Independent Banking Advisory Service
Established in 1992
Banking News & UK Comment 2013
'Shocking' Nature Of Banks' Transgressions. Fines totalling £90m for Britain's two state-backed lenders, Lloyds Banking Group and Royal Bank of Scotland (RBS), were modest in the context of some of the penalties handed out to banks since the crisis of 2008. The nature of the transgressions, though, was arguably as shocking as anything seen in global banking during the last five years. – 12th December 2013 Sky Business News
Eddy Weatherill comments: The 'champagne bonus' and 'grand in the hand' initiatives for Bankers 'encouraged' to deliberately mislead customers to buy products which allowed the bank staff to feed off' their customer's naivety over several years continues to evidence the endemic dishonest banking culture in the UK. Even worse, that such a culture has continued despite the banking chiefs expressing 'appropriate levels of contrition' after being once again caught with 'their hands in the till'. Is it just our imagination, or are the banks ignoring the regulators when they feel like it and still encouraging staff to 'cream off' bank customers whilst publicly showing contrition?
Business Secretary Vince Cable has referred a report about how RBS dealt with small business to City regulators. RBS put some "good and viable" businesses into default so it could make more profit, it is claimed in a report by government adviser Lawrence Tomlinson released on Monday. Mr Tomlinson acted independently of government in producing the report, and did not set out to look solely at RBS. He also said conversations with affected businesses had made a big impact on him. "I feel really sick sometimes. It is really disturbing," he said."It is ruining people's businesses for sure, and in some cases having a huge impact on their personal lives too, even leading to family breakdown. - 24th November BBC Business
Eddy Weatherill comments: Well done Mr Tomlinson for exposing how banks have been destroying small businesses for years. But, now what will happen and who will make it happen? This report has endorsed all that IBAS has been saying for years.
£1trn timebombs RBS must defuse - Ross McEwan had a baptism of fire on Friday when he made his first set-piece announcement as chief executive of Royal Bank of Scotland. - Herald Scotland 03.11.13
Eddy Weatherill comments: "Ian Fraser has laid it all out so that everyone can understand the magnitude of the task ahead of Ross McEwan. It has to be remembered that this is just one bank and that other banks also face the same 'issues' including the other 'state owned' bank Lloyds. The damaging cost of banker's greed and it's twin culprit - the lack of (any) proper regulation, now seem massive. Ian Fraser's book should prove to be quite an interesting read."- Eddy Weatherill 04.11.13
JP Morgan has reached a $5.1bn (£3.2bn) settlement with the US Federal Housing Finance Agency (FHFA) over charges it misled mortgage giants Fannie Mae and Freddie Mac during the housing boom. A separate settlement with the US Justice Department is expected to be announced soon. "This is a significant step to address outstanding mortgage-related issues," the FHFA said in a statement. It is the biggest settlement ever by a US bank. Last month, the bank agreed to pay more than $1bn to help it end various investigations into its 2012 "London whale" trading debacle, which cost the bank more than $6bn and raised questions about its oversight procedures. JP Morgan has set aside a total of $23bn to help the bank work through its many investigations by regulators in the US and abroad.- 25th October 2013 BBC Business News
Eddy Weatherill comments: "Sounds a big number, but none of us will ever know the true costs of the banking deceptions which created the 2007 financial chaos in which this bank played a major part. What is heartening is the manner in which the US FHFA has pursued this bank and forced the bank into this settlement. That is a good lesson for our regulators. Do not not just accept what the bank offers to pay but make them pay what is necessary if the bank wishes to avoid further and more costly actions. Banks pursue their customers by using their legal 'clout' relentlessly, so they should understand how that works when they are on the receiving end of it and put under severe pressure. The FCA could learn a great deal from this settlement. One day, hopefully soon, we will see the UK Regulators 'perform' at a higher level and in a similar way, instead of just accepting the 'scraps off the bank's table."- Eddy Weatherill 27.10.13
Panorama exposes costly bank 'swap' scandal A redress scheme set up by the Financial Conduct Authority (FCA) to review nearly 30,000 cases involving various major banks has to date led to payouts for just 32 businesses. - BBC Business News 14th October 2013
