Independent Banking Advisory Service
Established in 1992
Banking News & UK Comment 2017
(use the 'headline link' to read full articles at their source)
Police conduct inquiries into Royal Bank of Scotland unit - Scotland's national police force was asked last year by crown prosecutors to examine GRG's handling of clients, the BBC understands. Police Scotland's economic crimes unit has been gathering evidence to see whether there might be enough to pursue a criminal investigation against the bank.
Meanwhile, a document, seen by the BBC and widely circulated in one division of GRG, speaks about staff extracting revenues from struggling small business customers, instead of trying to cut the clients' debt and return them to health.
The memo entitled "Just Hit Budget" talks of applying especially high interest rates, which could then be reduced if customers signed over a stake in their business or property.
One line says: "No deal, no way. Missed opportunities will mean missed bonuses." - 20th October 2017 BBC News
The Financial Conduct Authority (FCA) has agreed to the Treasury Committee's proposal for a legal adviser to study its report into misconduct at RBS
The report, leaked to the BBC, said the RBS department set up to help companies in trouble mistreated some clients. The FCA has refused to publish the skilled persons' report so far and has only released a short summary. But FCA chief has agreed to allow to compare its summary with the full report. Last week, Treasury Committee chair Nicky Morgan said her committee might force publication if the FCA did not agree to it being scrutinised.
"If the advisers' report does not provide the Committee with the assurances it needs, it will decide whether any further steps are required," said Mrs Morgan. "There is no good reason for the Committee's review to delay the FCA from publishing its summary as soon as possible." The leaked report found that some "inappropriate action" - such as interest charges being raised or unnecessary fees added - was experienced by 92% of viable firms seen by RBS's Global Restructuring Group. - 17th October 2017 BBC News
RBS restructuring unit probed over claims it proﬁted from stricken ﬁrms - Police in Scotland are looking into allegations a controversial division of Royal Bank of Scotland (RBS), set up to restore struggling companies to health, broke the law in its dealings with them.
More than 90% of the firms put into RBS' Global Restructuring Group (GRG), established after the financial crisis, are understood to have suffered "inappropriate action" against them by the bank, according to a Financial Conduct Authority (FCA) report leaked in August.
Police Scotland says it is a scoping exercise that has been under way for several months, rather than an investigation, but they are assessing the allegations for criminality.
In a statement, the force said: "Police Scotland can confirm that they have received reports regarding The Royal Bank of Scotland and that enquiries are ongoing to assess if there is any criminality present in the allegations made within these reports."
Many of GRG's top managers have left and it has been folded into other parts of the bank and last year, the bank put aside almost £400m to compensate some of those small businesses.
Labour's shadow business and international trade minister, said: "It is crucial that the truth is discovered as part of a full and transparent process and that trust between businesses and some of the banks is restored. "Financial institutions have a duty to help smaller businesses succeed, not push them to the brink to boost internal profits," he added.- 20th October 2017 - Sky News
Watchdog refuses to publish RBS letter - The financial watchdog has refused to publish in full a leaked report into a scandal at RBS's Global Restructuring Group. The Financial Conduct Authority (FCA) said publishing it would risk revealing confidential information. The report, shared with the BBC last month, accuses RBS of mistreating businesses - claims the bank denies. It follows demands for its release by the Treasury Select Committee chair Nicky Morgan MP. The FCA has promised instead to publish a summary of the report's findings, verified by external lawyers. But Ms Morgan said the case to publish the full report was "overwhelming".
The BBC’s outline of the leaked report quoted that the Report: 'found some "inappropriate action" - such as interest charges being raised or unnecessary fees added - was experienced by 92% of viable firms seen by RBS's Global Restructuring Group.
Also that: ‘GRG operated from 2005 to 2013 and at its peak handled 16,000 companies.’ & that: ‘As of the end of 2014, 69% of firms, were still in the successor to GRG, which was supposed to return them to health.’
