Category Archives: TSC

HBOS Reading – slow progress

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We spent 4 years being defrauded by HBOS employees and associates and a further 10 years trying to expose what the Bank did to our and others’ businesses. For the first three of the ten years it was pretty much the case no one wanted to know and many people, including HBOS executives, were keen to portray my husband Paul and I either as nut cases (what do you mean bankers have committed fraud?) or as whinging business owners who didn’t want to repay their loans. Of course they also repeatedly put us through eviction hearings in their attempts to silence us but that didn’t work out either.

Which is why we have spent years gathering indisputable evidence of the fraud. As a consequence of a collective refusal by bankers and the authorities to believe what we were saying, even when we produced the evidence to support our allegations including in the many Court hearings, we are very aware who knew what and who was complicit in a massive cover up to hide the fraud, a cover up that goes all the way to the top of the Bank.

Nevertheless we did eventually, with the help of many other victims and with the hard work of Thames Valley Police, see bankers and their chums arrested, prosecuted and jailed. That process took over six years from the start of the police investigation. It wouldn’t have taken that long had the Bank been as co-operative as they like to say they were.

Despite the best efforts of many for it not to happen, Lynden Scourfield and Mark Dobson, both senior HBOS bankers, and David Mills, owner of Quayside Corporate Services and his team (including his wife), have gone to jail for a total of 47 years between them. So it is fair to say we and others have been vindicated and finally, albeit kicking and screaming, Lloyds Banking Group did agree to compensate all those defrauded.

It’s now five months since the criminal trial finished and eleven months since Lynden Scourfield (and therefore the Bank) pleaded guilty to various fraudulent scenarios. Despite statements, press releases and comments from the CEO of Lloyds Banking Group and despite a letter to Paul and I from Lord Blackwell saying he hoped that how the Bank would deal with this would restore trust in the Bank, only one person (according to the Bank) has been compensated and a further six (according to the Bank) have received offers.

I have no idea who these people are? No one I have spoken to – I’ve been speaking to victims of HBOS Reading since mid-2007 and the list of names is quite comprehensive – none of them have been compensated.

A representative of the Bank has been quoted in various newspapers saying the Bank are disappointed the compensation process is taking so long because they had a deadline of 30th June 2017. The Bank say the cause of the delay is because victims want more time to present their information. Or to put it another way, the problem is the victims!!!

Victims I have spoken to are also disappointed. They are disappointed the Bank’s chosen method of resolution is via a ‘review’ scheme that seems to be remarkably similar to the failed IRHP scheme or RBS GRG failed compensation scheme. The person running the Lloyds Banking Group ‘independent’ review is Professor Griggs, who I don’t doubt is an intelligent and honourable man. However, he is also someone who has done consultancy work for Lloyds Banking Group and he has been a director of a company where one of the main shareholders was connected to David Mills of Quayside Corporate Services, who was sent to jail for 15 years for his role in the fraud and corruption.

Then there is the way the review is being run. A member of SME Alliance who has met with Professor Griggs, has told us (and we are grateful for the information):

  • Neither the Bank nor Professor Griggs will volunteer any information about the methodology behind the review. Representatives of the Bank have said they cannot comment because Professor Griggs devised the methodology. Professor Griggs has said he cannot give any comment or information because the Bank devised the methodology.
  • A victim who chooses to enter the review process can either fill in the questionnaire Professor Griggs has prepared or they can send their information in an alternative format. Once the information has been received, it will be assessed by a panel and they will make a non-negotiable offer in approximately four weeks. Victims will not know who is on the panel and if they don’t find the offer satisfactory, they can of course choose to litigate (as if the majority of the victims can afford to litigate!).
  • The Bank will pay reasonable legal costs as part of the review but that is limited to a payment for fees totalling 20 hours. I can’t speak for other victims but having met many of them and researched the circumstances behind their cases, I’m not sure it’s fair or reasonable to suggest any victim can condense 10, 12, 14 years of their lives into a 20 hour explanation that will allow their advisers or their legal representatives to present a fully comprehensive presentation of their case.

I’m not sure if the Bank consider they should make additional payments for forensic accountants. I do think they should cover this cost because, let’s face it, some people may find it difficult to calculate losses going back more than 10 years. Additionally, I wonder how many hours the Bank’s lawyers have spent on each victim’s case? I’m guessing it’s far more than 20 hours per case, which hardly seems equitable. For example, Paul and I are not in the review but Professor Griggs does seem to know a lot about our case and it would take far more than 20 hours to go through the copious correspondence between us and HBOS/LBG/ Dentons/Walker Morris and others over the last 10 years. And I wonder what the hourly rate is for the Bank’s lawyers? I know how much one day of fees for Denton Wilde Sapte (now Dentons) costs because I apparently paid a fortune for a senior solicitor representing the Bank’s Board, to attend 6 of our 22 eviction hearings. Will the Bank pay such exorbitant fees to the victim’s advisers? I think not and I am now aware the Bank are challenging the adviser’s fees.

I wonder what will happen if the Bank, having dragged this whole sorry affair out for so long, decide they won’t pay the costs for the victim’s advisers? In theory either the victims themselves will have to pay (so goodbye to the recent ex-gratia payments) or the advisers will just have to stop working.

Conclusion (of the review). Professor Griggs, who may be a very nice man, is not the obvious choice as an ‘independent reviewer” as he has worked for the Bank and had a connection with David Mills through a Company of which he was an Officer. And let’s not forget any money Mills invested in shares or any shares he received as remuneration, came from tainted money or proceeds of crime.

There is absolutely no transparency regarding the review’s methodology – you cannot know how the Professor or anyone else plans to assess your life. If you do enter the review you will not know who the faceless panel are who assess your compensation but you do know their word is final – there is no appeal, debate or discussion. Take it – or leave it and find mega bucks to take the Bank to Court.

Paul and I are not part of the review but I don’t think we are the two people mentioned in the press last week because those people are going down the litigation route. As I know victims who are going down that route and as we are also not in the review, I think someone in the Bank’s press office was slightly confused when they said only two people weren’t participating in the review. Not least because I know of others who, like us, have agreed with the Bank we do not have to take part in it.

Then there’s the number of victims. I’ve been looking at the details of our investigation, which was by no means comprehensive but I don’t understand where the figure of 67 comes from? I can only assume the list doesn’t include shareholders or creditors. I would have thought HMRC would have complained bitterly about that as they are a multiple creditor – not to mention many local Councils.

The biggest disappointment for me (other than the long drawn out time scales, the lack of transparency and the bizarre pretence victims would find the review process acceptable) is the fact this whole situation has been premised on a lie.

I’m not going to go into detail on why I know this is a fact and a huge problem. However, I would just point out to Lloyds Banking Group that, had they done what Lord Blackwell told Paul and I the Bank would do and if they had swiftly, appropriately and generously compensated the victims (Lord B didn’t use the word generously but I’m throwing it into the mix because I believe that’s what he meant), there would have been no delay in compensation and there would not have been endless media articles about Lloyds Banking Group’s extremely disappointing conduct and lack of integrity.

Sorting out this shameful episode was/is not rocket science. All the victims have advisers or legal representation or can get it (there’s no shortage of lawyers offering to help victims). If the Bank had put forward 11 of their best advisers and given them 6 cases each and if the Bank’s advisers had liaised directly with the victim’s representatives, I’m guessing the whole process would have been over and done within a matter of 6 to 10 weeks. I fail to understand why that option wasn’t considered? Why does it have to be so tortuous?

To be clear Lord Blackwell, Mr Horta-Osorio and Mr Colombas, what the victims want is their lives back or as much as we can get back. That won’t happen until they have compensation and closure. I’m guessing the way things are going, the Bank’s major shareholders would also like to see some closure on HBOS Reading before more damaging information about Lloyds is exposed in the press.

It is possible much of what is happening now is designed to wear victims down so that if and when offers of compensation come, the victims will accept anything because they are just tired of fighting. That and the fact many victims are no longer spring chickens and don’t have the time for another prolonged battle. Worse still – some have cancer or other serious conditions.

Of course I can’t prove that theory (it’s not as easy as proving the fraud) but 10 years of dealing with the senior management of Lloyds Banking Group including Sir Win Bischoff, Eric Daniels, Harry Baines, Philip Grant, Antonio Horta-Osorio, Juan Colombas and, more recently, Lord Blackwell, has not instilled any confidence and even if I would like to believe what Lord Blackwell wrote in his letter, I am now struggling.

Where are we now? I have no idea. I’m not actually sure the Bank’s senior management knows but they probably do and this is all by design. Hopefully we will all know a bit more soon but and in the meantime, 30th June 2017 has come and gone and I can confirm the victims are far more disappointed than the Bank or its representatives.

Personally I am disappointed Lord Blackwell has either been insincere in his letter to Paul and I or, less likely, those in the Bank dealing with this matter are not inclined to listen to the Chairman.

 

Nikki Turner                                                                                                                10th July 2017

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Paragraphs redacted from P&N Turner submission to PCoBS 24/08/12

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These are the paragraphs which were redacted by the Commission’s support staff.