Eddy Weatherill comments: " The regulators and the Financial Ombudsman Service are both to blame for the SWAPS disgrace. Both were very keen to prevent the 'exposure' of SWAPS complaints by UK Businesses and keen to 'sweep them under the carpet' to prevent those business customers obtaining proper redress, for what was a dishonest banking scam. Both the Financial Ombudsman Service and the FSA focused on preventing SWAPS complaints from being properly investigated. Their only focus at that time appeared to be in protecting banks from their customer's valid complaints. That is, until intense media attention forced the FSA to refocus on the SWAPS complaints which had been placed in front of them previously. Despite their best attempts to hide that SWAPS was yet another example of the bank's systemic abuse of UK bank customers, the Panorama film evidences that specific fact yet again for all to see. Having bled thousands of successful UK businesses almost dry by their excessive and dishonest banking scam, banks then bled them yet again, by using their specialist debt recovery teams to plunder businesses by charging further excessive fees and interest, until only a business carcass remained in many instances for the bank to legally discard. Following that event the banks then concentrated their efforts in debt recovery on Directors and partner's Personal Guarantees and mortgage guarantees on property, for further payments to the bank. Bank dishonesty and continued financial abuse on their business customers continues because even now only 32 of 30,000 cases have been paid out by the banks. Their legal wrangling continues and the FCA has made a private deal with the banks. That is just not good enough. Is the FCA following in the FSA footsteps? Is the FCA (in their private agreement with the banks) letting them 'off the hook' for what has been theft of billions of pounds from UK Businesses? Will the banks be fined? Or, are UK businesses, their owners directors and partners to be made to pay the very major price for saving disreputable UK banks? " - Eddy Weatherill 06.09.13
First pay-outs for businesses sold rate-swaps - The first small businesses to be mis-sold complicated insurance products by their banks have begun to receive compensation. So far, 10 firms have agreed to accept payments, averaging £50,000 each. A couple who own a hotel in Bournemouth are thought to be among the first to be compensated. Terri and Stewart Flett will receive £350,000, after taking out one of the insurance products in 2007.
It is thought about 40,000 small businesses were sold the products in the years between 2001 and 2008. Those affected include vets, care home operators, hauliers and pub owners. Many who had taken out a loan with their bank were advised to "hedge" against the possibility of interest rates going up. In return for higher fees, they were told they would not have to pay extra if the Bank of England raised base rates. In fact, the Bank reduced rates, from 2008 onwards. As a result, many small firms were faced with paying much more for their loans, or having to find tens of thousands of pounds in exit fees.
The four banks concerned, HSBC, Lloyds, Barclays and Royal Bank of Scotland, made large profits from the products, known as interest rate hedging products (IRHPs). "We want to see redress paid quickly to those who have suffered loss as a result of mis-selling," said Martin Wheatley, the FCA's chief executive. Those facing hardship can apply to have their loan repayments suspended while the reviews are completed. "If any other business is facing financial distress and wants a suspension of payments, they should get in touch with their bank immediately," said Anthony Browne, the chief executive of the British Bankers' Association (BBA). - BBC News 4th September 2013
Eddy Weatherill comments: " HSBC, Lloyds, Barclays and Royal Bank of Scotland are all mentioned but Clydesdale (and others) are not - yet we know they were engaged in rate swap agreements - where are the rest? Also, the rather glib BBA quote is astounding. What was the BBA's PR when complaints first started to arrive at the Financial Ombudsman Service and were turned down? Were the banks 'all squeaky clean' then - as with PPI - that is until proper investigation actually started - which we know was many years after the problem was first brought to the regulators and the Financial Ombudsman Service's attention (as is also the case with SWAPS)?" - Eddy Weatherill 06.09.13
Vince Cable warned over bank turnaround units taking 'cut throat' approach to companies - Banks’ turnaround divisions are “exploiting” ailing firms rather than helping them, a government adviser has warned Vince Cable. Lawrence Tomlinson, who was brought in to the Business Department to represent entrepreneurs’ interests, fears that banks’ restructuring divisions are taking a “cut-throat” approach to customers. Companies can be placed in a lender’s turnaround division for breaching a covenant, when they have cash flow problems or difficulties meeting debt repayments, for example. - 09 July 2013 Daily Telegraph - Eddy Weatherill comments: " The exploitation of UK businesses by banks and their Insolvency professionals has long been an IBAS concern as well as others.
