House passes the new plan, the Senate could act within the next week. That would come almost a full month before the next debt-ceiling limit is slated to hit, an unusual accomplishment for a congressional leadership that has seemed to thrive on 11th hour deals after weeks of ugly finger-pointing negotiations.
“For four years, with our economy on the line, they did nothing. With their paychecks on the line for one week, they’re springing into action,” Rory Cooper, spokesman for House Majority Leader Eric Cantor (R-Va.), said in reaction to the Senate announcement.
The new timeline would suspend the current limit of $16.4 trillion in debt and allow Treasury to continue borrowing through May 18, and the next day Treasury could begin using extraordinary measures to manage the debt until July or August.