Consumer finances

Anxious chinese investors petition beijing on halted online finance compan

´╗┐Dec 21 Hundreds of anxious Chinese investors who said they spent money for products from one of China's biggest online finance companies petitioned the government on Monday to speed up investigations into the firm whose operations have been halted. Ezubao, which grew into the country's biggest peer-to-peer (P2P) lending platform before it was shut earlier this month, is being probed for suspected illegal activities. Police have sealed offices as well as seized assets of Ezubao and related companies. The Ezubao case underscores the risks created by China's fast-growing $2.6 trillion wealth management product industry. Many products are sold through loosely regulated channels, including online financial investment platforms and privately run exchanges. Early on Monday, more than 300 investors gathered at the central government petitions office in Beijing, watched by dozens of police. Five investor representatives registered to bring the matter to the attention of the State Council, China's cabinet, Ezubao employees and investors said. The petitioners said were told by government officials that they need to wait at least three months for a result. Beijing-based Ezubao attracted more than 70 billion yuan ($11 billion) from about 800,000 people in 31 provinces since its creation in 2014, according to a paper circulated in an investors' social media group.

China's P2P sector, now worth 133.1 billion yuan ($21 billion) according to industry data provider Wangdaizhijia, has been dogged by reports of alleged fraud in recent years. Among China's almost 3,800 P2P firms, more than 1,200 are in trouble, according to the data provider. TV ADVERTISEMENTS

Former employees attributed Ezubao's rise in part to its high-profile advertisements on state broadcaster CCTV and on high-speed trains. They also said Ezubao grew rapidly because its products paid extraordinary high annual returns of 9 percent and higher - until operations halted. The former employees said Ezubao developed a network of 100,000 employees, dubbed wealth managers, by offering competitive compensation. Many wealth managers also invested to win performance-based bonuses, they added.

Among the people gathering on Monday were employees and investors who said they lost their life savings."I feel terrible," said an investor surnamed Liu, adding that she invested 800,000 yuan in Ezubao products. "I haven't dared to tell my husband yet."An employee surnamed Zhang said she and her families and friends invested about 1 million yuan in total."It's people closest to me who are hurt by this," said an employee surnamed Zhang, who invested about 1 million yuan on behalf of her family and friends."Now I have offended all of my family and friends," she said. "Where has my credibility gone?"

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British holidaymakers hold off travel money buys as pound languishes

´╗┐British travellers' appetite for dollars and euros has sunk in the three weeks since Britain voted to leave the European Union, as they seemingly wait as long as possible in the hope that the pound's exchange rate will rebound. Both Thomas Cook and Travelex said that travel money business had jumped in the run-up to last month's referendum on EU membership, as those with summer holidays booked in Europe or the United States worried the pound might be worth less afterwards. And since Britain voted to leave, with sterling now down 11 percent against the dollar and 9 percent against the euro, orders have dried up, and are well down on the equivalent period in previous years."After a rush from customers for foreign currency pre-Brexit, we've seen a slowdown," said Fraser Millar, head of financial services at Thomas Cook.

"We think customers are doing their own personal hedging, buying a bit now but holding off to buy the rest until just before they travel, to see whether the rate improves."Some providers said business had not been helped by reports of rates at airports - normally among the most expensive places to buy foreign currency - that put the pound close to parity with the euro, a huge mark-up on the rate of around 83 pence at which travel money firms can buy euros from banks."These sort of reports have probably frightened people off," says Sandy Perera, who runs a network of small foreign exchange booths ranked by comparison sites as among the cheapest places to buy currencies in London.

"This time last year was our peak period and we are down at least 10-12 percent on that. We'll probably get a rush of people next week, which is a big headache for us (because) managing the availability of some currencies is the hard bit."The development of electronic payment infrastructure across Europe has steadily brought down the cost of using major cards abroad to as little as 2-3 percent with major banks and credit card companies.

But when fees for drawing money out of foreign cash machines are added, using a broker to buy cash before travelling can still prove far cheaper. At the start of this year, when many people will have paid for package holidays, the pound was worth around $1.50. On Friday, it was worth just $1.32."The pound's volatility since the Brexit announcement has impacted people's desire to buy the euro and the U.S. dollar," a spokesman for Travelex said."Our rates have had to take the pound's volatility into consideration in order to be able to continue to provide our services to those who needed them."