In recent years we have been able to identify a large number of the potential problem areas and at the same time help many avoid them, leading them to a successful outcome. Our recent initiatives have shown that where the will exists on both sides to reach a compromise IBAS involvement in the negotiation will certainly bring matters to a more favourable and fairer conclusion for the customer". - "My quote which was made in 1997 is as true today as it was then in 1997 - 18.02.17 Eddy Weatherill chief executive IBAS
Eddy Weatherill says: Having now seen the first of the RBS letters on 'Putting things Right' which are now following the bank's announcement that they would be 'creating a new complaints process overseen by retired High Court Judge.' It does appear that the first steps are being taken for that process.
So far, so good. But, as I've said before, the devil is in the detail. We know from the SWAPS 'reviews' that it was the 'devil in the detail' which then allowed RBS to avoid the additional losses claimed by many businesses - although they were using legal advisors (their legal advisors still did quite well from the fees) - and the fact that it was GRG 'excesses' and fees which had created many of those losses. Maybe, this 'new complaints process' will allow redress - but we have not seen a bank pay out without good evidence and reasoning and have seen many cases which have failed despite high cost legal representation. A good case with good reasoning and evidence is now vitally important for what may be the last opportunity for many businesses to gain redress. The same applies where there is a a home or property at risk and the need to make a reasonable negotiating position instead of the bank taking all they claim through their Debt Recovery Department. The 'strength' of the customer's case is even more necessary if legal representation is unaffordable (and it is very costly) or the case is just not large enough to justify ILA or in obtaining the necessary counsel's opinion to gain litigation funding to start that process to pursue the bank for their claims. IBAS has helped many to gain results which otherwise would have been impossible - so don't be too proud to ask for IBAS help. - 12th December 2016
Eddy Weatherill says: It's correct when he says: " Today's announcement is an important first step but it appears there are more conclusions needed on these most damning elements on the bank's behaviour." I would go further and say that for Bank PR it's very good - but as usual the 'devil is in the detail' and many business customers have already been waiting for much longer than the 3 years since the Report was first published.
The bank has issued denial after denial - year on year - preventing the 12,000 business customers from running their own business whilst also taking many of those businesses away (by one means or another) and many small businesses have lost their personal assets due to this bank. No wonder many SME's have resorted to legal claims in joining lawyer led 'class actions'. But, at IBAS we also know that the greater number of those small businesses cannot join into such legal claims because their claims are not 6 figure plus claims.
We look forward to 'understanding' just how the RBS will 'refund complex fees paid by about 4,000 small business GRG customers between 2008 and 2013' and will be watching carefully to see whether those refunds are correct and also allow for the time involved. But, the greater issue is on the related SME losses which will need to be 'fought for' individually because the bank does not just 'give back' money to customers when they can avoid it. Our members have IBAS support and knowledge for those issues. - 8th November 2016
RBS to compensate squeezed ﬁrms - Royal Bank of Scotland (RBS) is to compensate up to 12,000 small business customers that it allegedly mistreated in the wake of the ﬁnancial crisis. The bank has announced a fund of £400m for affected ﬁrms. Its Global Restructuring Group (GRG) had been accused of buying assets cheaply from failing ﬁrms it claimed to be helping. However, regulators found RBS did not "artiﬁcially engineer" the transfer of customers to GRG. Last month, RBS said it had let some small business customers down in the past but denied it had deliberately caused them to fail.
The bank will automatically refund complex fees paid by about 4,000 small business GRG customers between 2008 and 2013, and will set up a new complaints process. The process will be overseen by retired High Court judge. Complaints will initially be dealt with by the bank, and any that are not resolved will then be considered by the third party. In the case of businesses that have gone bust but are due compensation, it will be up to administrators to decide whether to reconstitute the ﬁrm, said RBS regulatory affairs ofﬁcer. It may be the case that only creditors of a dissolved ﬁrm will beneﬁt from any compensation, rather than the business owner, he said.
On Tuesday, the FCA said in it's FCA Statement that it found there was no widespread practice of transferring customers to GRG for their value, or requesting cash injections when the bank had no intention of supporting the business. Small businesses that were transferred to GRG "were exhibiting clear signs of financial difficulty," the FCA said.
