Edeus have so far tested the water with 400 of it’s customers and interest from eligible customers is said to be 20% at this stage. The lender is offering a discount of 8% for repayment of the loan or moving to another lender. They are also waiving early redemption charges and exit fees.

Edeus was formed in 2006 to take advantage of the big profits to be made in the sub prime market and in it’s first year shifted £1.4bn of mortgages. The business was hit by the credit crunch, but did manage to sell £500million of mortgage loans to Stroud & Swindon Building Society in October last year.

With potential buyers now demanding big discounts, Edeus considers that the offer to customers is a better option than selling the loans to a financial institution.

King told a meeting of the Commons Treasury select committee yesterday that banks should make “non-negligible contributions” into the Financial Services Compensation Scheme, adding that over ten years the fund would build up billions.

He added “I think it’s rather short-sighted that the banks shouldn’t put up money now, If you wait until there’s a problem, that’s a bad time to ask.”

King also suggested that the Bank Of England should have the power of deciding if a failing bank needed to be brought under the control of the authorities.

King said the central bank would have acted a lot sooner to save Northern Rock if the BoE had been given the power to use the proposed resolution scheme. “That bank would have been dealt with immediately,” he said. “We certainly would have handled it differently.”

The knock on effect swiftly saw supermarket competitor Morrisons follow suit, only their price cut is a saving of 4p per litre. Now Sainsbury’s have announced that their customers can save 5p per litre from Thursday, but only for customers spending £50 or more at their stores.

The Sainsbury’s promotion will be restricted to running for two weeks.

Asda and Morrisons say they are responding to the recent drop in oil prices, with the price settling at around $130 per barrel from the recent high of $147.

Asda trading director David Miles said: “We are seeing a more stable reduction in oil prices, allowing us to pass on the savings to customers.

“We urge other retailers to follow our lead at a time when customers need as much help as possible.”

Experts are concerned that the take up may be so bad that it will leave underwriters Morgan Stanley & Dresdner with as much as £3.6bn worth of the banks stock.

HBOS had hoped to rally support from it’s estimated 800,000 small private investors who were given around 200 shares each following the demutualisation of Halifax Building Society ten years ago.

While the offer made by HBOS may have looked attractive when it was announced in April, since then the share price has plunged in value. The hammering taken last week as UK banks in general were hit on the stock exchange, saw HBOS share drop to a low of 228p against the original discounted rights issue price of 275p.

The next few days could be crucial for the bank and it will be interesting to see how experts Morgan Stanley & Dresdner emerge from the farce.

Figures for credit and debit card fraud last year, rose to an incredible £535million, with criminals using new methods of committing credit card crime.

The skimming of cards being used abroad where ATM machines do not check Chip and Pin has become a popular way of obtaining card details.

Criminals are also using bugging devices which fit to till side payment systems to record details from the magnetic microchip, this method also allows the recording of the customers pin code.

Fraudulent use of cards at UK checkouts accounted for £73million of illegal spending, a rise of one million pounds from the previous year.

It is clear that the chip and pin system that was introduced to give users more security, is having absolutely no effect on credit card crime at all.

The ombudsman found evidence of “serial regulatory failure” by the government departments and watchdogs that were supposed to be protecting the insurer’s customers. She identified 10 instances of maladministration in the period leading up to December 2001, called on the government to apologise to policyholders for the “injustice” they had suffered and recommended that ministers set up a compensation scheme.

Chancellor Alistair Darling has insisted that the government cannot be held responsible for compensation, but he faces a tough fight from the ombudsman who’s report follows a European parliament finding that also claimed compensation should be paid.

Compensation for losses is likely to be around £4.5billion.

The tax was first postponed until October, but pressure from motorists and business leaders have resulted in the further postponement until April next year.

Chancellor Alistair Darling said: “The global credit crunch and sharp rises in world oil prices have pushed up prices at the pump. Today’s decision will help motorists and businesses get through what is a difficult time for everyone.”

So they are looking out for us after all.

The forgotten political party, the Liberal Democrats have however condemned the move as ‘irresponsible’, suggesting that the government have acted in a ‘panic environment’ and would like to know how the government can afford to pay it.

Of course the fact that the fuel tax increase has been such an important issue in Gordon Brown’s home country during the upcoming Glasgow East byelection will have nothing to do with the decision.

The Scottish National Party are proving a strong opposition to the the current Labour government, and its members have been instructing voters to send a clear message to Brown over the fuel duty increase.

Speculation that two US mortgage providers might have to raise fresh capital and make further write-downs prompted a ’sell off’ on Wall Street, making things very uncomfortable for a host of financial stocks on the UK market.

Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said: “Today’s fall marks a full entry into bear market territory, even though most investors will have been feeling that this has been here already for some months. At this precise moment, it is difficult to identify from where a positive catalyst might emerge,” he added.

Fears over rising inflation are a concern for homeowners who are looking to the Bank of England for some respite, but any thoughts of a cut in the interest rate this week are most unlikely, despite the boost a cut would give the economy.

With crude prices refusing to drop below $140 per barrel and food prices increasing almost weekly, the threat of inflation remains severe and most experts expect the bank rate to remain unchanged.

Put it through the shredder is the advice being given and should not even be a consideration. HBOS share price on 1st July was 6p lower than the 275p being asked for the new rights issue, so really there is no point in buying.

Giving the current economic climate it is unlikely that the HBOS share price will rise dramatically before 11th July the D day for the rights issue, if it were to improve then the advice could very well change.

But being realistic, Stockbroker Justin Urquhart Stewart, of Seven Investment Management, says: ‘Don’t even think about participating in this rights issue. If you really want to buy HBOS shares, then go to the market and buy them. Leave the merchant banks to pick up the pieces of this issue.’

The chancellor wants the current limit for compensation raised from £35,000 to £50,000. However Banks have already hit out at the idea of paying into a fund to cover the risk of collapse, claiming that they are already under enough pressure with the current credit crunch.

The government responded by saying that the scheme would have the power to borrow money from the public sector in the event of collapse, allowing it to repay savers quickly.

Since October 2007 the Financial Services Compensation Scheme (FSCS) has guaranteed all deposits up to £35,000. In November it was suggested that the amount should be raised to £100,000 to bring it in line with the USA protection levels, but as usual the governments response has been far less than impressive, settling on just half of the proposed figure.

The usual story of too little too late from the UK government.