  1. The example of bank misconduct we have lived through from 2003 (and continue to do so) is a microcosm of what happened to the whole sector. While we are not professionals in the financial sector, we have been forced to spend the last five years investigating aspects of the banking industry.
  2. Between 2002 – 2007 many SMEs whose accounts were ‘managed’ at HBOS Reading, were forced to use the services of a consultancy firm, Quayside Corporate Services (QS), or have their facilities withdrawn. QS had no affiliation to any trade body for consultants and employed the services of known embezzlers. The cost to the SMEs for these services were between £2000 and £30,000 per month + VAT and expenses. In many cases HBOS insisted QS personnel or its Director became directors of the SMEs and were given full fiduciary control.
  3. Once QS representatives had control of the SMEs, the Bank then ploughed millions of pounds into them. A lot of this money was used to facilitate luxury lifestyles for Bank employees, QS staff and the QS Director. Many of the companies subsequently failed and their assets were sold in pre-pack administration to new companies ultimately owned by The Sandstone Organisation (we are reliably informed as being controlled by the Bank) but run by the Director of QS and/or his staff.
  4. In late 2006 the Bank sent a team from Edinburgh to investigate the loan book at HBOS Reading. In early 2007 the manager responsible for most of the loan book was suspended and subsequently resigned. Between 2002 and 2008, the Bank caused at least 80 SMEs who had the involvement of QS personnel, to go into administration and/or liquidation. We are told the overall losses to the Bank because of events originating at HBOS Reading, runs to billions of pounds.
  5. In April 2007 HBOS closed the business accounts of P&NT who had also been made to use QS and had complained of serious irregularities between 2004-2006. They became suspicious of the Bank’s sudden and aggressive stance towards them and, because any investigation promised by the Bank had not actually been done, they commenced their own investigation into HBOS Reading. By August 2007 they had uncovered evidence of systemic fraud and identified other victims.
  6. In September 2007 P&NT wrote to the entire Board of HBOS setting out their findings to date. The Board rejected the allegations. Also in September 2007, P&NT tried to inform the FSA of the fraud. The FSA did not start any investigation until mid 2009. In November 2007 they reported the fraud to the Cambridge Police who were persuaded by HBOS not to investigate. In May 2010, Thames Valley Police (TVP) and SOCU initiated ‘Operation Hornet’ to investigate what happened at Reading having, by chance, come across the case at a routine meeting at the FSA. They were not asked to look into it.
  7. 9 people have been arrested thus far as a result of Operation Hornet and charges are expected in September 2012 for ‘Corruption’, ‘Money Laundering’ and ‘Conspiracy to Defraud.’ TVP have said HBOS Reading is potentially the biggest banking fraud in British History. The Bank (now Lloyds Banking Group (LBG)) still denies the Turner’s allegations and have refused to compensate any of the SMEs destroyed as victims of the fraud.
  8. HBOS/LBG have tried to evict the Turners from their family home 22 times between 2007 – after they started their investigation – and 2010. Legal costs for a senior Solicitor to attend 5 of the eviction hearings and to deal with matters relating to HBOS Reading, have been paid via a false account opened by the Bank in the name of the Turner’s business, Zenith Cafe Ltd (ZC). Neither the Solicitor nor his Firm were instructed in the eviction proceedings. Approximately £363,000 has been paid from the account to Denton Wilde Sapte (now SNR Denton). By August 2011, circa £250,000 in penalty interest and charges had been added to the account which then showed ZC owed over £600,000. LBG have said this is not a case of false accounting and the Turner’s should never have been sent details of the account. The FSA is still investigating the circumstances of this account over a year on.
  9. The Turner’s have spent the last 5 years investigating the fraud at Reading and other bank frauds. Despite the thousands of factual documents establishing irrefutable evidence of fraud originating at HBOS Reading they have supplied to the police and the FSA, it is a sad fact no authority has had the power or, it seems, the appetite, to make the Bank deal appropriately with the matter. LBG remains in denial and the victims have remained in limbo for years hoping the authorities would act.
  10. A Parliamentary Commission on Banking Standards can only be of service to the Nation if the submissions and evidence it receives, is acted upon and not discarded because it comes from those who have individual and profound experiences of what has occurred over the last decade plus.
  11. From 2007, we have contacted (and in most cases submitted a lot of copy documentation to) nearly every agency and authority including the Treasury Select Committee, Constituent victims’ MPs, Government Departments, the Insolvency Service, the FRC, the CIB, HMRC, the senior Executives of the three Banks involved, the Financial Ombudsman Service, the FSA, the SFO, 3 police forces, two Prime Ministers and two Chancellors. Apart from Thames Valley Police (TVP) and specifically the ‘Operation Hornet’ Team, all have failed us with vigour.
  12. For example, we were recently told by a senior enforcement officer at the FSA, the Final Notice Public Censure of BoS, published on 9 March 2012, could have been published two years earlier but for the difficulty the FSA had getting the Bank to agree to it because of FSMA 2000 provisions.
  13. In an e-mail of 9th March 2012, Hector Sants personally advised us the 6 redacted paragraphs in the BoS Public Censure Notice, relate to HBOS Reading. Obviously we have not read the paragraphs and TVP have confirmed they have not read them either, though they were redacted to protect their investigation. The Bank has read them yet it continues to deny any malpractice at HBOS Reading over 5 years after it reported it as a ‘control issue’ to the FSA in ‘early 2007’ (see FSA ‘brief’ to TSC, March 2010).
  14. As a very serious example of how professional standards have reached rock bottom, we would ask the Commission how senior bankers: who are fully aware of the details of the fraud at Reading; who have read the redacted paragraphs in the FSA Public Censure; who have no doubt read Hansard on the debate about HBOS Reading of June 2009; and, most importantly, have clear evidence of how the billions of pounds the Bank lost because of the practices utilised in the HBOS Reading debacle, are able to repeatedly deny the fraud and therefore not compensate but persecute its customers?
  15. We give as an example of this, UKFI which, although it is not a bank per se, it was charged with protecting the interests of the public’s share in two of our biggest banks.
  16. We can confirm that, when we attempted to approach UKFI in 2009 to make them aware of the serious criminal activity in HBOS, which has since resulted in a 2 year major criminal investigation which could potentially damage the reputation of Lloyds Banking Group, we met with a number of hurdles – not least that UKFI has no contact phone number in the public domain.
  17. After a series of e-mails to the PR Company (who were very polite but who would not give us contact details for John Kingman or Glen Moreno) we eventually worked out the e-mail addresses and sent the information, which was in the form of a copy of a letter to Eric Daniels detailing the Reading fraud.
  18. Our letter, which gave explicit detail of fraud and corruption in a then bailed out bank, was ignored.
  19. In 2010 we attempted again to give information to UKFI.
  20. Again it was impossible to make direct contact and we were told (politely) by their PR company, it is because “UKFI do not have time to deal with the general public.”
  21. We are not surprised they have little time for the public as the senior executives of UKFI appear to feature very heavily in any number of bank hospitality situations. We use one of many links as an example: http://www.ukfi.co.uk/images/dynamicImages/Hospitality%20table%20April%2010-%20Mar%2011.pdf
  22. We understand ‘hospitality’ is now accepted as entirely normal in business. However, the millions of people who were severely affected by the events at RBS, HBOS and its parent Lloyds Banking Group, may quite rightly consider the remit of UKFI is to dine well – courtesy of the banking industry – while ensuring they have little or no contact with the shareholders they represent.
  23. We eventually wrote to Sir David Cooksey and Robin Budenberg copying them in on a letter to Sir Win Bischoff. We made the point a Parliamentary Authority Member had advised us to do this.
  24. The reply we got from a UKFI representative informed us: ”We would direct you to note our Framework document which governs the relationship between UKFI and HM Treasury as sole shareholder of investee companies. This document clearly sets out the requirement of the independence of the Boards of the banks; in particular, that UKFI ‘will manage the investments on a commercial basis and will not intervene in day to day management decisions of the investee companies’… UKFI operates as an active and engaged shareholder. We have no regulatory powers, and no power to demand any information from the banks which would not be usually be provided in discharging our duties…As you may have read in our Annual report and accounts, our remit is to manage the investments to create and protect value for the taxpayer and to devise and execute a strategy for the disposing of investments……
  25. UKFI, as part of their remit to protect value for the tax payer, did not feel a massive fraud in a bank the public bailed out, was of any interest to the organisation working on behalf of the public.
  26. Similarly, the BBA told us in 2009 that, if what we were saying was true, it was very worrying but they could do nothing about it.
  27. The FSA, when we first contacted them in 2007, would not give us anything other than a generic e-mail address to send sensitive and personal information of many of the victims of HBOS Reading – which, understandably, we would not and could not do.
  28. The FSA did not get involved in any investigation regarding HBOS until April 2009 and just before the Debate in Westminster on the Reading
  29. We have spoken to many people in the banking profession since we started investigating HBOS Reading and many of them have confirmed to us they work under a regime of fear where missing targets would severely affect the bonus structure which, many of the public do not realise, goes right through the banking system and is not limited to senior executives and traders.
  30. For example and notwithstanding the Reading fraud, HBOS informed us in 2004 they were sending an accountant to review our figures. They did not inform us this would cost us over £1000 for a one hour visit. Neither did they advise us before deducting this amount from our account.
  31. Another example is how the banks’ lawyers charged us £3000 for a standard debenture document while our own lawyers charged £270.
  32. In the case of the Reading victims, all of whom were/are Company directors, the losses to their businesses and to themselves, far exceeds £150,000.
  33. In our case, corporate governance has allowed an internal fraud to progress to a major police operation and FSA investigation because no one at Board level would deal with the matter appropriately, in either HBOS or LBG.. Or so it would seem given the repeated denials for 5 years that anything was wrong.
  34. We have pointed out to the various Boards under various stewardships (Andy Hornby, Eric Daniels, Antonio Horta-Osorio) and on various occasions, the potential damage to the reputation of the Bank because of the scandalous proportions of the HBOS Reading fraud, should have been curtailed and minimised by proper adherence to the Law and sensible damage limitation.
  35. We have no doubt the Bank executives considered it impossible we, as customers, would ever have progressed the investigation of the fraud this far. But that is no excuse for their lack of corporate governance which: a) allowed such a huge fraud to be perpetrated against the Banks’ clients and its shareholders in the first instance and; b) exposed an extreme lack of corporate governance which would put the good name of the Bank at risk and further penalise the victims of an internal bank fraud, by attempting to cover it up rather than exercise proper management, governance and damage limitation.
  36. We advise the Commission, a former HBOS Executive has confirmed to Paul Moore that, in the over £1 billion Reading fraud, only a minority of the Board were “in the know” in 2007 while the others were told HBOS Reading was a minimal problem concerning amounts up to £49M and it had been dealt with.
  37. Clearly this was a case of executive and non executive directors being kept “in the dark” as to the true events concerning the Bank’s risks. Again we would suggest non executives, because of their other commitments, are unlikely to seriously challenge reports from executive directors or committees.
