Thursday evening business bulletin

Jun 26 2008 By Andrew Mernin

Britain’s biggest mortgage lender Halifax was today accused of "sneaking in" new fees following the introduction of a £245 up-front charge.

The Mortgage Account Fee will have to be paid by all new mortgage customers, even those who opt to pay a higher interest rate to avoid paying arrangement fees.

The group said the new charge was being introduced to replace its previous Mortgage Exit Administration Fee, which it scrapped in July last year following pressure from City watchdog the Financial Services Authority on lenders over exit charges.

It also replaces a range of fees for additional services such as duplicate mortgage statements and changes to the payment type of a mortgage.

But the new fee is higher than the old £175 Mortgage Exit Administration Fee, and will leave consumers who did not use any of the additional services facing a higher charge.

The City watchdog has obtained a bankruptcy order against a man who left 800 UK investors up to £3.7m out of pocket after helping to sell them shares illegally.

Samuel Nathan Kahn controlled two UK companies, Chesteroak Limited and Bingen Investments Limited, which helped boiler rooms sell shares to UK investors, the Financial Services Authority said.

Boiler rooms are illegal schemes that promote and sell shares that are often overpriced, restricted for onward sale or are worthless, before vanishing, leaving investors out of pocket.

In October last year, Mr Kahn admitted liability for claims made by the FSA on behalf of around 800 investors, but disputed the amount of up to £3.7m.

He then placed himself into an individual voluntary arrangement to try to defeat the FSA’s claim.

This led to the FSA applying for him to be made bankrupt, so that a claim for the full amount he owed to investors could be made against his estate.

The FTSE 100 Index fell almost 3% today after investors were spooked by a sudden spike in oil prices and fears over inflation in the UK and US.

Comments from cartel Opec that oil could reach 170 dollars a barrel this summer combined with fresh concerns over inflation from the Bank of England and the US Federal Reserve in a miserable session for blue-chips.

The London market eventually closed 147.9 points down at 5518.2 - the lowest since March - wiping £35bn from blue-chip stocks.

A poor opening for US markets increased the pressure on London’s blue-chip stocks late in the session after corporate giants General Motors and Citigroup were hit with downgrades.

The pound at 5pm was US$1.9875 compared to US$1.9660 at the previous close while the euro at 5pm was £0.7918 compared to £0.7917 at the previous close.