However, the bank did fail to support businesses "in a manner consistent with good turnaround practice", including "placing an undue focus on pricing increases and debt reduction without due consideration to the longer term viability of customers". RBS's announcement coincides with the appearance before the Treasury Select Committee of FCA chief executive. - BBC Business News 8th November 2016
8th November 2016 FCA News page
13th October 2016
1.1 In 2013, the Parliamentary Commission on Banking Standards (PCBS) recommended that banks put in place mechanisms to allow their employees to raise concerns internally (i.e. to ‘blow the whistle’). The Commission also recommended that banks assign the responsibility for overseeing the effectiveness of those arrangements to a senior person.
1.2 In October 2015, the FCA and the PRA introduced new rules requiring internal whistleblowing arrangements to be introduced by banks, building societies, credit unions and PRA-designated investment firms (collectively known as Relevant Authorised Persons, or “RAPs”), as well as insurers. (source FCA web site)
BBC Newsnight on 10th October 2016 - provided an exclusive RBS investigation and evidenced internal papers obtained from a ‘whistleblower’ regarding RBS Global Restructuring Group (GRG).
Mastercard facing £19bn damages claim over inflated card charges - The Company is alleged to have set unlawfully high fees for using cards in shops over a 16-year period The claim, led by former financial services ombudsman Walter Merricks – who has instructed US-based law firm Quinn Emanuel, is to be filed under the Consumer Rights Act 2015, which allows for collective damages claims. Merricks said in a statement: 'The prices of everything we all bought from 1992 to 2008 were higher than they should have been as a result of the unlawful conduct of MasterCard. There is no question that MasterCard acted illegally in the way it conducted its business, a business that affects all of us. All of us over-paid to the tune of up to £19bn during a period lasting 16 years. My aim is to get the redress to which UK consumers are entitled and to ensure that MasterCard cannot hold on to the illegal profits it made. This case should send a signal to companies that break competition laws at the expense of UK consumers that they do so at their financial peril.'
MasterCard faces £19bn collective action over card charges - Millions of Britons could collect more than £450 each in a landmark legal case against MasterCard over a £19billion rip-off. The case revolves around the charges imposed by MasterCard on retailers for processing credit and debit card payments over 16 years. These 'interchange fees' were passed on to all shoppers regardless of whether they were MasterCard customers or not in higher prices on everything from a pair of shoes to the weekly groceries. Now the UK's former Chief Financial Ombudsman, Walter Merricks, is leading a class action lawsuit to get consumers their money back. - Daily Mail 05.07.16
We have been asked many times how IBAS help business bank customers with their bank litigation? The short answer is yes we do and we have done so over many years. Our aim is to gather important information which we know is necessary to assess legal arguments as soon after a bank demand as possible and before litigation is contemplated. Our experience is that laying the groundwork' for a successful litigation starts by preserving defences which exist, so they can be used if or when required. Banks will ' bully' in a number of ways to destroy the customer's case and they do not 'play fair', they are capable of many underhand tactics - particularly if they see your case as a potential threat to the bank. They will destabilize any threat where possible and they start at the first point of contact. IBAS has assisted in many cases which have been won by our members after litigation in the County Court, High Court and the Court of Appeal - so IBAS experience is important for those business banking customer in dispute with a bank. - if you send us an overview of your dispute we will assess how best we can assist.
From our research over time it appeared inevitable that UK businesses would continue to suffer at the expense of UK banks simply because the banks illustrated a constant desire for profit at any cost to UK businesses. Those continued bank excesses are illustrated by the colossal cost of PPI compensation now being paid. Although, many will not have received compensation for loss. The figures illustrates the tremendous damage caused to UK businesses by banks. Many businesses were forced into failure and bankruptcy by the banks excessive charging and deliberate profiteering evidenced by the many UK banks scams and cons orchestrated for profit, including PPI and SWAPS. But, many other money making schemes were used to profiteer from vulnerable business such as Royal Bank of Scotland's Global Restructuring Group and 'specialised' lending which were advertised as being 'a support and business restructuring arm of the bank'.
One issue that was highlighted in his Report (Business Secretary has referred a report about how RBS dealt with small business to City regulators) was the difficulties faced by many SMEs in obtaining access to legal advice to allow them to take action against the banks. That 'issue' has been a common theme in IBAS work since 1992.
