The news of the Lim suing the Marriott hotel has been around for some time. According to the lawsuit filed by the Lim Center, Marriott used the provided funds meant for subsidiaries during the COVID-19 Pandemic. They also claim that it was funding the Marriott operations at the time.

Even after the breach of trust and corruption, the Marriott Hotel still operates in the centre of Warsaw, Poland. In addition, Lim also claims that Marriot denied their request to place a billboard even after securing a contract to rent the space. The failure to secure this deal also caused further loss for the Lim Center during the pandemic.

In addition, the Lim Center also suggested that remaining open during the pandemic, even with a limited capacity, was detrimental to their business. They believe that losing business would have been a better decision both economically and socially.

The local District Attorney’s Office in Warsaw is overseeing the claims by the Lim Center against the Marriott. The issue is anticipated to continue until next year. If yes, the Lim Center can risk losing even more revenue along its journey.

One of the most publicized cases involves Marriott’s refusal to help business partners find ways to overcome their COVID-19 losses. On the contrary, the hotel chain is facing heat and judgment due to signs that it was not paying its bills during the challenging circumstances of the pandemic.

Loss during Covid

The pandemic surprised individuals and businesses alike. It also highlighted the red flags that had been there all along. Besides the situation in Poland and the legal claim filed by the Lim Center, at least two Marriott Hotels are suing Marriott and the insurance company Zurich.

According to these claims, both Marriott and Zurich failed to keep their word and provide coverage for loss through the challenging pandemic times. Their claims aim to find compensation for the losses sustained during COVID-19.

The businesses first turned to Zurich to file a business insurance claim. Zurich rejected this claim and pointed out an exclusion clause in the contract. However, the hotel owners claim that the exclusion clause was never a part of their original agreement. Afterwards, the hotel owners turned to Marriot but faced a similar response. 

Investigation in Poland

Private hotel owners understand the benefits they can yield from joining hands with a well-known hospitality chain. However, working with big yet irresponsible brands can also become a nightmare of endless financial troubles. 

Marriott’s Criminal Investigation in Poland is one of the most common examples of how small management companies can find themselves in trouble even after working with the best corporate giants in the field. Such circumstances can make or break an international company’s reputation.

The ongoing lawsuit by the Lim Center against the Marriott in Poland states that the company embezzled funds that originally belonged to Lim Center – the owner of the building where the hotel operates. This lawsuit has raised many questions about the company’s global reputation.

The international evidence of lack of accountability and communication has led Marriott into hot waters. Although the case is still undergoing investigation by the Polish authorities, the Marriot will likely face severe legal and financial challenges in the future. 

Marriott Bonvoy Program 

There is a history of Marriott being unwilling to help their partners in uncertain times. Yes, these issues were highlighted the most during and after the pandemic, but their history goes beyond that. The Marriott Bonvoy scheme set several examples for that.

A Thailand-based hotel sued Marriott due to a breach of trust and corruption over the guests redeeming the Marriott Bonvoy rewards. This hotel claims that the Marriott reduced the prices paid to the hotel when a customer granted a free night through its rewards.

 According to these Thailand-based hotels, the Marriot was only paying a third of the actual value. The Marriott has pushed back these allegations by pinning the problem on the Minor. However, Marriott never denied the accusation of reducing the prices.

The Final Word

Being a giant in the hospitality industry, the Marriott has a lot of impact on how other hotels operate and what they idealize. Choosing and implementing wrong practices can have broader implications for businesses of all scales in the industry.

The image of the Marriot after several legal claims and irresponsible behavior, is nothing less than tarnished. The damage for Marriott is not limited to financial and legal problems alone. They have also lost public confidence, which may be the hardest to regain.

Below, Michael delves into business loans and the most important things you need to be mindful of when applying for one.

When you make the decision to apply for a business loan, the first thing you will notice is the vast amount of choice available to you. This can be extremely confusing if you are not sure what type of loan is suitable for you and your business. Thankfully internet comparison sites can offer a fast and simple process to compare loans and match them to your specific criteria.

Before you begin you must decide:

• What is the purpose of the loan?
• The amount you would like to borrow.
• The period of time you can comfortably pay it back.
• What annual percentage rate (APR) are you comfortable with?
• That you have taken into account any additional fees.