More that: ‘Many of those businesses remained tied into complex loans with the bank in the form of derivatives linked to interest rates, from which it is often too expensive to leave.’ & ‘Others ended up in administration, liquidation or a trade sale. According to one BBC source, instead of getting firms back on their feet, GRG was more like their "undertaker". - BBC News 15th September 2017
Eddy Weatherill said that: "IBAS endorse the Report and comments because the massive destruction of small business owners by the bank’s GRG unit was undoubtedly a deliberate targeted profiteering exercise which now requires a full and open explanation. The secrecy from the FCA as Regulator appears (by their unwillingness to publish the Report) to endorse bank conduct that is completely unacceptable which now raises the question - can SME’s trust the FCA to properly regulate banks from now onwards? If the full Report continues to remain a secret between the FCA and RBS - then the answer appears to be NO." - 16th September 2017
Tribunal blocks £14bn Mastercard class action lawsuit - A case lodged on behalf of 46 million customers over alleged anti-competitive card fees cannot proceed, a tribunal rules. Walter Merricks argued that the fees broke EU law in that they effectively resulted in consumers paying higher prices to businesses that accepted Mastercard between 1992 and 2008. But the Competition Appeal Tribunal decided there was no way the case could go to trial as such a collective action could not guarantee any compensation would reach an individual, even if an illegal loss could be established. - Sky News 21st July 2017
Lloyds under fire over HBOS fraud compensation - On Friday, the bank published an update on its compensation, saying it was "close to" making 30 offers. But so far only 16 compensation offers have been made - and many more were caught up in the fraud. MPs say they're concerned the bank's compensation scheme lacks transparency and independence. The bank will not show victims who is deciding their compensation offer, or reveal how it is worked out. Chair of the all party parliamentary group on fair business banking, said: "There appears to be a lack of transparency, and therefore a lack of public confidence, in the processes set up unilaterally by Lloyds for assessment and settlement of claims. "Inevitably this creates suspicion and we are hoping that Lloyds will now accept our repeated invitations to make the processes - including the nuts and bolts of valuing claims - far more open to assessment by victims and their advisers. Without that it is hard to see how this matter can end other than in bitterness and litigation."
Shadow business minister said: "The victims of the HBOS Reading Fraud deserve to be treated in a fair and transparent manner. It is clear from the concerns that have been raised with me that this is not happening, and the Bank must be held to account. "Any process of compensation must be transparent and beyond reproach, yet the details of the scheme as described to me provide no comfort that this is the case. "Businesses in the UK deserve to have confidence that we are doing everything we can to support them when things go wrong, and it appears to me that there is a massive systemic failure when Banks are allowed to be their own judge, jury and executioner behind closed doors. This must change." - BBC News 21July 2017
Banks accused of failing to protect customers from transfer scams One victim was offered 10p in compensation by their bank after criminals cleared their account of £17,500, Which? said. Which? said it was writing to lenders for an explanation, six months after the payments regulator stopped short of its demand that banks be made liable for authorised push payment losses that often involved "life-changing" amounts of money. The consumer group had launched a so-called super-complaint last year that pointed out that, unlike other payment methods, victims conned into sending money by transfer to a fraudster have no legal right to get their money back from their bank. - Sky News 16th May 2017
What more can be done to minimise the harm caused by bank transfer scams?