IBAS UK Banking Litigation Report was first published in 1997. At that time our report evidenced the volume of banking cases which were legally aided (84%) and we did not have a figure for LIPs (Litigant in Person). Since that date driven by successive Government's desire to cut legal costs, legal aid has all but disappeared for the majority facing business bank claims for debt repayment. Those now facing bank claims for payment on Director's Personal Guarantees or business banking disputes need to organize their cases more efficiently and quickly as 'Litigants In Person' to properly defend the bank's claim as LIP's or if they have a worthwhile claim. However, litigation funding can now be obtained provided the 'case' can be proven to be commercially viable. IBAS can assess cases for viability - 13th December 2015
IBAS has obtained in excess of £21 million in refunds, write-offs and write-down of bank debt (we stopped 'counting' some years ago) from investigations of UK Business Banking Disputes. We stopped counting when we realized that for an individual, it is only their business banking dispute and their business banking problem which matters most. That's not too surprising, because it's their personal assets which are at risk from the bank's 'plundering' if their business fails and then it's their Director's Personal Guarantee which is 'called' for payment by the bank. If they own a house with or without equity, that will also be at risk from a bank's 'debt recovery operation'.
UK Banking Litigation Report
Bank customers facing litigation - introduction
IBAS Report on Bank Customers in Litigation - This report was compiled from 1200 questionnaires we sent to individuals known to have been involved in litigation in October 1996 - from the completed responses the report was then completed in early 1997.
- IBAS Report on Bank Customers in Litigation
- Research of Bank Customers in active litigation with the five UK major high street banks was conducted by IBAS. Over the period of four years IBAS monitored progress on cases involved in litigation. Many UK Bank customers have expressed concerns that their initial problems with the bank were compounded further by the use of the legal system. Our research shows that:
- 43% - have been in litigation in excess of 4 years.
- 57% - have been in litigation in excess of 2 years.
- 79% - of actions have been instigated by the banks.
- 84% - of actions are legally aided.
- 62% - have changed solicitors three or more times.
- 81% - of cases relate to a business or late business.
- Analysis of research:
- 1200 questionnaires were mailed to past IBAS enquirers in litigation with a bank. The figures were compiled over a three month period from October 1996. We received 764 replies of which 692 were fully completed with all relevant information - these formed the basis of our report.
- Banks involved in UK litigation can be categorized as follows
- UK Banks commence legal actions instead of seeking solutions. In many of these cases the transfer of a bank complaint from the banking system to the legal system merely added further cost to the customers account for payment. Rarely has this worked in the customers favour, despite often well documented and extremely serious complaints being made. The failure of the banking internal complaints system, in some cases to enable a compromise to be made, has been deliberate and the transition from a banking matter to a legal matter has been to the customers disadvantage, but more importantly to the banks advantage, both in time and the ability to charge all recovery costs plus interest to the customers account in a large percentage of the cases. Particularly noticeable is the use of the legal system to prevent the Office of the Banking Ombudsman from continuing to investigate complaints where the bank is obviously at risk from a more detailed investigation taking place.
- Four Out Of Five Proceedings Instigated By The Bank
- As the majority of cases involved the bank instigating proceedings (79%) the customers perception of their problems at this stage were often clouded by simplistic reactions - i.e. "I'll have my day in court and my complaints will be properly aired" or "when they realise I am going to defend the action, they will pull out". In reality nothing could be further from the truth. The banks all have their own 'in house' or retained specialist banking lawyers, with instructions to protect the banks position at any cost. Their knowledge of these type of actions will be considerable and they will invariably project a 'hard line' attitude, regardless of the facts.
- Banks Spare No Cost On Legal Actions
- When the bank issues proceeding they fight with everything available and no cost will be spared in the hope of achieving a swift result. Confronted with this approach the customer has little time to consider how, or indeed if, they can defend the action and it is because of the brash and intimidating approach of the bank that the customer frequently offers no defence at all. The alternative being to act as litigant in person or be represented by a solicitor generally not aware of the banks overall strategies. This gives the bank the perfect opportunity to literally 'rush' an action through court, leaving the customer traumatised and financially even worse off than before. The costs of litigation is not a serious consideration for banks as invariably, in the majority of cases, costs will be met at a later date from the customer's property, or their assets.