An investigation by The Times into Lloyds Banking Group PPI claims has found that contractors employed at its largest PPI complaint handling unit were taught how to play the system to the detriment of clients. Lloyds admits failings over PPI complaints after Times sting - A Times journalist, who was recruited and trained as a PPI complaint handler at Royal Mint Court in London, claims he was told that he might find the job "morally difficult". He also reports that he was told to ignore possible fraud by Lloyds salesmen, who sometimes ticked PPI on application forms that had been left blank by the client. Instead, he was told to treat all applications as though they had been genuinely filled out, despite knowing that some had not. He was also advised that most complainants would give up if their claim was rejected the first time. The big four banks face a bill of up to £25bn in compensation, and Lloyds has earmarked a total of £6.7bn. - 11 June 2013 The Week Business
Lloyds Admits Errors After PPI Mis-Sell Sting Lloyds Banking Group has confirmed it is retraining staff handling insurance mis-selling claims from customers, after an undercover reporter revealed numerous allegations of misbehaviour. Among the allegations published is that Lloyds worked on the principle that Lloyds salesmen never mis-sold PPI. However, the reporter discovered that some of the original loan salesmen had forged documents and was told some paperwork was missing from customers' files. The Financial Ombudsman said that Lloyds rejected the highest number of valid mis-selling claims, at 84%. The paper added that complaint handlers were told to effectively turn a blind eye to the risk of fraud, and that most customers would give up pursuing PPI mis-selling claims when the bank's first rejection was given. - 11 June 2013 Sky Business News Eddy Weatherill comments on PPI claim issues: " the fallout from PPI sales does not want to go away and again we have claims that a major bank has not dealt with PPI claims either correctly or fairly. The major complaints about the selling of PPI were that the bank staff misled customers and often deliberately deceived customers into signing for insurance that was highly priced, poor value and in many cases designed not to pay out - whilst banks exploited their customers and were keen to sell high volumes of a product which would produce massive profits and provided bank staff with incentives and bonuses for maximum sales. We can see this bill for compensation growing by the minute as banks attempt to reduce their exposure to PPI claims by fair means or foul - you decide which - would you trust them to be fair?" - 11 June 2013 Eddy Weatherill comments on Business Bank Disputes, Directors' Personal Guarantee debt claims and the Jackson Reform: - "In 1997 our UK Banking Litigation Report was published. Our report evidenced the volume of banking cases which were legally aided at that time (84%) and there was no figure for LIPs (Litigant in Person). Since that date driven by the Government's desire to cut legal costs, legal aid has all but disappeared for the majority facing bank claims for debt repayment - regardless of any merit to their claim/s. Those now facing bank claims for payment on Director's Personal Guarantees will need to organize their cases more efficiently and quickly as Litigants In Person if they are to succeed with a worthwhile claim or properly defend the bank's claim. There are changes within the Jackson Reform which will be helpful (in our opinion) - but only if you know how to use 'the system' and IBAS will continue to assist those with cases of merit to 'fight their corner' and to understand 'the system' - as they say watch this space!" - 29th April 2013
Vince Cable calls for RBS prosecutions decision - Business Secretary Vince Cable has written to the Scottish legal authorities urging a rapid decision on whether to prosecute former directors of Royal Bank of Scotland. Mr Cable said the matter had been referred to them in January last year. He said he was very keen for a decision to be reached as quickly as possible to maintain public confidence. RBS, which has its headquarters in Edinburgh, needed a £45.5bn taxpayer-funded bailout in October 2008.In December 2011, a report by banking regulator the Financial Services Authority (FSA) said RBS, which owns Nat West and Ulster Bank, was brought to its knees by "multiple poor decisions" and a £50bn "gamble" on buying Dutch bank ABN Amro.The report shone a light on the poor relations between the FSA and RBS and said chief executive Fred Goodwin's "assertive and robust" management style was flagged as a potential risk as early as 2003, four years before the disastrous ABN Amro deal. In January 2012, a month after the