Eddy Weatherill says: Today 08:45 So far, banks have sat on their hands whenever possible following BBA agenda’s because they have been able to do so – regulators have allowed banks to change at their pace whilst allowing scammers to deprive many older people of their savings and their ability to remain independent. Banks have always been quick to make changes which suited them – but not very quick when it’s for the customer’s beneﬁt. PPI and the sale of an unsuitable but very proﬁtable bank product is just one illustration – which took too many years for compensation payouts although regulators could have prevented PPI sales much earlier. It makes a mockery of the FCA Principles - particularly the most important Principle – that of treating customers fairly. – Eddy Weatherill Chief Executive IBAS - 16th May 2017
Lloyds to pay £100m fraud compensation - LLoyds has announced that it is setting aside a further £100m, to compensate customers who lost money in a fraud scandal. Six people, two of whom had worked for Halifax Bank of Scotland (HBOS) - owned by Lloyds - were jailed in February. The court heard they stole hundreds of millions of pounds from small businesses who were their clients. At the same time, the Financial Conduct Authority (FCA) announced that it is re-opening an enquiry into the fraud. Lloyds has already set aside at least £250m to cover other costs arising from the case, which was centred on the HBOS ofﬁce in Reading. "As I have stated before, we would like to express our deep regret and apologies to any customers directly affected by the criminal behaviour of these individuals," said the chief executive of Lloyds Banking Group. "We are absolutely determined that victims of the crimes committed at HBOS Reading are fairly, swiftly and appropriately compensated. We take responsibility for putting right the wrongs that were committed at HBOS Reading at the time." Some of the small businesses that lost money from the fraud collapsed as a result. The bank said it would provide such victims with immediate payments on a case-by-case basis. Those in ﬁnancial difﬁculty will be helped with day-to-day living costs. They will also be helped with legal fees, and have their existing debts written off. Lloyds will appoint an independent lawyer to determine whether the bank investigated the crime properly at the time. The FCA said it would resume an investigation into the fraud, which it suspended in 2013, pending an enquiry by Thames Valley Police. It will examine who knew what within HBOS, and whether they told the regulator. The resumption of the FCA investigation was welcomed by Andrew Tyrie, the chair of the Treasury Committee. "The public deserves to know the full truth about this and other HBOS failures," he said. "That this is taking so long is regrettable, but understandable." The crimes took place before Lloyds bailed out HBOS in October 2008. - BBC Business News 7th April 2017
HBOS fraud ‘covered up for nine years’ - One of Britain’s largest frauds, which destroyed hundreds of small businesses that banked with Halifax Bank of Scotland (HBOS), was covered up for nine years, according to an internal report seen by The Sunday Times. The estimated £1bn scam was “concealed” by several HBOS executives, according to a report by a senior employee at Lloyds, which merged with HBOS months later.
Lloyds has claimed that it “could not determine” whether anything criminal occurred in HBOS’s Reading ofﬁce until the trial that resulted in the jailing of two of its former bankers and four consultants, for charging small ﬁrms illicit fees in order to fund lavish holidays and sex parties with escorts. Internal emails referred to in the report show senior executives discussed the “fraud”. - The Times 2nd April 2017
The Financial Conduct Authority (FCA) has also announced it is investigating events surrounding the discovery of misconduct at HBOS. An FCA statement said: "This resumes an FCA investigation that was placed on hold in early 2013 at the request of Thames Valley Police pending the outcome of the Thames Valley police investigation and any resulting prosecutions. "The FCA’s investigation is focusing on the extent and nature of the knowledge of these matters within HBOS and its communications with the Financial Services Authority after the initial discovery of the misconduct."
IBAS Comments: “This is the only bank fraud case against bank customers businesses which has so so far been properly investigated by the Police and also where the perpetrators of the fraud have now been jailed - that is despite the many cases that have been taken to the Police for investigation in the last two decades.
'The estimated £1bn scam was “concealed” by several HBOS executives, according to a report by a senior employee at Lloyds, which merged with HBOS months later' and as the Times reported (above) this fraud 'was covered up for nine years'. “It would be interesting to know just how much money Lloyds and HBOS spent on resisting the fraud claims and in ‘legally’ bullying and repeatedly chasing the owners of the businesses involved for payment of the sums outstanding, which were due because of the frauds committed on them by HBOS managers and their associates. Lloyds statement which appears to be damage limitation (and just words in a PR exercise) need to be analyzed later against just how many customers are actually compensated, by how much and also how much longer they are made to wait for compensation.