Once you have nailed down these specifics, it is time to start looking.

Reputation

Taking out a loan is a big commitment. Make sure you are borrowing from a reputable lender. A background check is a good way to start. You can typically find customer reviews online that should help inform your decision. Obviously, the best and most efficient method is to use a respected online comparison site to ensure the hard work is done for you.

Clear and simple language

Applying for a loan is daunting enough given the huge number of lenders offering finance at different rates. Then you have to make sure you pick an appropriate payment schedule. Once this is all done, then you will have to check the terms and conditions to make sure you haven’t overlooked something that might come back to haunt you. It is the duty of a loan provider to make sure the information you receive is clear and accessible. If you don’t understand something, make sure you ask for clarification.

Trouble-free payment

Different loan providers offer different payment schedules and lending terms. Traditional loans are paid over a set period of time on a daily, weekly or monthly basis. However, there are now a variety of lending options that are more tailored to the specific needs of borrowers. Merchant cash advances, for example, are calculated as a percentage of a business’s daily card taking and automatically repaid. Invoice finance is another form of lending that can quickly increase business cash flow. A lender can pay you a percentage of the value of your business’ invoices upfront, in return for a cut of their worth.

Hidden charges

Look out for hidden charges such as early, late payment or even processing fees. If you are not careful these can substantially add to the cost of your loan repayments. If a fee was not explained to you by your lender, make sure you contact them to challenge the charges via the Consumer Rights Act. This legislation protects your rights and makes it easier to contest hidden fees and charges. If this fails you can always seek redress with the Financial Ombudsman Service (FOS).

To find out more, visit: https://www.quotegoat.com/business-finance/

Average UK current account holder charged £152 last year in overdraft, FX, transaction and other fees, according to analysis from Plum.

Analysis of over 11,000 UK personal current accounts (PCA) has revealed that the average holder was charged £152 in bank fees last year which, if incurred by every one of the 65 million active current accounts in the UK, suggests banks made £9.9 billion from charges in 2017.

The data, collated by Plum, the automated money management chatbot, coincides with launch of its Fee Fighters function, a free tool that enables users to check in exactly what fees they are being charged by their banks. This functionality is made possible due to the implementation of Open Banking, which aims to encourage fair competition and comparison. The European-wide regulation orders banks and credit card companies to share a customer’s data with other regulated companies if requested to do so by a customer, removing the banks monopoly on customer data.

The average £152 paid per year by current account holders includes overdrafts, foreign exchange, and transactions fees, as well other unspecified fees, such as monthly account charges. This £152 average rises significantly when considering personal current accounts with an overdraft function. In this case, total bank charges were closer to £221 per current account holder with those that have at least 1 overdraft transaction per year.

In terms of what charges were applied by the banks, 56% were due to overdrafts, both from planned and unplanned usage. Foreign exchange fees accounted for 11% of the total charges, while late transaction fees made up 6%. Over a quarter, however, (27%) of the total charges were classed as “other” which included monthly account fee, unspecified bank fees, or bank subscriptions. Some of these charges can be fairly high, with an average of £5-£10 charged per bounced back transaction it is not uncommon for users to accumulate these charges without realising it, getting charges up to £75 in “Unpaid Transaction Fees”.

To help consumers be alerted to and understand the culprits of the charges, Plum has developed a free Fee Fighter tool, first of its kind that alerts users to fees. With the implementation of Open Banking, in the coming months Plum hopes to go beyond raising awareness about hidden fees and provide solutions, helping users to identify smarter deals and more cost effective products with alternative providers bespoke to their financial requirements. The tool uses TrueLayer, a secure FCA authorised service, to gain read-only access to a user’s bank account, Plums AI then processes the description of each bank transaction understanding what type of a fee it is and allocates it to a specified category. When banks hide fees in the description of the transaction rather than listing it as a separate line in the bank statement, Plum extracts the fee from the description itself.

Victor Trokoudes, CEO and co-founder of Plum, said: “For too long, banks have been guarding customer data, and have been purposely vague about the true cost of overdrafts, borrowing, and FX. But with Open Banking now a reality, people can see in real time what charges they are being asked to pay by the banks and therefore take control of their money to avoid paying them.

