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Banks MPs and Government

(please use the 'headline link' to read full articles from their source)

 

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November 2021 - Danske Bank Overcharging

 

LCF scandal: MPs question if FCA would meet its own standards of accountability

A report by the Treasury select committee of MPs questioned whether the Financial Conduct Authority (FCA) - responsible for regulating financial firms - met the standards of accountability it imposes on the companies it oversees. It found the FCA put an "over-reliance" on its collective responsibility for the failure of LCF in 2019, rather than accountability of senior officials at the regulator run by Bank of England governor Andrew Bailey at the time.

24.06.21 Sky News

 

 

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The Financial Conduct Authority (FCA) has today announced that it has commenced criminal proceedings against National Westminster Bank Plc (NatWest) -

 

 

The FCA alleges that NatWest failed to adhere to the requirements of regulations 8(1), 8(3) and 14(1) of MLR 2007 between 11 November 2011 and 19 October 2016.

It is alleged that around £365 million was paid into the customer’s accounts, of which around £264 million was in cash.

It is alleged that NatWest's systems and controls failed to adequately monitor and scrutinise this activity.

NatWest is scheduled to appear at Westminster Magistrates’ Court on 14 April 2021.

This is the first criminal prosecution under the MLR 2007 by the FCA and the first prosecution under the MLR against a bank. - 16.03.21 FCA Press Release

 

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Why Britain’s SMEs need a proper small business bank

 

July 2020 Small Business.co.uk

 

Small Businesses in the UK are being let down and from almost 30 years experience of the banking system IBAS fully endorse Greg Taylor's comments in the article above.

The fundamental issue is that SME's are held hostage by their Bank current account provider who retains all their personal financial information and most if not all of their assets which are held as security.

The Bank of England recognizes that position in their document

 

The Open Data for SME Finance Report – Bank of England March 2020

 

The Bank of England further state: Bank lending makes up 85% of outstanding debt for SMEs

When SMEs do seek loans, the majority consider only one bank – usually their current account provider.

And the chances of being rejected are over 50% higher when applying to a new provider.

This helps to explain why the majority of the lending to date has been provided by larger banks.

But as was experienced in the 2008 financial crisis, this reliance on existing bank relationships and an inability to shop around creates a risk to the supply of credit during a downturn.

 

“Survey evidence suggests that a large number of SMEs are financially excluded in some form or other. In particular, 25% of SMEs are put off from shopping around for a loan because of the hassle or time taken.

This means 6 out of 10 would-be-borrowers choose to resort to personal funds instead.

Meanwhile, 70% of SMEs state that they would rather grow more slowly than borrow.

These statistics suggest that the SME lending market is failing to meet the needs of some businesses.

And the problem may be even more pronounced at the smallest end of the scale, where young and small firms also face a higher probability of being declined loans, most likely because of thin credit histories.

This problem appears to be getting worse, as an increasingly large number of SMEs are reliant on the value of intangible rather than tangible assets.



Many small businesses struggle to access the finance they need. Survey evidence suggests that only 36% of SMEs make use of external finance.

More than 50% of SMEs consider only one provider when seeking a loan and 25% of SMEs are put off from shopping around by the hassle or time taken.

This results in six in ten of those who would like to borrow resorting to personal funds instead.

And 70% of SMEs would rather grow more slowly than borrow.


Research has found that firms borrowing from weaker banks struggled to access credit and invest during the crisis.

This is consistent with the fact that in past downturns, the supply of bank credit to SMEs has tended to tighten faster than credit to larger companies.

During the financial crisis, SMEs also faced higher interest rates, shortened maturities and increased requests for collateral relative to larger businesses.


Since 2017, however, all of the net growth in SME lending has come from smaller banks or from alternative sources such as peer-to-peer (P2P) lending.


The Bank of England in March 2020 identified that in the SME Funding: 'The evidence suggests there is a market failure, because of two information asymmetries.'


IBAS Summary

The Bank of England Report shows that the UK SME financial model of the past three decades is broken and needs to be urgently fixed if UK SMEs are to survive beyond the effects of Covid-19.

Also, now the UK has left the EU it presents a very real opportunity for the Government to address the failures of the existing system by amending the remit of the British Business Bank - so that it can better assist SMEs to survive, grow and prosper.

Greg Taylor is worried that 'Many SMEs with long-term potential will therefore find themselves locked out of funding' - That also worries IBAS - it should also worry the Government.

- Eddy Weatherill ceo IBAS 17.02.21

 

 

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FCA fines Barclays £26 million over treatment of customers in financial difficulty -

 

Between April 2014 and December 2018 some retail and small business customers who had been offered consumer credit were treated poorly when they fell into arrears.

The FCA found that Barclays failed to treat customers fairly or to act with due skill, care and diligence.

Specifically, Barclays:

  • failed to follow its customers’ contact policies for customers who fell into arrears

  • failed to have appropriate conversations with customers to help understand the reasons for the arrears

  • failed to properly understand customers’ circumstances leading it to offer unaffordable, or unsustainable, forbearance solutions


The FCA requires consumer credit firms to take adequate measures to properly understand customers’ financial difficulties. It also requires firms to show forbearance and due consideration to customers in arrears or in financial difficulties. Otherwise, a customer under financial pressures could end up making payments on a consumer credit loan at the expense of a priority debt, such as a mortgage, council tax, child support and utility bills.

The fair and appropriate treatment of customers experiencing financial difficulty remains a focus for the FCA and the FCA is working to ensure that firms raise their standards in this area.

Firms should ensure there is appropriate investment in their staff who work in collections and recoveries, including in training and effective management information, to allow firms to monitor customer outcomes and take appropriate action where needed.