- Deliberate Delaying Tactics By UK Banks
- The bank is only presented with a challenge, when the customer defends the proceedings and when faced with this situation, the bank adopts a totally different approach and the agenda changes drastically. The objective is then to delay. We have established that there is an intention to deliberately delay the progress of large numbers of cases by a variety of methods. In particular it is normal practise for the banks to repeatedly revert to the courts for extensions of time, which are invariably granted despite objections. Vital documents are frequently 'lost or destroyed', before the discovery stage and therefore not available to the customers lawyer, or indeed the court. It would appear that perjury is commonplace in affidavits from the banks - with statements being sworn on oath as true, when clearly they are misleading at best, but often not true.
- Blatant Abuse Of The UK Legal System
- Neither is it unusual for vital facts and figures to be presented to the court which are both inaccurate and poorly prepared by the bank, when submitting a claim for possession of the family home. The onus being on the customer alone to prove that the submissions by the bank are not accurate or correct.
- This appears to IBAS to be biased in the wrong direction. Surely, it is up to the bank to prove without doubt their position and that the debt they are claiming is owed. This also leads IBAS to question the true cost of UK justice and whether it is denied to those who have limited resources. At the same time the legal system accepts both inaccurate and late affidavits from the banks, without penalty, whilst expecting the opposite from the customer.
- Trying To Find The Right Lawyer Places The Customer In A Legal Minefield
- When issued with legal proceedings, many customer enter a legal 'minefield' without the ability to differentiate between legal advisors capabilities. This frequently results in solicitors being instructed without consideration or knowledge of their ability in this extremely specialised field. This can result in total dissatisfaction or loss of the case, due to the instructed solicitor not having the experience or commitment with which to properly brief counsel, or present the case effectively.
The reality is that banks can afford the best, whilst the customer has to 'pick from the rest' - almost a lottery - Not surprisingly 62% of our survey had changed solicitors at least three times during their proceedings.
- Majority Of Customers Unable To Afford Costly Litigation
- From the survey results, the majority (84%) of cases are legally aided and again the majority have been in litigation more than two years (57%) with the remaining (43%) still in litigation after more than four years.
- Lawyers & Bankers The Only Winners From Legal Aid
- The length of time can be directly related to how much time is wasted by the participants - in particular the banks, who have an unlimited purse and no sense of urgency, particularly when it is to the banks advantage both in time and the ability to charge all costs to the customers account.
Some solicitors also view the legal aid system as a good long term source of income and can because of this, extend the time necessary to bring a case to a successful conclusion. There is no doubt that both detract from the process of justice working effectively, or quickly.
Many perceive that justice is not working at all for those without money, particularly as there is now more attention being given to the way in which legal aid costs are being substantially reduced. At the same time there has been no penalty imposed on those who have deep pockets whilst hijacking the system for their own benefit and greed.
- Customers Compromised By System
- Of the 21% who have been able to commence an action against their bank, those who are legally aided face not only the delaying and time-wasting tactics. If their case looks sound and the bank senses a possible defeat, they will invariably offer a derisory out of court settlement, but only after a number of years have elapsed. Unfortunately, if the customers legal advisors consider the offer reasonable, balanced against future costs to proceed with the action, legal aid may be discharged.
- Derisory Settlements To Customers
- Such settlement offers rarely reflect a realistic, or fair figure and are offered in the knowledge that the easy option may be preferred by the customer's advisors and the legal aid board - the only loser can be the customer. This provides yet further advantage to the banks, who are already using their deep pockets to manipulate the situation to their own advantage. In this situation the customer is left in a hopeless position - with the case stopped from reaching court. The bank can be the only winners in this situation and again justice is not served.
- Quote from Chief Executive Eddy Weatherill
- "At IBAS we have proved that there is an alternative to lengthy UK Litigation and many cases have been lifted from the legal treadmill and resolved by direct and active negotiation through IBAS. However, our research has highlighted that there are many thousands of people still in the grip of litigation, ignorant of any alternative, with no prospect of knowing whether their lawyers represent their best interests or not.
- In recent years we have been able to identify a large number of the potential problem areas and at the same time help many avoid them, leading them to a successful outcome. Our recent initiatives have shown that where the will exists on both sides to reach a compromise IBAS involvement in the negotiation will certainly bring matters to a more favourable and fairer conclusion for the customer".