  38. It would be wrong for us to go into any great detail of how we feel the internal audits and controls at HBOS between 2002 and 2007 were a total misrepresentation of the true facts, as we would go into territory that could be harmful to Operation Hornet. However, there is absolutely no doubt that, overall, HBOS and particularly Bank of Scotland had, by 2004/5, become the ‘basket case’ of banking. This is not a term we invented but a term we have heard used by many people in the banking sector.
  39. It could (reasonably) be said we are not the biggest fans of the FSA. However, we can only conclude that, in the case of HBOS, the information given to the FSA with regard to internal audit and control between 2002 and 2007, was, in many instances, a work of fiction – the Arrow Reports.
  40. This was clearly evidenced in 2010 when the FSA sent the TSC a document detailing their version of events originating at Reading and based on a ‘control issue’ reported to the FSA in ‘early 2007’. It was fortunate the TSC copied the ‘brief’ to us so we were able to amend the document with the true facts.
  41. On a specific note and given it does not fall within the remit of Operation Hornet, we would draw to the Commission’s attention the false account HBOS set up in the name of our Company, Zenith Cafe Ltd., to pay the Bank’s legal expenses relating to HBOS Reading. These fees were nothing to do with Zenith.
  42. The account was opened in March 2008 and we were not aware of it until we started to receive interest statements from January 2010 and letters advising a ‘£30 Excess Overdraft fee’ had been added and would we bring the account into line with its facility. In June 2011 and after two requests from the Company’s Accountant, we received all the historical statements which itemised debits and the interest and charges applied. We believe they were sent by a whistleblower and the Bank have since confirmed we were not supposed to have sight of this documentation.
  43. The bank have said this is an ‘internal account’ to keep track of the costs relating to Reading and they never intended to ask us, as Directors, for the money back. We already had letters asking for the money.
  44. Additional to the £372,000 for debits made from the account, predominantly for fees to Denton Wilde Sapte (now SR Denton), the Bank have added approximately £250,000 in penalty fees and interest thus eliminating the possibility this was an internal ‘managers obligation account.’
  45. The account clearly shows a £372,000 debt of the bank as also being a £600,000 debt of our company, so a credit of the Bank. Clearly it is false accounting which we have reported to the FSA and the police.
  46. The FSA, after one year of investigation, say they have not got to the bottom of the matter. We bring it to the Commission’s attention because we do not consider it is at all likely this account is in isolation.
  47. As external whistleblowers, we would warn anyone pondering this route to consider carefully what they are doing before they start. In 2007 when we first uncovered the Reading fraud, we believed it would be quickly remedied for the victims by reporting the matter to the Board of the Bank. Nothing could have been further from the truth.
  48. As noted in para. 13 above, we have, since 2007, contacted every agency and authority possible alerting them first to the fraud and secondly, to the untenable consequences for the victims.
  49. Five years on, the situation remains the same for the victims. The Bank remains in denial despite a two year criminal investigation; we have undergone 22 eviction hearings in 3 years in an attempt by the Bank to silence us and which the Bank paid its additional legal costs via a false account in the name of our company (the actual legal costs were added to our mortgage) and; we continue to live like paupers.
  50. Finally on this aspect, we have personally seen some extraordinary fantasy accounting and conclusions from the Big 4 auditors in the HBOS Reading scenario, including serious breaches of accountancy standards and breaches of the Law. We are not at liberty to evidence these breaches to the Commission at the present time but we certainly will be able to when Operation Hornet is concluded.
  51. In June 2011 we prepared a dossier establishing a ‘time line’ of the conduct of the FSA in relation to the HBOS Reading fraud. This document was copied to the Treasury Select Committee and we would be happy to submit the same to the Commission, if requested. It is a detailed example of the conduct of the FSA in relation to established criminal activity in a bank. Over a year later, nothing has changed for the victims of HBOS Reading and the FSA has taken no enforcement action against the individuals at any level and who enabled the Reading fraud to happen.
  52. At all costs banks will not admit any fault or accept any responsibility even where the evidence clearly promotes a different approach. We cannot calculate how much money HBOS and subsequently LBG have spent defending their position regarding HBOS Reading but almost certainly, the end tariff will cost much more than it would have cost had the Bank dealt appropriately with the matter back in 2007.
  53. We use this question to highlight all we have said in our document and, in order to give the Commission perhaps the most blatant example of just how low professional standards have gone in banking, we use the Farepak debacle as an example.
  54. Our interest in this case dates back some time as the HBOS employees tasked with the Farepak problem, are the same team charged with dealing with the SMEs whose accounts were held at Reading and whose businesses had Quayside Corporate Services imposed upon them.
  55. We have read some of the transcripts of the Farepak trial (May to June 2012). The case against the Directors of EHR was brought by the Secretary of State. It claimed those directors were responsible for 133,000 people on low incomes unwarrantedly losing money they had saved for Christmas vouchers.
  56. What the case actually exposed was how the HBOS team used ‘hard nose tactics’ to block any solution the Directors of EHR proposed in their attempts to save the depositor money and keep Farepak trading.
  57. We don’t intend to go into great detail and we do not believe the Farepak injustice is a closed book.
  58. EHR requested additional funding of £5M in April 2006 to trade the company out of a problem caused by the demise of its main voucher supplier. In its attempts to source this shortfall, which the Bank would not facilitate, EHR was made to spend well over a million in fees to accountancy firms.
  59. HBOS, who refused to ring fence any of the savers’ money already deposited, received a further, circa £18M between April and October 2006 from the Farepak savers. This cashflow was used by the Bank to reduce EHR’s borrowings and allowed the business to carry on trading.
  60. The EHR Directors pursued at least 7 different avenues to secure the funding during this period, none of which were acceptable to the Bank and the Company was put into a pre-pack administration at the beginning of October 2006 causing the savers to lose all their money.
  61. As a PR exercise, HBOS initially put £2M into the ‘Unfairpak’ campaign and more recently they have added an additional £8M. We believe the winding up of the Business will finally cost circa £9M.
  62. Therefore a total of at least £10M has been paid in fees by a business that was looking for £5M additional funding; the whole exercise has cost HBOS itself £10M plus a serious loss of reputation; 133,000 people lost a net total of approximately £25M of the £37M they thought they had saved to ensure their families had a good Christmas plus they suffered all the anxiety caused by this conduct.
  63. A team of 3 or 4 people under the ultimate leadership of Peter Cummings, who was CEO of Bank of Scotland in 2006, brought about this shameful situation. We would make the point; in the transcript, one of the 4 describes his job as being part of the ‘High Risk’ team in 2006.
  64. When we dealt with the same team of people in 2007, their title was ‘Impaired Assets – Structured.’ The difference between High Risk and Impaired Assets is very clear. High Risk may look at resolving a situation by the addition of extra funding. Impaired Assets has a remit which does not include the possibility of any additional funding whatsoever and almost always, unless the clients themselves have a financial resolution, has an insolvency outcome.
  65. The Bank’s position and conduct is laid out very clearly in the transcripts of the case, days 11, 12 and 13. We believe it begs a question of whether HBOS ever intended to find a solvent solution for Farepak or whether the team from HBOS was, in fact, the ‘Impaired Assets’ team who always intended to put Farepak in Administration and simply allowed the directors of EHR to go through the process of finding a resolution in order for the Bank to get in all the savers’ money?
  66. Having met this ‘team’ and having seen how the SMEs associated to HBOS Reading were dealt with by this team, we suggest there was never any intention of saving Farepak. And while we fully appreciate a bank has every right not to extend further credit to a customer (business or individual), we would point out to the Commission that, simultaneous to the Bank’s refusal to assist Farepak with further, minimal funding, it was ploughing tens of millions of pounds into a business with almost no turnover and which had been put under the control of the Bank via its consultants.
  67. In July this year we sent information to a representative of Unfairpak who attended a meeting with Dr. Vince Cable MP after the Farepak trial had concluded and which placed no blame on the Directors of EHR. Our purpose was to evidence the blatant ‘double standards’ the Bank was applying to businesses at the time of the Farepak demise. Following is an extract from our e-mail and the figures are factual:          “..The other thing we think you should know is that contemporaneously to EHR going into liquidation for the lack of £3M to £5M, BoS was ploughing millions of pounds into a company called Corporate Jet Services (CJS). Looking at their accounts and giving a rough calculation, we can see the Bank allowed CJS to increase its borrowings by £19.671 million between April and September 2006 and the turn over for the same period in the cash book was £497,770 of which just over £125,000 was a repayment of VAT from HMRC.
  68. The Bank would say of course, it is down to their discretion how much money they give companies. However, it should be noted the Bank owned all the shares in Corporate Jet Services and despite the tens of millions of pounds they put in to the Company, it went into Administrative Receivership on 26th September 2007 owing the Bank £113M, according to PwC’s Administrator’s Report. Post the appointment of PwC, the Bank allowed the Company to pay £26, 244,708.73 to one subsidiary which was then sold to the now ex directors of the company for £1.00; £2,407,314.31 to another subsidiary that was also sold to the ex Directors for £1.00 and also £333,912.40 to PwC, who had already received £160, 054.84 a month before the Company went down.
  69. In total, the Directors of the Company (one of whom is a main suspect in the Reading case) paid £7.00 and a promise to acquire all the assets of CJS leaving the Bank with a massive debt which, had they taken action in May 2007 when they first brought in PwC to produce a report on the viability of CJS, the amount would have been reduced by at least £6 million.
  70. Additionally, this company had a £800,000 agreed overdraft facility that should have been renewed on 27th November 2003 but wasn’t and by the end of April 2006 the Company had an unauthorised OD of £28.6M according to the accounts for the year ending 31st December 2004 filed at Companies House and which were signed off in June 2006.
  71. Some additional points to be noted from the above comparative scenario between CJS and Farepak. The person dealing with both situations for the Bank, was the same. The PwC person involved in both matters was also the same. The PwC person not only advised the Bank regarding the failed rescue packages in the Farepak debacle, he was also the Bank appointed Administrative Receiver of EHR.
  72. An editorial note concerning the above e-mail extract. It should be noted the sale of the CJS subsidiary Companies to the ex Officers of CJS for £7 and a promise, was completed immediately prior to the Company being placed in Administrative Receivership on 26th September 2007. The first payment stated above as being made by the Bank to one subsidiary Company for £26+M, was made on 27th September 2007 and the payment to a second and different subsidiary also sold on 26th September, was made on 9th October 2007. Both payments post date the appointment of PwC.
  73. We are now into our 9th year since we unwittingly became the victims of the HBOS Reading scandal. Even if we one day get to the end of it and receive the compensation we are undoubtedly due, no one can give us or our families back the 9 years we have lost.
  74. Similarly, no one can give back the Farepak victims’ Christmas of 2006. These are just two scandalous situations out of many caused by bad banking practice. The most worrying thing is – no one has done anything to curtail this sort of behaviour and it continues.