Notes to editors

  1. Final Notice (PDF)

  2. The FCA found that Barclays breached Principle 6 and Principle 3 of the FCA’s Principles for Business

  3. The FCA regulates some loans for small businesses. For example, if the business is a sole trader, a partnership with fewer than four partners, or an unincorporated association and the loan has a value of less than £25,000.

  • 15th December 2020 FCA Publication



IBAS Comment: FCA 2020 Fines can be found at - https://www.fca.org.uk/news/news-stories/2020-fines

 



FCA insists it protects consumers from investment harm despite criticism

 

 

Ineffective regulator?

Despite the FCA’s efforts the regulator continues to be accused of falling short of the mark when it comes to protecting consumers.

A damning recent independent report on the London Capital & Finance (LCF) scandal found the FCA did not effectively supervise and regulate the company before it collapsed.

LCF went into administration in January 2019, impacting over 11,000 people who invested around £237m in the company through mini-bonds. They are non-transferable assets that let retail investors invest in a company, but can be very risky. - 18.01.21 City A.M.


FCA failed to properly regulate London Capital & Finance, inquiry finds -

 

The UK’s financial watchdog did not effectively supervise and regulate mini-bond scandal company London Capital & Finance (LCF) before it collapsed last year, an independent investigation has found.

The inquiry singles out Andrew Bailey, who was the Financial Conduct Authority’s boss at the time, and who is now Governor of the Bank of England.

LCF went into administration in January 2019, impacting over 11,000 people who invested around £237m in the company through mini-bonds. They are non-transferable assets that let retail investors invest in a company, but can be very risky.

the investigation’s hard-hitting report concluded that the FCA did not effectively supervise and regulate LCF during the relevant period. It found there were “significant gaps and weaknesses” in the FCA’s policies and practices.

It said the mini-bondholders “were entitled to expect, and receive, more protection from the regulatory regime in relation to an FCA-authorised firm (such as LCF) than that which, in fact, was delivered by the FCA”.

The verdict is embarrassing for Bank of England governor Andrew Bailey, who led the FCA from 2016 to 2020.- 17.12.20 City A.M.

 

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Up to date example of banks not treating their customers fairly:

 

Crime agency under fire over bank signature forgery

 

- The National Crime Agency is facing criticism for failing to investigate reports alleging that banks forged signatures and fabricated evidence in court actions to repossess homes.

 

 

MPs urged the NCA a year ago to investigate following a BBC News investigation.

 

 

Government-owned bank 'forging signatures' in repossession cases

 

 

Asked for a statement about the evidence, the bank trade body, UK Finance said: "Forgery is a criminal offence and banks will continue to be vigilant against such types of fraud. "We urge anyone with evidence of forgery taking place to report it to their bank as well as the relevant authorities." - 07.09.2020 BBC Business News

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Eddy Weatherill comments: "Of course UK Finance would like customers to report such matters to their bank - but how much use has that been so far?

Although, if a customer had instigated a forgery against the bank, they would already be on a free holiday at Her Majesty's pleasure - wouldn't they?

Both the FOS and FCA will have been alerted to these complaints and the banks will just deny such things occur and then cover them up - they do it very well indeed.

They've always got away with it - why not now too? Rotten apples in the bank's barrel are continuing to rot others, as corruption follows corruption and customer's assets are just taken by what continues to be a very rotten 'system' - which to IBAS is an all too familiar pattern. - 07.09.20

 

Plus

 

11.06.20 Lloyds fined £64 million by the FCA - Full FCA Final Notice document

 

 

Lloyds fined £64m for failing struggling mortgage customers - BBC News

 

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August 2020 - 'Thanks for firstly remotely assessing my bank debt claim complaint/s and then saving me time and money by advising me exactly how to achieve a successful outcome, without solicitors being involved.

Your remote working and knowledge based systems are remarkable. IBAS has saved me many thousands of pounds by obtaining all the facts, then advising me 'safely' on an effective resolution (without wasteful or ineffective 'face to face' meetings in the current Covid 19 'climate').

Brilliant result all round and very safe and cost effective for me. Carry on your good work' - AS Testimonial

 

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IBAS has 30 years continuous business banking dispute investigations and negotiations experience with UK Lenders

 

We provide professional, confidential guidance and direct assistance to UK directors and proprietors.

 

 

IBAS are independent specialist investigators in UK business banking disputes, bank debt claims, Directors Bank Personal Guarantee and Business Mortgage Debt Claims.

The continuous, combined experience of UK banking investigations and UK banking case law since 1992 is offered to those fortunate enough to be offered IBAS Membership for their business banking dispute. IBAS experience and knowledge has saved many homes from being taken by banks after the bank demand on a Directors Personal Guarantee has threatened them.

 

IBAS limit cases to accommodate thorough in depth investigation of documentation.

 

 

IBAS acts for UK Business banking customers with business banking account concerns, disputes, issues, problems and business banking litigation disputes

 

IBAS does not act for Banks.

 

 

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IBAS had obtained in excess of £21 million in refunds, write-offs and write-down of bank debt by 2002 from investigations of UK Business Banking Disputes - then we stopped counting.

 

BBC Testimonial for IBAS -Your Money Not a moving account

 

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IBAS has featured on BBC TV, BBC TV News, ITV News, Meridian TV and Sky TV News since 1992 and contributed banking editorials and business banking articles for the Sunday Times, Times, Daily Mail, Daily Express, Telegraph and Daily Mirror.

 

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Independent Banking Advisory Service (IBAS) - IBAS launched in 1992 as a specialist unincorporated 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, business bank accounts, business banking contracts, business banking account facilities and business banking debt recovery information has been instrumental in our member's success.

 

Modified: 3rd November 2021