FSA report, Mr Goodwin was stripped of the knighthood he was awarded for services to banking. Months later, the Crown Office in Scotland confirmed an investigation had been under way for some time because of "the degree of public concern about recently reported issues in the banking sector". In a letter to Westminster's top Scottish law officer - Advocate General for Scotland, Lord Wallace - Mr Cable asked for an update on the progress of the case but insisted he was "not seeking to influence the outcome" of the legal process. The business secretary told his fellow Liberal Democrat: "There is, as you will know, considerable public concern about the actions of the directors of RBS prior to its insolvency. "Following the release of the FSA's report into the failure of RBS I sought legal advice on what if any enforcement action was appropriate and was advised that the Crown Office and Procurator Fiscal Service (COPFS) should consider a possible prosecution. "Given that this matter was referred to them in January 2012, I am very keen for a decision to be reached as quickly as possible in order to maintain public confidence in the efficiency of the decision-making process." Mr Cable added that "public and media interest in the banking sector and RBS have not dissipated". Earlier this month more than 12,000 private shareholders and 100 institutional investors raised a class action against the bank. It relates to a £12bn rights issue by RBS in 2008 to shore up its balance sheet after its disastrous acquisition of ABN Amro. Mr Goodwin is among those named in the action, along with ex-chairman Sir Tom McKillop and senior figures Johnny Cameron and Guy Whittaker. Mr Cable has already instructed officials at his own department to look at the downfall of HBOS and whether there are grounds for banning former directors from holding boardroom positions. - 1 May 2013 BBC News Scotland Eddy Weatherill comment: "Vince Cable is correct in saying "public and media interest in the banking sector and RBS have not dissipated" because the whole country "feels outraged" by the situation particularly when every day there is a new and increased 'challenge' for all businesses even to just survive after the damage caused by bankers. That outrage will not end until all of us can see evidence of a full retribution".'Vince Cable 'examines ban for former HBOS directors' - The business secretary has launched moves which could lead to three former directors of HBOS being banned from serving as company directors. Vince Cable wants to see if there is enough evidence to start disqualification proceedings against Andy Hornby, Lord Stevenson and Sir James Crosby, a source told the BBC. A report on Friday blamed them for failures in the bank's 2008 collapse. Mr Cable "feels outraged" by the situation, the source said. He has told officials at the investigations and enforcement branch of the government's Insolvency Service to see if there is sufficient evidence to start disqualification proceedings against the three, the Business Department confirmed. HBOS collapsed in 2008, wiping out shareholders' assets and costing thousands of jobs. The bank was then forced to merge with Lloyds in early 2009 and received a £20.5bn taxpayer bailout. It was one of the most high-profile casualties of the UK's banking crisis, which precipitated a wider economic downturn. In its report on Friday, the Banking Standards Commission (The Banking Standards Commission was set up to improve the UK's banking system following the 2008 financial crisis) expressed frustration that City regulators had "taken no steps" to consider banning the three men from further involvement in financial services. None of the men has been formally punished for their roles leading up to HBOS's failure, despite what the commission described as a "colossal failure of management" and a strategy dating back to 2001 that "sowed the seeds of disaster". A Department for Business, Innovation and Skills spokesman said: "The business secretary has instructed officials at the Insolvency Service to look into the Financial Conduct Authority report when it is published to see whether there are matters that could lead to further action." - 7 April 2013 BBC News - Eddy Weatherill comments: "5 years have passed without any formal punishment for those involved in bringing down the UK 's financial systems and the resulting loss of jobs and opportunities whilst everyone in the UK is forced to pay for these 'failures of management'. Having a title and being a serial company director should not prevent the Insolvency Service acting - no wonder Vince Cable "feels outraged" by the situation - so do we all - but at least Vince Cable is in a position where he can do something about it - isn't he?"