“Ill Founded and Misconceived” versus 47 Years In jail. Updated #HBOS Reading

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I am adding this update to the blog I wrote last February and just after Lynden Scourfield and five others were sent to jail. That was over six months ago.

I was fairly optimistic throughout March and April that the Bank were going to do the right thing and swiftly even although I should have realised at our meeting with the Bank in March, the quest for justice and compensation from the Bank was going to be a long haul.  At that meeting the Bank’s representative expected us (Paul and I) to accept the statement “it is a fact that prior to the trial the Bank had no evidence of criminality.” He said this (and repeated it several times) to the people who have been sending evidence of criminality to the senior management of LBG and their lawyers since the merger with HBOS happened. So the statement was clearly a blatant example of “false truth” or whatever the latest fashionable definition is for “a lie” and it was never going to wash with us. You can’t rewrite history just the same as you can’t lie to yourself even if your bosses can insist you lie to others.

The latest hiccups include: the Bank are not (contrary to their reports to the media) prepared to pay the ‘reasonable’ costs for the victims lawyers/advisers unless they give the Bank chapter and verse on what they are doing for their clients. As if??? As if the advisers will tell the Bank the private and confidential details of the work they’re doing with the victims. Then, if the Bank’s faceless panel make an unacceptable offer of compensation and the victim has to litigate, the bank already have all their information supplied by the advisers. Do the Banks lawyers really think we are all that stupid? And of course the more obvious point – if the bank won’t pay the lawyers/advisers for the victims and the victims can’t pay them, the victims could end up with no legal advice vs the Banks magic circle lawyers.

Another hiccup: some victims who didn’t have dealings directly with Scourfield of Dobson but were in any event destroyed by their lieutenants,  acting on Scourfield /Dobson’s orders, have been told by the Bank they are not considered as victims. The criteria is you have to have dealt directly with Scourfield, Dobson or Quayside. But believe me, some of those working for Scourfield really enjoyed their jobs and were every bit as ruthless and criminal as he was – but they didn’t get arrested. Maybe they will one day but in the mean time I hope the Bank stop the absurd pretence that victims of Scourfield/Dobson teams did not suffer.

Some might say optimism is an ill advised trait in this day and age.  Nevertheless I still think Lloyds will ultimately do the right thing – the question is when? They didn’t meet their target of 30th June to compensate the victims and I wonder if we or the media should have asked Mr Horta Osorio whether he actually meant the deadline of 30th June was June 2017 or 2018? But they will have to do the right thing sooner or later because the alternative would cast serious doubt on whether the Bank’s Chairman and CEO are ‘fit and proper people’ to be running a Bank.

At the end of the day, the Bank’s lawyers can plot all they like to delay or decrease the compensation thus increasing their own remuneration. But the blame for prolonging the misery of people who have already suffered unnecessarily for so many years (it was unnecessary because both HBOS and LBG were fully aware of the criminality years ago) will not be laid at the door of the lawyers –  the blame will go to Lord Blackwell and Antonio Horta-Osorio.  I hope their lawyers are not trying to persuade them that won’t happen because that would be another false truth and potentially a very costly one.

24th July 2017

 

What a week!

As many people reading this will know, on Thursday 2nd February the Judge in the HBOS Reading trial sentenced the five delusional Defendants who pleaded not guilty and the one Defendant who did plead guilty, to a total of 47 years in jail. I was in Court for some of the proceedings and I know many people who couldn’t attend will want to know how it went.

Paul and I didn’t get to Court until about 11.45. Partly because we had the BBC at our house by 6.30am to do Breakfast TV, which was quite an odd experience because we generally get interviewed by people who know a lot about the HBOS Reading fraud. So I kind of felt we and Steff McGovern were talking about different stories and I hope we have a chance to go back and explain it to Steff in more detail so we’re on the same page!

By the time we got to Court it was packed. So packed all you could do was stand by the door at the back of the Court. A lot of press were there as well as a lot of the victims and they were doing the mitigation pleas when we arrived. I went in and listened for 20 minutes and then had to leave. I had to leave because one Defendant’s QC was talking about the hardship it would cause his Client’s family should he be incarcerated! Another pointed out his client was over 60 and in ill health!!!

I always think anger is a dish served silently and after reflection but I wasn’t sure how much longer I could stay silent or reflective in light of these comments. The families of scores of people including mine, have been devastated for years because of these people. Many of the victims have been serving a prison sentence for years and so have their children. We’ve had businesses trashed, no livelihood, no way forward because this has taken so long to reach a criminal conviction and we’ve been living on the breadline. On top of that our reputations, our credit ratings and our dignity has been smashed (yes Nigel, I pinched that from your excellent piece on BBC News at 10!).

Meanwhile, some of the people in the dock have been living like kings and indulging in every possible luxury (not always the luxuries that are to everyone’s taste) on the back of what they stole from SMEs. I say ‘some people’ because there were various degrees of ability or desire to indulge and these have been reflected in the Judge’s excellent summing up and sentencing.

On the subject of not being sent down because someone is 60 and in ill health – I am now 61, my husband is now 65 and we would consider our health to have been destroyed except for the fact other victims have fared far worse – at least five victims are dead!

I decided not to listen any more and I joined Paul in the corridor. I’ve done my best to keep Paul out of the Court room since September 2016. As many of the SME Alliance members will know, he has a photographic memory and I believe he would have been severely agitated to hear some of the evidence from both sides of the case.

We weren’t sure if the sentences would actually happen in the afternoon but fortunately they did. Again I could only squeeze into the back of the room because it was overcrowded. It was also incredibly hot and I began to wonder if people might start to feint from the heat and stuffiness – and the tension.