It appears the bank has acted to delay, refute and resist - which is the 'normal' bank strategy. Hopefully, the FCA may now 'investigate' a lot further and a lot deeper into why these frauds were not fully investigated by Lloyds and why instead they waited to see if the police might investigate. Cynics will question Lloyds motivation for that strategy and also question why such massive frauds against business banking customers were not reported immediately to the FCA and why instead Lloyds then also 'bullied' the victims of the fraud/s for payment. Again the FCA Principles of Business did not work and the customers have neither been treated fairly or honestly in these matters.- Eddy Weatherill ceo IBAS
RBS accused of fraud and forgery by customers and ex-employee - Former business clients of the Royal Bank of Scotland are accusing the bank of systematically manipulating documents to cover up wrong doing. In an exclusive interview with the BBC, a former RBS employee has come forward to support allegations of document manipulation within the bank. RBS says it categorically denies document manipulation and forgery. - BBC Business 15th February 2017
Eddy Weatherill stated that: “Unfortunately, all UK banks have been guilty of systematic ʻcover upsʼ for the last three decades and over a very large number of issues - of which the regulators must be aware. The ʻcover upsʼ include ʻmanipulation of documentsʼ as ʻwhistle blowersʼ have claimed, which can mean copying signatures, altering contract details, deleting or altering internal notes, altering content from telephone conversations and destroying original documents. That short list is not exhaustive, there are many others. That is the nature of the banking ʻbeastʼ and that conduct has been ʻallowedʼ to take place for too many years because the FOS, regulators and also the courts have continued to accept bankʼs concealing documents and refusing disclosure of important information as a normality. Concealement remains an ʻissueʼ today in much of what banks do and regulators must be aware that they are just not doing enough to ʻclamp down on such unfair and dishonest corrupt methods and bank strategies, which then allow banks to ʻprotect themselvesʼ inside and outside of litigation - conduct which most ordinary people would consider as being well outside UK laws.”
A group of ﬁnanciers have been jailed for their part in a £245m scam after being convicted of bribery and corruption. - The six, including a senior banker, have been sentenced to a total of 47 years and 9 months in prison. Between 2003 and 2007, ﬁnance consultant used designer watches, exotic holidays and sex parties to bribe HBOS manager to approve inappropriate loans for struggling businesses. Many of the ﬁrms went bankrupt as a result of the loans and some of the owners lost their homes. The manager had been in charge of helping business customers who were facing ﬁnancial difﬁculties during his time at HBOS, but resigned from the bank in 2007. He was sentenced to 11 years and 3 months in prison for his offences. Judge told him he had sold his soul to the devil. - Sky News 2nd February 2017
Former HBOS manager found guilty of corruption and fraud - Six people, including two former HBOS bankers, have been found guilty of bribery and fraud that cost the bank's business customers and shareholders hundreds of millions of pounds. A former manager with HBOS, pleaded guilty to six counts including corruption. Five other defendants, including so-called turnaround consultants, were also convicted. In exchange for bribes, the HBOS manager told customers to use the turnaround ﬁrm. Prosecutor said: "Many individuals suffered great ﬁnancial loss and considerable personal trauma as a result of their callous disregard for the businesses they had established, owned or managed." A decade on, HBOS's owner Lloyds Banking Group still has not acknowledged the full scale of the fraud - or offered to compensate its victims. - 30th January 2017 - BBC Business News
Eddy Weatherill says: "The news stories above illustrate the very real and newer threats to bank customers in the coming years and also the laxity of any worthwhile banking controls in the period from 2007 onwards - see my comments made on 20th November 2015. The issue now for those HBOS businesses who were destroyed by the frauds perpetrated on them by HBOS managers, is - can they gain financial restitution for the now proven criminal activities at HBOS from the Directors at HBOS prior to the Lloyds takeover or from Lloyds?
Independent Banking Advisory Service (IBAS) - launched in 1992 as a specialist unincorporated business banking membership support 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 has a proven strategy which provides claims and defences for business bank customers. IBAS has excellent banking investigation reputation and 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: 19th May 2018