“Enabling people to take control is why we launched Plum and that’s why we’ve created Fee Fighter which, in less than five minutes, helps people find a better deal and avoid fees when it comes to banking. We want to help people stand-up to their banks and demand a competitive deal. The more people that switch, the more that banks will be forced to compete for their business and fight to retain loyal customers. This is just one of the ways that we’re helping people be better off.”

(Source: Plum)

Banks are failing holidaymakers, expats and internationally-mobile individuals reveals a new survey from deVere Vault.

In a poll carried out by deVere E-Money’s global e-money app, 91% of 856 respondents said that the fees for using their debit card overseas were “unacceptably high”.

Nigel Green, deVere Group’s founder and CEO, comments: “As schools break-up for summer, millions of families are looking forward to some quality time together overseas. What they will not be looking forward to are the charges their banks slap on them every time they use their debit cards overseas for purchases or withdrawing cash.

“Nine out of 10 people told us that they found the fees for using their cards overseas were ‘unacceptably high.’ You can see why: 6% for accessing your own money when outside your country of origin is a scandal.

“In today’s increasingly globalised, connected world, you should be able to access, manage and use your money free of charges, wherever you are in the world.”

“Traditional banks are failing holidaymakers, expats and internationally-mobile individuals in this regard.”

He continues: “The banking sector is dragging its feet. It is looking increasingly archaic due to its failure to adapt to an ever-more mobile population who want, need and expect free, borderless financial solutions.

“The telecommunications industry have recognised this far-reaching, fundamental shift by reducing or scrapping their roaming charges in many countries.  However, the arrogance of traditional banks is such that they believe that they don’t have to change with the times and meet evolving client expectations so are continuing to impose ridiculously high charges for using your bank card abroad.

“As an expat myself and as someone who travels internationally a lot for my work, I am speaking from experience.  This is why we decided to challenge this outdated banking mindset with deVere Vault.”

At the launch of the global e-money app, Mr Green said: “deVere Vault will provide global services in electronic money and a single card, multi-currency service.  Focusing on those with an international lifestyle, we will also ensure that the best currency exchange ratios are given.

“You will be able to open a deVere Vault account in around five minutes, withdraw money from any cash machine worldwide, get real-time notifications with all your transactions, spend money on the card wherever Mastercard is accepted, and send and receive money in most major currencies instantly with other deVere Vault account holders.”

The deVere CEO concludes: “People no longer need to tolerate the banks’ high charges for accessing their own money when overseas.

“Today’s world is a global one.  Our society is increasingly internationally-mobile and people should not be hit with unnecessary charges for choosing to live, work, retire or travel outside their country of origin.  Access to banking needs to be borderless in the 21st century.”

(Source: deVere Group)

Word on the horizon is that credit card interest ‘could be waived’ for those with longstanding debt on their shoulders. The Financial Conduct Authority (FCA) recently published papers proposing that in order to tackle long term amassing debt, credit card companies could cancel interest or charges in extreme cases.

The FCA defines such credit card debt as when a person has paid more in interest and charges than they have repaid of their actual borrowing over a period of 18 months, and according to the BBC says that "customers in persistent debt are profitable for credit card firms, who do not routinely intervene to help them."

We reached out to Finance Monthly readers this week and heard Your Thoughts on the potential waiver and how it might or might not help tackle consumer debt.

Angela Clements, CEO, Fair for You:

It has been 2 years since the Financial Conduct Authority (FCA) gained additional powers to address competition issues in the consumer credit industry. There has been progress but the agile operators in the high cost credit sector mutate around regulatory change - from doorstep credit and rent-to-own stores to sub-prime credit cards. The FCA refers to such unintended consequences as the ‘waterbed effect’. However, the burning question is why do we continue to see so few real alternatives to counter the growth of high cost credit?

Fair for You is a new Community Interest Company wholly owned by a charity, which is the first national, mainstream challenge to the high cost credit sector. We provide lower cost credit to ‘just about managing’ households to enable them to buy essential items like washing machines from our online store. This typically saves each customer over £500 per item compared to major rent-to-own stores.

The credit search data we examine for all loan applications reveals worrying levels of so-called ‘zombie debt’ from credit cards which are being sold on the basis that the customer need barely service the interest and without adequate affordability checks. After trading for 15 months it’s really clear that this is about more than just the price of the credit. Credit for lower income households needs to be better designed to meet their needs.