All through this trial it has been incredibly difficult to hear what is being said and Thursday last week was no different. People coughing, blowing their noses, turning pages of note pads (I was horribly guilty of that), people shuffling in their chairs and the Judge talking very quietly because of appalling acoustics – it’s been a nightmare. But everyone was doing their best to be quiet and hear what the Judge was saying. I don’t have to repeat what he said because it is documented, has been repeatedly reported on and is on the SME Alliance Public Interest page. But you had to be there or maybe you had to attend the entire trial, to get the impact of the Judge’s speech.

More than the sentences the Defendants’ got, I was grateful for that speech. He really got it – he really knew who these people were. The greedy ones, the stupid ones and the evil ones. Judge Beddoe knew exactly who was who in this trial and what their role was or what their importance was. This was so important. A Judge, any Judge, has to remain impartial throughout a trial and although all the way through the trial Judge Beddoe repeatedly picked up on things others in the Court missed, he was always impartial. But clearly he knew who he was dealing with and his speech before sentencing made that very clear. I and others have noted throughout the trial, Judge Beddoe is an exceptionally intelligent man and we were lucky he took this case. I am pretty sure he, like Paul, has a photographic memory – thank God.

Even in the middle of the chaos all around and with people cheering in the Court at the result, I genuinely felt for the first time that all the hard work Paul and I have put into this for 10 years, has been worth it. Not because these Defendants who, let’s face it, are either damaged, delusional or sad people, have been sent down for so long – in lots of ways I think losing their assets, their reputations and their livelihoods (like their victims) would have been almost as damaging as prison – but because I can now start to believe after all this time, perhaps our justice system can work.

I know all the victims of HBOS Reading will be grateful to the Judge, the Jury (they were brilliant), Brian O’Neil QC (Brilliant) with his team and Thames Valley Police (especially Mick Murphy) and, as you can imagine, it was a fairly emotional moment when the Judge read out 15 years for Mills, 11 years 3 months for Scourfield, 10 years for Bancroft, 4 years 6 months for Dobson and 3 years 6 months for Mrs Mills and Cartwright. I imagine it was even more emotional for them.

It would be wrong to focus on the downside after such a result but sadly there is one. We, the victims, won a battle last Thursday, definitely the biggest one we’ve fought so far – keeping that trial on track and getting the result (Paul and I have had to win 22 court battles over the last ten years to keep our house). But we haven’t won the war. HBOS have known about this fraud since 2006. Lloyds TSB have known about it since at least 2007 while Lloyds Banking Group (LBG) have known about it and certainly at a very high level, after the merger with HBOS in 2009. Peter Cummings, Andy Hornby, Lord Stevenson, Sir Victor Blank, Eric Daniels, Sir Win Bischoff and Antonio Horta Osorio. They have persecuted us and other victims for years in the knowledge every allegation we have made was correct. Why? How? How could this have happened? And even now when six people have been sent to jail for over 47 years, LBG are still putting out bland obfuscation as soundbites instead of doing the right thing. What will the latest Chairman of Lloyds Banking Group, Lord Blackwell, do now?

What will Andrew Bailey, the CEO of the FCA, do now?

HBOS could have resolved this years ago – so could LBG. It would have cost peanuts compared to what it will cost after the criminal trial. There must be a reason the Banks didn’t do the right thing? Is all this denial just hubris? Or is this because the management feel obliged to continue with their denials in order to stop an even bigger scandal coming out?

I’ve called this blog “Ill-founded and Misconceived” because that’s what the Deputy Chairman of Denton Wilde Sapte said about our irrefutable evidence back in 2008. He wrote this in a letter to us on behalf of the Board of HBOS and after HBOS had done various investigations establishing the facts as documented in the criminal proceedings. I think the ex Board members may well regret leaving the letter writing to Mr McAlpine.

One last thing – much as I think he was always fighting a losing battle and he lost, I was very impressed by Mills’ Barrister Kieran Vaughn QC. So that’s two names for the record – Brian O’Neill QC and Kieran Vaughn QC – just saying.

HBOS – The Long Road To The Truth SMEs Already Knew

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I am of course delighted that yet another report is out about why HBOS failed and this time from the Treasury Committee. But I am also devastated to realise that 9 years after Paul and I started our investigation into HBOS; 8 years after we started writing letters and reports to the TSC; 8 years after journalist Ian Fraser and others published some of the unwholesome truths about HBOS and; 11 years after Paul Moore blew the whistle on the risks HBOS was taking, we now have yet another report arriving at the same conclusions we arrived at years ago re HBOS and the regulators. How can it be that such blatant misconduct has taken so long to identify?

As the truth becomes more and more apparent to the public, I can’t help feeling my family and many others would not have lived through 9 years of stress, anxiety and poverty had the authorities been prepared to listen to us when we first reported HBOS to them. Not just us and not just regarding HBOS but the numerous business owners who repeatedly report misconduct in our banks but whose views and allegations are not considered by any authority as we are not deemed to be ‘professionals’ with regard to the financial sector. Meanwhile the views and comments of bankers and other so called ‘professionals’ are given full consideration and endless hearings. I have been asking for a meeting with Mr Tyrie and the TSC for years – originally to give them information about HBOS and more recently to expose the collective issues of SME Alliance members.

I was disappointed again last week to hear Andrew Bailey, the new head of the FCA, pooh pooh SME Alliance to Andrew Tyrie – and, of course, we will not get a chance to reply except by letter. So while I’m really pleased the TSC is taking a more pro-active approach to miscreant banks and ineffective regulators, I really hope that in the future the voices from the SME sector are listened to earlier because we are on the front line and when it takes 9 years to expose the truth, we are the ones who suffer the consequences.

Here’s an extract from a letter to Andrew Tyrie and the TSC dated 27th February 2014 (the main part of the letter was about HBOS Reading so it can’t be published – yet).:

……..We bring this to your attention because this seems to be the crux of the problem between banks and SMEs:

There is no appetite from the authorities to prosecute serious criminality in the financial sector and because, it would seem, the FCA Objective of “Market Confidence” overrides all the other Objectives and Principles and even the Common Law. The Banks are fully aware of this and see no reason to stop the rape and pillage of SMEs because it is so highly lucrative for them.

The endless and substantial fines levied by the FSA/FCA against the big banks, are totally ineffectual in curtailing criminal activities or misconduct. How could these fines possibly work when no one is held responsible and the shareholders pick up the bill? We would ask how, in a democratic country, a bank can break the law by laundering money for drug cartels and yet no one is to blame? Do the drug cartels pick up the phone to an anonymous voice at a call centre specifically in place for money laundering – Press 1 for drug money, 2 for tax evasion, 3 for arms deals? Or do real people in the banks negotiate these deals? As we understand it, money laundering is considered to be a very serious crime – unless, apparently, you are a banker. And if Banks can override the law of the land so successfully, what hope is there that the authorities will step in to protect small businesses? And we have seen startling evidence where HBOS have been able to manipulate the justice system to keep the Bank and its employees out of criminal trials.

We have asked, on more than one occasion, for a meeting with you Mr Tyrie. The evidence we hold (which is not all with the police or the FCA – mostly because they do not want it under their remits) is, as our friend Mr Ken Olisa has described it, a time bomb waiting to go off. And even we, who are truly disgusted by the behaviour of some senior bankers, feel we should share the evidence with someone in authority. Not least because our 6+ years of work should be used to stop financial institutions being able to set up situations like HBOS Reading or GRG. Sub judice cannot last forever. Neither can the victims of these devastating crimes against small businesses be asked to rely on authorities who repeatedly do nothing to remedy the situation. And we believe pressure should be put on both Lloyds and RBS to rectify their bad treatment of SMEs before the true facts surrounding HBOS / Lloyds Banking Group are fully exposed as a last resort. ……

…..Surely the time has come when the TSC has to listen to the voices of those business owners affected. We have watched the endless TSC/PCoBS interviews with bankers like Lord Stevenson, whose performances and explanations, quite frankly, beggar belief. But we never hear the TSC interview people from the other side of the fence. We never even hear about this being done ‘in camera.’

We can assure you the FCA has no interest in talking to individuals outside of the sector; the FOS is ineffectual when it comes to SMEs and; the police take little notice of reports of criminal conduct by banks if the report comes from individual business owners. In our case, when we made allegations of criminality at HBOS to the Cambridge police in 2007, we were told we were simply ‘”collateral damage” and only the Bank could request an investigation. The Bank, of course, did not want an investigation and insisted nothing criminal had occurred. Worse still, there is nothing the banks like more than to fight allegations against them by SMEs in the Civil Courts, where their highly paid legal teams rip business owners to shreds.

So who can SME owners report to Sir? As things stand, no one. And where can they get justice? No where. Our only hope is the Court of Public Opinion – and even that is becoming an increasingly lame option because most newspaper editors are unhappy to publish anything but the most generic of banking misdemeanour’s like PPI or IRSA. They need the advertising revenues and financial support from banks and, in many cases, the interests (some might say contamination) of executives who are board members of both banks and media groups, are instrumental in blocking adverse publicity.