Eddy Weatherill comments: " The Financial Conduct Authority is now 'in business' and has taken over from the FSA. The FSA was a failure and many have already said the FCA could not do any worse. The FSA was regulator of the banks in a period when too much went wrong in the UK and we will all continue to pay for bankers greed for many years to come. Regulation must now be effective - but it must also be seen to be effective and provide no more 'banking for the boys' clubs and immunity from the law. Fines are not enough. The FCA promises better feedback and better use of 'market' information when it is received by them - which hopefully will prevent any repetition of such blatant cons like PPI and SWAPS. These appeared to IBAS to be more like organized crime operations than professional banking. When IBAS made the Banking Ombudsman (now the Financial Ombudsman Service) aware of such matters (PPI) by submitting cases for their investigation - those cases were 'turned away' and not investigated by them. They were considered by them as being 'normal' banking practice and so they continued. Many more people were then 'ripped off'. Those 'normal' banking practices, which should not have been allowed to thrive have cost the banking industry compensation in the order of £10b plus. We also know that many of those defrauded will never be compensated because they will have died/lost their homes/lost their businesses and/or lost the right to make their claim during the time it has taken for the regulators to act. So, whilst we applauded the rather belated action of the FSA, we cannot endorse their inactivity or lack of regulation over many years as financial matters in the UK escalated to become completely out of control." - 10th April 2013Three lenders are to get access to £30m of government funds to boost the funding of small businesses. They will share a pot of money aimed at small and medium-sized businesses (SMEs), according to the Department for Business, Innovation and Skills. By attracting money from private investors as well, the pool of credit available will rise to more than £70m. Business Secretary Vince Cable has noted that 85% of all business loans are handled by the big four banks and said it was an "important boost for non-traditional lenders".The three lenders are Market Invoice, URICA and Beechbrook Capital. The money comes from the small business tranche of the Business Finance Partnership, through which the government has committed to provide £100m of funding to diversify the sources of finance available to SMEs. "A lack of access to finance is still choking off too many small businesses, preventing them from growing, taking on new staff or investing in new equipment," Mr Cable said. - 22 March 2013 BBC News Eddy Weatherill comments: " At last a small start at providing UK businesses with alternative lenders (other than the major banks). For far too long UK businesses have been controlled and exploited by the major UK banks - so it's good to see some sign of a new approach. We now wait to see what else may be done to boost funding of small business because it is surely the only way to provide better employment and also improve the long term viability of UK business from what is currently a very poor position - which has been created out of no proper bank regulation/bank profiteering & excesses and resulted in a financial disaster for which the whole community is now paying. Every time we see a cut of services/jobs/employment and the resulting lack of long term prospects - the major culprit for that problem is the Banks. This specific initiative is therefore to be welcomed and we wish it well." Latest UK Bank scandal affecting small business It is thought that as many as 40,000 of the interest rate swaps could have been mis-sold to small businesses since the end of 2001 after the FSA highlighted "serious failings" in the sale of the products last summer. The FSA announced that the UK 's four big banks - Barclays, HSBC, Lloyds and Royal Bank of Scotland - have agreed to start work on reviewing individual sales and providing compensation. The FSA has also been reviewing sales of swaps by Allied Irish Bank, Bank of Ireland, Clydesdale and Yorkshire banks, the Co-Operative Bank, and Santander UK - Sky Business News 31 January 2013
Banks to begin small business hedge mis-selling review. The Financial Services Authority (FSA) said Barclays, Lloyds, HSBC and RBS would seek to identify and provide redress to all customers affected. The FSA's announcement follows its own review of 173 such sales last year, of which more than 90% broke regulations. The products were typically sold to "protect" borrowers from rising rates. "Where redress is due, businesses will be put back into the position they should have been without the mis-sale," said Martin Wheatley, the designated chief executive of the Financial Conduct Authority, which is due to take over responsibilities from the FSA this year as part of a reorganisation of banking supervision in the UK.
"But it is important to remember that this review is firmly focused on the particular circumstances of each sale. These will determine whether there were failings in the sales process and, if so, whether redress is due." The FSA's review, concluded last summer, found a range of poor practices including: lack of clarity about the costs of stopping a product - failure to check whether a customer understood the risk - selling based on personal rewards rather than on the businesses needs. – BBC Business News - 31 January 2013
Independent Banking Advisory Service (IBAS) - launched in 1992 as a specialist business banking membership organization assisting bank customers with UK business banking account loan disputes and business banking debt disputes with their bank. Our analysis and investigation of business bank loans, bank accounts, banking contracts, business banking account facilities and banking debt recovery information has been instrumental in our member's success.
IBAS business banking dispute negotiating experience provides proven strategies for business bank customers banking claims and defences. IBAS has excellent banking investigation reputation and IBAS has featured on BBC TV, BBC TV News, ITV, Meridian and Sky News and contributed to editorials and articles for the Sunday Times, Times, Daily Mail, Daily Express and Daily Mirror - see Business: Your Money Not a moving account - BBC 22/07/99
Last modified: 27th March 2018