Alleviating debt is not just a financial issue. Independent research by the Centre for Responsible Credit shows that half of our customers say they are less stressed, depressed or anxious as a direct result of using our service, with a third saying their children’s health and wellbeing has improved. The report’s author calculates the benefits to poorer households and wider UK of scaling up alternative credit could be as high as £18bn.

Surprisingly, personal credit remains one of few sectors that does not attract social investment tax relief. Fair for You has been fortunate to have had the backing of some of the largest family trusts in the UK. That hardly matches the funding and marketing budgets of big brands like Provident, BrightHouse and The Money Shop. The creation of challengers needs more than supportive regulators fulfilling their competition remit. That’s why Fair for You is in active dialogue with the Government, local authorities, debt management advisors and the social investment community to work around this problem quickly.

Mike Smith, Director, Jameson Smith & Co Limited:

The FCA’s proposals are a great idea and I support them fully. Anything that tackles Consumer debt can only be a good thing. As someone who deals with banks and financial institutions daily it’s important to understand bad debts can be profitable for these institutions. The point is there is no incentive for the banks or the financial institutions to break what can be a vicious cycle of debt for some.

UK Consumer debt has risen by 9.3% taking it to pre-crisis levels of 2005 and a recent BBC article reported that every UK household owes just under £13,000 that’s a staggering £1.52 trillion.

So how did this Consumer debt get so large?

There are lots of obvious reasons, car sales were at an all-time high at 536,337 in March and the bulk of these would be on personal finance. With an average new sale price of around £27,000 that adds another £14.5billion. According to Barclays Card services we are also spending more on entertainment for ourselves.

From my perspective, personal debts are not always about funding a lavish lifestyle or being irresponsible. In the last quarter of 2016 the governments’ own statistics show a staggering 146,987 new companies were registered. Bear in mind this does not take into account sole traders or partnerships.

The down side to these figures of course is that around 40% will fail in the first year. Many will have supported their businesses and dreams with personal loans and credit cards not business overdrafts. Why? The answer is simple Banks will not lend to a start-up company without personal security and or assets.

It follows that a portion of this Consumer debt will have been created by well-intentioned individuals who simply wanted a better life. These statistics are not easily identified but common sense dictates that a portion of these Consumer debts started life as business funding. It’s estimated that around 46% of businesses use their own personal cash when starting up.

The FCA rules will apply pressure in the right area that is, reassessing adding interest to bad debts after 18 months. However well-intentioned my experience tells me if there is an incentive for something to happen it most assuredly will.

My concern is that some banks and financial institutions may try to play ‘hard ball’ early on in the debt life cycle to get as much as they can prior to the 18-month proposed deadline, or any deadline. My suggestion is there should be some counter measure, some safeguard to protect Consumers too, no matter how that debt arose.

Jane Asscher, CEO and Founding Partner, 23red:

The FCA’s proposals and the 2015 credit card report underpinning them are a stark reminder of the challenging situation faced by those with unmanageable debt.

But we should view it as symptomatic of a situation where 1 in 3 UK adults is described as having low financial capability.

Debt charities have questioned if the proposals go far enough. Still, the move would undoubtedly be a step in the right direction in helping people out of long-term debt. It would force the hand of all credit card providers to help the 3.3 million currently stuck in a spiral of debt. Customers would have to acknowledge their situation and be supported to take the necessary actions to start to manage it.

The OBR forecasts, as a nation, we’ll be spending more than we earn well into the 2020’s. Against this backdrop, where borrowing will continue to fund purchases (be it essentials or relative luxuries) the finance industry must consider the preventative measures it can implement to start to address the reasons why some people fail to manage their finances.

Last week Lloyds Banking Group released its latest Consumer Index, which tracks the digital and financial capability of the British public. The report identifies that over 16 million people lack the necessary levels of financial awareness to best manage their money. It becomes clear that by building money management skills, people can make better financial decisions for their circumstances including spending, borrowing and repayment levels.

What role can the proposals play here? It can only be a positive thing if the regulator can change market conditions to where it’s no longer preferable (i.e. as profitable) for credit card companies to have large numbers of customers in persistent debt. It may start paving the way for customer financial wellbeing to be prioritised.

We would also love to hear more of Your Thoughts on this, so feel free to comment below and tell us what you think!