What we need, without doubt, is a reliable and official method of communication between business owners and Government agencies like the FCA and the TSC. This must include people with first hand knowledge of serious malpractice by banks and/or bankers. We don’t suggest every business owner with a gripe against a bank should have access to the TSC. But where major frauds are perpetrated against multiple SMEs, we believe the TSC should be willing to listen to business owners and, further more, the banks should know the TSC will listen”……

Much has been said previously about giving the FCA more powers (to do what I wonder?) – personally I would like to see the TSC have more powers to act on all the information supplied to them. Because while I’m sure the great and the good dread being grilled by the TSC, ultimately they know little will come of it and that is a terrible waste of resource, time and opportunity. The TSC should be able to take action on their findings. Alternatively and as this latest report suggests, a completely separate agency should deal with enforcement of financial regulations. Either way someone should be able to deal more effectively than the FCA with financial misconduct and/or economic crime and it should be done in a timely manner – because 9 years is a long time to wait for justice. Not that we’ve seen much justice yet.

One last thought – we’ve recently had the FCA report into HBOS, the Andrew Green QC report into the FSA’s conduct in relation to HBOS and now the Treasury Committee report on Why HBOS failed – and that’s on top of the Bank of Scotland Censure report and the PCoBS report. We have all these reports identifying failure, negligence, incompetence and whole host of other issues  – so what happens next? Anything? Will we start to see bankers really held to account – will we see bankers prosecuted where appropriate?

Or will Mr Bailey’s comments in the Telegraph 14th December 2012 suggesting we can’t apply ordinary law to bankers, still hold fast:

“…would be a very destabilising issue. It’s another version of too important to fail. Because of the confidence issue with banks, a major criminal indictment, which we haven’t seen and I’m not saying we are going to see… this is not an ordinary criminal indictment.” http://www.ianfraser.org/dear-mr-cameron-if-bankers-are-above-the-law-we-need-an-urgent-explanation/

Dear Sirs, this is hardly flattering. Please redact. #HBOS

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IMG_3454I’m confused – for years now the FSA followed by the FCA have been looking into the conduct of HBOS. Whether or not he is considered good guy or bad guy, I know Hector Sants (who admittedly took some persuading) was eventually keen to get to the bottom of what had been going on in HBOS and he wasn’t in the mood for ‘cover up’ when he released the BoS Censure Report in March 2012. Not long after that he mysteriously went from being the golden boy tipped to take a top job at the Bank of England, to relative anonymity. Since then nothing has been heard about the Section 168 Report commenced in June 2010 specifically into HBOS Reading (probably because of the ever pending criminal trials due to start in January 2016) and the overall report into HBOS and its top management has been continually delayed.

Articles in the press yesterday seem to confirm that report will be out next month (October 2015). However, even now, after the endless delays and God knows how much spent in legal fees by the Bank (I imagine Lloyds has picked up the bill for Stevenson, Hornby, Cummings and Crosby – if he’s actually included) and the regulator, we have now been warned to expect redactions.

How does that work? The regulator does an in depth investigation into the catastrophic demise of HBOS and the people who were running the Bank don’t like the conclusions the FCA have reached – so they are able to have certain parts redacted. I’m not saying the report found anything criminal (although in my personal view I fail to see how it couldn’t have found some very shady conduct) but even in a civil court, could someone ask a Judge to redact the bits of evidence they don’t like? Imagine, “your honour, I don’t think the evidence before you puts me in a favourable light so I’d like that bit crossed out.” I would love to have any current photo taken of me photo shopped so I look thirty years younger but the truth is, I’m not. These possible redactions are similarly trying to change history – and it can’t be done. Neither should anyone countenance attempts to do so.

I have been told (repeatedly) that the FCA has quite extraordinary powers, should it care to use them. I know the powers of the FSA were split between the FCA and the PRA but all the same, how can top bankers or their legal teams, oblige the regulator to redact the findings of its own report? It makes no sense. Neither does the sharp ‘Harp’ exit of Mr Wheatley make sense. I find the whole thing very concerning. Rumour (or the media) has it, Mr Wheatley was too ‘consumer friendly’ and this did not fit in with Mr Osborne’s plans to make sure the City Of London retains pride of place in the financial world. Which is a bit odd because lately, even the BBC has been portraying the Square Mile as something akin to the Guild of Thieves from the Disk World.

Therefore, what worries me is this: if Mr Wheatley had to go because he wasn’t banker friendly enough, how can we expect Mr Osborne to allow a full, frank portrayal of what went on at HBOS?

Although various MPs and, I think, the TSC have demanded to see any redacted passages, how can other people, who have first hand experience of what was going on at HBOS, ever challenge what they will never see? I do know what some of the information and evidence the PRA received to contribute to this report was, as I sent some, as did Paul Moore. We didn’t send it randomly in the hope someone would read it, we were in direct contact with the PRA and the Bank of England via the Governor and we know they all received and read our evidence. Consequently we have our own views on what the FCA Report should include. It’s not a pretty picture and I have often wondered how the bankers concerned would refute this evidence? Well obviously, if the contentious or nasty bits of the report are redacted, they won’t have to!

Redaction has been a big issue with SME Alliance recently. Members sending Direct Access Requests (DSAR) to get their information from their own central files in banks (mostly RBS) have received such varied replies, we’ve asked both RBS and the Information Commissioners Office (ICO) to clarify exactly what members should expect to get. The answers so far have been as clear as mud but it is pretty clear no one should be getting entire pages redacted. Neither should anyone be getting information that has been manipulated or tampered with (that’s another story coming soon). We are struggling to get to the bottom of Section 7 of the Data Protection Act 1998 and a definitive interpretation. But I’m not sure Section 7 of the DPA was ever intended as a barrier to regulators publishing reports on banks or bankers! Neither was Maxwellisation and the remarkable Re-Maxwellisation meant to be used as a means of delay or ‘cover up.’ These are clearly new techniques invented by the very clever (and well paid) lawyers of La La Land – but that doesn’t mean we or the regulators should blithely accept them.

My other concern is that while this report may actually be more candid than others before it (I’m remembering the 1 page press release fiasco from Lord Turner about RBS http://www.publications.parliament.uk/pa/cm201213/cmselect/cmtreasy/640/640.pdf ), it will be written in such a way as to minimise any potential legal actions against Lloyds Banking Group who merged with HBOS. Contagion is a huge issue for the banks and I’m sure the emphasis of this report will be on “this is what HBOS did but Lloyds were totally unaware of any of this.” Which begs the question (again) – why would Lloyds go ahead with such a critical merger without knowing chapter and verse of what they were getting involved with? Money laundering rules being what they are these days (or profess to be), banks need so much information to open an account, I’m waiting for “what colour knickers are you wearing” to be added to the list of KYC questions. So it is inconceivable Lloyds had inadequate detail about their new partner. And, in my opinion, Lloyds didn’t just merge with HBOS, they’ve done a pretty good job at morphing into the same sort of unethical and unattractive organisation.

Last thing – I know many victims of HBOS have waited years now for some sort of closure. The criminal trials regarding HBOS Reading have taken years to happen (if they ever do) and the various reports on HBOS have been endlessly delayed and now (probably) redacted. While I don’t suppose the ex management of HBOS have been quite as cavalier about the FCA report as they were about running the bank, I very much doubt if any of them have suffered anything like the hardship the banks’ victims have. Some of us have had our businesses ruined and our lives on hold for many years. Not to mention the many people who lost their savings and their retirement plans via the disastrous way HBOS was run. So I really hope, regardless of the HMT’s desire to hang on to its golden goose (that many of us feel is actually a dead duck), that when the HBOS Report does finally come out, it is as honest as harsh and as damning as it should be. Hector left us with the BoS Censure Report – before Mr Wheatley left, let’s hope he finished the job and, for once, let the blame fall where it’s due.

Save The Bank, Call In The Diplomats! Really??? #RBS

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IMG_5058aBefore SME Alliance was started, I would have been hard pressed to believe any bank could behave as badly as Bank of Scotland and its keeper Lloyds Banking Group. Now I’m pretty sure RBS could give HBOS/Lloyds a run for their money in the bad banking stakes. Not a day goes by without a new nightmare story about RBS or Nat West arriving in the SME Alliance in box. Which isn’t to say HBOS/Lloyds has been knocked off my top spot but is rather, a sad reflection of how systemic malpractice is in our banks.

Consequently I don’t know whether to be shocked by the news Jacob Rees-Mogg has asked UKFI to call in the troops to get RBS out of it’s £5BN fine from the US, or whether I think he has a point? From my own point of view it’s tough enough to get RBS to compensate the many UK firms it trashed in its GRG division or it has forced into bankruptcy with exorbitant exit fees for destructive products like IRHP. In fact it’s hard enough – in the face of indisputable evidence, to get them to admit black is black. Paying £5BN to the Americans will surely make it even tougher for UK victims of RBS to get compensation? And what about shareholder (taxpayer) value? We’re already reportedly going to lose £13BN on the sale of RBS – do we have to add £5BN to that figure?

On the other hand, as the US authorities have levied this penalty for the banks sub-prime activities, should RBS, yet again, get away with no penalty? God knows why (and he’s not telling) but apparently senior bankers can’t get prosecuted for the multi billion pound scams they over see, so would it be right to use diplomatic means to curtail the US ability to fine banks as well?

