After launching an investigation into the practices of some of the country’s biggest payday lenders, the Office of Fair Trading has prompted 15 payday lenders to close their doors. 15 high-interest lenders shut down after being given 12 weeks to show that they were operating within the law and not using unethical lending tactics.
The probe, carried out by the Office of Fair Trading as part of a major crackdown on payday lending, targeted 15 payday lenders across the country. The payday lenders targeted by the investigation make up over 90 percent of the UK market, with many featuring prominently in the news due to complaints by debt watchdog groups.
Experts believe that the lenders closed their doors in order to avoid complying with the investigation, which required a full audit report from payday lenders. Firms that are believed to have behaved unethically may be targeted for further investigations by the OFT as the regulator intensifies its crackdown on high-interest lending.
Despite the crackdown on payday lending, many debt-related charities believe that predatory lending is becoming a bigger problem in the UK. StepChange, one of the UK’s largest debt charities, claims that it helped more people with loans in the first half of 2013 than it did during the entire last year.
The group’s head of policy, Peter Tutton, claims that payday lending appears to be growing into a bigger problem as more Britons struggle with living costs. The total number of people assisted by the group ‘looks set to double this year’ even as many payday lenders close their doors to avoid investigation.
Many of the people assisted by debt charities have over five payday loans that are simultaneously racking up interest, leaving them with little hope of escaping their debts. The OFT’s investigation has been praised by business secretary Vince Cable, who claims that ‘tough enforcement is having a real effect’ on payday lending.Read more
BP has warned its investors that profits are likely to decline for the coming months as claims related to the 2010 Deepwater Horizon continue to come in. After setting aside $20 billion to repay Gulf Coast businesses affected by the disaster, BP claims that it has only $300 million left in its oil spill compensation fund.
CEO Bob Dudley has been vocal that the compensation deal struck with US officials, despite looking like a good deal for the corporation, has been ‘badly misinterpreted’ and that the largest beneficiaries are not businesses on the Gulf Coast but law firms filing their own compensation suits against the oil company.
Company spokespeople recently announced that BP’s costs increased by $1.4 billion in the second quarter as claims related to the oil spill increased. Companies affected by the oil spill have until the end of April next year to make claims for compensation due to economic losses related to the environmental disaster.
The extra claims are to be taken out of BP’s future profits, with analysts estimating that BP will likely pay around $42.4 billion due to the oil spill. The company’s share price dropped 4.5 percent in trading on the Tuesday morning following statements that the compensation would likely exceed the $20 billion fund’s limits.
Bob Dudley claims that the oil giant has absolutely ‘no problems’ compensating any individuals or businesses that were adversely affected by the oil spill, but added that many of the claims made by businesses were not legitimate. The CEO claims that the compensation fund has been misinterpreted by class action plaintiffs’ attorneys.
Repaying Gulf Coast businesses appears to have had a serious effect on BP’s profits over the last year, with the company reporting a 24 percent decline in its operating profits during the second quarter of this year. After $3.6 billion in quarterly profits twelve months ago, BP earned just $2.712 billion in the second quarter this year.Read more
After a rocky start, Facebook appears to have found a revenue model that makes it one of the digital world’s top performers. Facebook (NASDAQ:FB) announced some excellent second-quarter earnings recently, with revenues of $1.81 billion – over 10 percent more than analysts had predicted – impressing the company’s investors.
Facebook was widely thought of as an investment flop after the company’s IPO saw both institutional investors and retail shareholders lose much of their investment as the stock dipped in early trading. The recent revenue announcements have pushed Facebook’s stock price back towards the $38 it was trading at following its IPO.
The key metric behind the company’s growth is its RPU – revenue per user – a figure that’s frequently used by online firms to calculate their total audience value. After an early struggle to monetise its large audience, Facebook now has an average RPU of over $1.60 – a 25 percent increase from its average user value twelve months ago.
Facebook’s per-user revenue growth has been attributed to an increase in mobile advertising sales. Mobile ads display to over 70 percent of Facebook’s active users and command CPMs (cost per thousand impressions) that are far higher than FB’s standard desktop advertising product.
The company has also benefited from an increase in large-scale advertising on its platform. Facebook had previously struggled to attract the attention of corporate advertising partners, with brands such as General Motors opting out of its display network. Many of these partners have since returned to its advertising platform.
All in all, it’s a great time to be an investor in Facebook, particularly after the rocky performance following the company’s IPO. With a stock price that’s ticking up past its IPO valuation, 2013 could be Facebook’s breakout year as one of the advertising world’s biggest networks.Read more