I think this is quite an extraordinary conversation reported in the Telegraph today:

(UKFI) “Are you saying to the Treasury they should use the government’s diplomatic efforts with our closest ally to avoid the British taxpayer being fined $8bn by the American taxpayer?”

(Mr RM)“If I were you, I would be saying, what is the British embassy for if it is not trying to get RBS off this fine? Our closest ally fining us $8bn is pretty stiff.”

There’s a spin and a half. This suddenly isn’t about the misconduct of RBS in America and the penalty they should pay. No, this is about American taxpayers trying to fleece British taxpayers! And if the Americans don’t want to go along with this so called justified diplomacy to get RBS off the hook, what next? Call in the tanks? Really?

Leaving the American issues to one side for a moment, yesterday an article in Reuters, suggested Ross McEwan may have to admit the GRG division of the bank actually did do what many of us have been screaming from the roof top for years – it has been deliberately ruining SMEs and taking (stealing) their assets. Apparently the FCA have “got something” which is a bit of a game changer and the forthcoming report will expose this – or some of it. And this news has come out now because? In my opinion I’d say it’s because the bank is preparing us for an announcement in the near future along the lines of:

“we are shocked to discover that in certain instances the allegations made about the treatment of SMEs by the GRG division may potentially have some validity. As a result of the FCA investigation we now have enough evidence to show a small number of SMEs have indeed been poorly served by the bank and we will, of course, make enquiries into what happened in these cases with a view to contacting affected parties.”

Someone who spends a lot of time investigating what goes on in RBS told me a few days ago that, in the event all the outstanding issues RBS has with SMEs were to be addressed, the bill for proper compensation would be in the region of £40BN. Of course that’s not going to happen. If politicians are kicking off at the idea RBS have to pay the US £5BN, what are the chances this Government would allow the bank to pay UK SMEs eight times that? None. The Government may not have any full proof way to stop the US getting its money but they have all sorts of ways to make sure SMEs can’t get theirs. It’s a tall order for most SMEs to even get into a Court room to progress a claim let alone take on the bank’s mighty legal teams.

All the same, I know there are some very determined people out there and some big class actions in the pipe line. With such large losses looming, George Osborne must be worried about the share sale he is so determined to achieve. That’s without even considering the debate on whether or not he should be selling RBS in the first place. I know there’s many organisations and campaign groups who feel RBS should just be nationalised and then split up into smaller banks that would at least be of some use to society. I would agree except that we’ve already lost a fortune on this bank and nothing I have seen or heard in the past 6 months convinces me of anything other than the fact RBS is heading very fast into a brick wall.

Whether the bank is sold back into the commercial world or nationalised, the barrage of allegations and litigation heading its way is not going to stop. And some of the things coming have not even been mentioned yet – in fact I don’t even know if Ross McEwan is aware of what’s coming? I’m very sure the FCA doesn’t.

I suppose another option is if Jeremy Corbyn were to become Prime Minister – he might nationalise RBS, insist no shareholders got anything and no one could could litigate against the bank? But I can’t see that going down well with anyone and least of all the bankers who might then be asked to live on a normal wage.

So what should happen to RBS? Who knows? My husband thinks (and he even said it in a meeting at 10 Downing Street) the only way forward between the banks and the SME sector is a “truth and reconciliation” scenario. It would cost a lot for the banks to come clean and work out suitable compensation for the thousands of SMEs they’ve gratuitously ruined but, were such an agreement even vaguely possible, everyone, including the SMEs would have to take a reasonable and moderate approach. And the billions of pounds the banks would save on expensive lawyers, barrister and court fees would go a long way too righting wrongs, getting the SME sector back on it’s feet and re-establishing some trust.

#RBS to sell or not to sell – won’t make any difference to the fact this bank has backed itself, the Government and the Country into a corner. And no, Mr Rees-Mogg, the British embassy is not there to protect a British Bank from the consequences of its own misconduct. The tax payers didn’t ask for the opportunity to bail RBS out and become shareholders – it was a fait accompli. As such, one would have thought our own Government, regulator’s and justice system (not to mention UKFI) would have been keen to protect the public investment and stop our bankers behaving like bandits.

One last thing – Nick Gould and I had a great meeting this week at the Metro Bank with Peter Musumeci Jr, the right hand man of Vernon Hill. I’m not saying the Metro Bank is perfect and any SME owner could waltz in there tomorrow and get exactly what it wants. However, not only would I say the ethos of the Metro Bank is refreshingly different to our big banks, they also listen and wanted to know what are the key things the SME sector is looking for in a bank. Funnily enough, a lot of what we want is contained in the FCA Principle for Business, starting with principle 1. Integrity. Sadly integrity has been off the menu in some banks for so long I can only think some of our more illustrious bankers have forgotten what it means.

Photograph © Laura Maria Photography 2015

How much more contempt must society swallow from banks?

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Interesting few weeks – the election of course with the Conservatives winning a majority – who saw that one coming? And, in the process, the Tories appear to have demolished most of the other parties, not to mention some key names in politics. Of course the SNP helped the Tories enormously – the idea of Labour with the SNP running Westminster had a devastating effect. It’s almost as if we collectively had visions of bearded, kilted Scotsmen rampaging all over England intent on rape and pillage, when we still haven’t recovered from the suited and booted Scotsmen who ran the Government and some of the big banks – so that didn’t help poor Ed. And this just goes to show that while we pat ourselves on the back for being a liberal, accommodating, multi cultural society, the truth is we’re every bit as Nationalistic as Germany, France or Italy. And why not? What’s wrong with being fiercely protective of your Country? And while, in this instance, we conveniently forgot Scotland is part of Britain, I think many of us did reasonably feel that is a tenuous situation which a second referendum could change.

Anyway the Conservatives won and that was certainly a relief to big business who were apparently sure Ed Miliband was anti business. But I wonder if anyone in politics could make a difference to the whims and pleasures of major corporations now – and especially our financial sector?

One thing that has been made abundantly clear (again) in the last week with a US Judge handing out multi billion pounds fines to our big banks, is how much more powerful banks are than Governments. If I was trying to explain to an alien what’s been going on over the last twenty years in the ‘Incredible saga between banks and society’ I would say:

“From the late 90’s, bankers decided they could make more money and bigger bonuses by forgoing traditional banking and behaving recklessly, unethically and with gay, greedy abandon until this conduct nearly brought even the wealthiest of nations to their knees by 2008. So Governments bailed the banks out with the monies they collect in taxes to pay for essential services, even although this caused mass austerity for millions of ordinary people. But we never really got to the bottom of the reckless behaviour and we certainly didn’t blame anyone. So bankers realised very quickly they could carry on with that kind of behaviour and nothing much would happen.

Pardon? Yes we do have laws on this planet and yes bankers did break them but the leaders running the various countries on behalf of the people, decided it wouldn’t be a good idea to apply the laws to the bankers? Why – well apparently it’s complicated (or so we’re told) and, aside from anything else, we, the public, would have felt loath to trust a financial sector where some of the bosses turned out to be convicted felons.

Yes I know some of them may well be ‘criminals in pinstripe’ but that’s not the point. You can’t just go around calling people crooks if our justice system hasn’t confirmed it – so the trick is, don’t prosecute people and then no one can say they’ve done anything criminal.

What happened next? Well obviously, realising they had immunity from the law and could therefore do what the f*ck they liked with no personal consequence, the bankers dreamt up even more blatantly criminal scams to make money because – what did they have to lose? And when they (banks – not bankers) were found guilty of crimes, either their share holders or the tax payer (again) paid massive fines on behalf of the banks to the organisations set up to make sure banks did behave well and didn’t break any laws in the first place.

No I don’t know why these organisations didn’t police the banks properly. But I suppose if they had, they wouldn’t have been able to demand billions of pounds in fines at a later date.

What happened to the bosses running the banks? Well obviously they got huge bonuses even although they were overseeing criminal operations. And let’s be logical – the banks may have been fined billions of pounds but that’s a fraction of the profit they made while acting illegally. So you could say these bosses were doing a good job in terms of making money – which is all banks care about.

Yes, you’ve summed that up beautifully – the people bailed the banks out when they lost everyone’s money; then the banks carried on robbing the countries blind while paying their executives millions of pounds and finally; the public paid the fines for their criminal conduct. It’s a total Catch 22 as far as society is concerned.

I realise it makes no sense to you – it makes no sense to most people on the planet. Don’t we have a say in all this you ask? Well yes we do. We vote for the kind of leadership we think will be best for society and who will stop this kind of thing. So why doesn’t it stop? I don’t know. And yes, I’d say society is deeply offended our elected representatives have given bankers immunity from the laws of the land. Many of us are trying to do something about it. I have written many a letter to various leaders asking for a logical explanation to what’s going on http://www.ianfraser.org/dear-mr-cameron-if-bankers-are-above-the-law-we-need-an-urgent-explanation/

I haven’t had any replies – no doubt our leaders are very busy trying to work out how to balance the scales of a disappointed and furious populace on the one hand and the all powerful and Government empowered banks on the other hand. It can’t be easy forecasting which camp will do the most damage if not appeased. Especially if there’s not much you can do about the situation.

And no, I don’t know how much more contempt society can swallow before it all turns very nasty.

What, you’re off to find a more logical, ethical planet for your holiday? I don’t blame you. At least you managed to catch the Eurovision Song Contest while you were here. Do you know, that used to be considered one of the most bizarre, hilarious and illogical things on the planet? Now it seems like a welcome break in an even more bizarre reality.”

The Big Pink Elephants in the 2015 Election debate – ‘Law and Order’ – Justice.

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smeallianceposterYesterday we had a call from a farmer in Scotland. Like many of the farmers we know, he took out what was supposed to be a bridging loan with UK Acorn Finance and now, with the claimed debt doubling in 4 years, he’s about to be evicted. In this particular instance he is being asked to pay back almost twice what he borrowed and, having made a substantial offer to ameliorate the situation, he and his wife are still being evicted. Sadly in this instance, I’m not sure what my husband Paul can do to help. Over the years and on top of our own 22 repossession hearings, Paul has become a bit of an expert at staving off evictions. But the call we had yesterday was to help stop an eviction due to take place on Tuesday. And to make matters worse, it’s a Bank Holiday in Scotland tomorrow, so there’s no time to do anything.

That was the third call for help we’ve had in five days. And that’s over and above the cases Paul is working on anyway to keep people in their homes or farms and to help them get compensation from various bank related scenarios that have devastated their lives.

Add that to the number of cases the SME Alliance adviser panel, Jon Welsby, Andy Keats, Ray Baker, Mel Loades and Steve Middleton are working on – or the cases Bully Banks are working on as well as the many other support groups and you start to get the picture. Whether because of IRHP, EFG, so called business support units like GRG or HBOS Reading, or out and out asset and land theft by dodgy sub-prime lenders working with the big banks, which is happening all over the Country, the fact is economic crime has reached epidemic proportions.

And the reason for this? A complete break down in law and order.

If it wasn’t so tragic, you’d have to laugh. For example, consider the news last week that an intruder alert from premises in Hatton Garden – diamond and gold centre of London – went off but the police decided to take absolutely no notice of it! I know the police have a severe aversion to economic crime but burglary? Really? They don’t go after burglars now?

According to the blog in the following link, the police HAVE to investigate all crimes and can’t pick and choose but it also confirms they often do their best not to investigate crimes.
http://crimebodge.com/how-to-force-the-police-to-investigate-a-crime/

In my experience that’s very true and a fraud investigator from my local police force once told me the police couldn’t investigate my allegations of fraud against a major bank because the bank in question assured them there was no fraud. A different police force did investigate this fraud albeit three years later and they have since called it “the biggest bank fraud in British history.” Mind you, whether the people charged ever actually stand trial is a debatable point – not that the law should be debatable. But that’s another story.

The point of this blog is – over and above the bizarre case of police ignoring a robbery in the diamond district of Britain, white collar crime continues to cause mass austerity and destroy thousands of SMEs in this Country, but not one person in the recent #leadersdebate, mentioned ‘Law & Order’, ‘Justice’, ‘White Collar Crime’, ‘Bankers’, ‘Bank Reform’, ‘Access To Justice’ or ‘SMEs’. Except for the Welsh candidate, who did give small businesses in Wales a brief mention.

So, how could anyone have a serious debate and ignore the big pink elephants in the Country? How can SMEs on the one hand be called the back bone of the Country and on the other hand, just before an election, the Government puts Court costs up so the inequitable situation we already have, has now got even worse? At a time when so many SMEs in the UK are so desperate for a more level playing field to protect themselves against errant banks with deep pockets and huge legal teams, Chris Grayling and his team have decided to dig a bloody great big hole in the field! And in doing so he has confirmed, yet again, in so many cases involving banks or the financial sector, justice is only available to the highest bidder. And will any of the other parties redress this situation? Well who knows. Nothing in the debate gave us any clues?

Yesterday I filled in a survey I had been sent by a university on the subject of the 2015 Election and the leaders’ debate. It asked me, amongst other things, if the debate had helped me make a more informed choice about who to vote for? NO. It absolutely didn’t help me make an informed choice because many of the key issues ruining this Country, were simply ignored. Yes the future of the NHS is hugely important. Yes immigration is very important – although I’m not sure who will do the many low paid but very essential jobs in the NHS if we adopt Nigel Farage’s policies on immigration. But surely Justice and Law and Order, which includes stopping bankers raping the Country, should have been on the agenda?

The fact it wasn’t really does make you wonder who is running the Country? Who decided what questions would be asked in the leaders’ debate? More importantly, who decided what questions would be excluded? Did someone run the list of questions past Ross McEwan, and Antonio Horta Osorio?

And, in a democratic country, how can things like this happen:

“A bankrupt Lanarkshire businessman fears that a seven-year-long legal battle with banking giant RBS will continue despite a landmark court ruling in his favour.

Property developer Derek Carlyle’s dispute with RBS began in 2008 when the bank pulled out of a loan leaving his business – Carlyco Ltd – “in ruins”.
However, last month the legal process took a turn to Mr Carlyle’s advantage when the UK Supreme Court ruled that a judge’s 2010 decision – that the bank had broken their promise to him over the loan – had been the right one.
Mr Carlyle said this week: “The fair thing for the bank to do now would be to fully accept the decision of the UK Supreme Court, admit they were wrong and settle the matter of damages.
“However, that does not appear to be the RBS way in my experience, and I therefore expect to have to take them back to court to force them to pay up.”
http://www.dailyrecord.co.uk/news/local-news/rbs-bankrupt-lanarkshire-businessman-fears-5470583

Even when the Supreme Court rules a Bank, RBS, is in the wrong, it makes no difference. It’s as if the RBS executives think they’re in an episode of Kevin and Perry. “Yeh, so the Judge said we’re wrong. And? He is so unfair.”

What amazes me as much as anything, is the fact more MPs are not up in arms at the way some banks and bankers literally stick two fingers up to them and therefore to the democratic process. Occasionally some do show frustration and only recently Margaret Hodge on the Audit Committee was very obviously outraged with the answers she was getting from the “yes but my offshore account is all perfectly above board” and the “I can only look at the information I’m given at my £10k a day job” HSBC bosses. Similarly I’ve seen Andrew Tyrie at the TSC look extremely ‘miffed’ when talking to bankers. But what good does it do? Mr Tyrie may make the bankers squirm a bit but their seven figure salaries more than make up for a bit of ritual humiliation. And it’s not as if anyone has the power to stop what they’re doing. Or stop paying them handsomely to do more of the same. It seems whatever these top bankers do, good, bad, unethical or blatantly criminal, they face no penalty. How does that work? And what about party leaders? Have they considered the possibility that public perception is getting to the point where we are wondering if bankers have more power than elected representatives? And that’s across the board because Labour under both Blair and Brown were pretty keen on giving Knighthoods to the very bankers who brought the economy to its knees – and the coalition has shown itself to be equally fond of bankers.

So, going back to the forthcoming election, I’d be really grateful if any of the political parties would make it clear: where they stand on law and order; which party will focus on a more just society for all; which one of them will really cause serious reform in our major banks; which one of them will give the police and the SFO the resources they need to do their job properly; which of them will recognise the minimal access to justice SMEs have when trying to defend themselves against totally out of control rogue banks and; which party will realise how important SMEs are to the economy and give them the support they need? In short – who will lay these big pink elephants to rest?

As my good friend Nick Gould says – just asking.

Sadly I don’t think the answers, should anyone provide them, will do much good to the farmer and his family in Scotland who, it seems almost certain, will be evicted on Tuesday. Unless of course UK Acorn Finance decide they will, for once, do the right thing and accept the incredibly generous offer that’s been made to them? I hope so.

If – and I know it’s a big if – there is anyone reading this who could also help this family, please e-mail smealliance2014@gmail.com so I can pass on the details.

25 pointers on how to get a bank to take your complaint seriously – and how to keep going until they do.

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I found this document last night when I was trailing through old files. I wrote this back in June 2012 and decided it might be helpful to some people so I’ve given it a slight update. It’s an extract from a book I was writing called ‘A consumer guide to dealing with banks, bailiffs and other bullies.’ Maybe I will finish it one day.

June 2012 was a very tough time for Paul and I and our family because in April we’d been visited by a senior enforcement officer of the FSA (now FCA) who insisted we should tell Lloyds Banking Group what we wanted after all we’d been through (regarding matters related to HBOS Reading). He implied the Bank would finally compensate us and he said the FSA knew we were very entitled to compensation. But it didn’t happen. We wrote to the bank and they wrote back with the V sign – as in “vattene fanculo” which is a very rude colloquial Italian phrase to say get lost. So, after 5 years battling, we had 5 minutes of hope which was very quickly dashed. That’s why I wrote the document below – to help anyone else in the same boat and to stop similar disappointment.

Times have moved on a lot since then and where as a victim of financial crime used to struggle to expose what was happening, nowadays some of the big banks expose their crimes for us! Everyday the papers have a new banking scandal in them and the regulators, the Government and the public are all aware that some banks have a serious propensity to dishonesty.

Fortunately this blatant misbehaviour has meant bank culture has had to start changing (a tiny bit) and, better still, we have some new players in the market place like Metro Bank who are gaining popularity exactly because they don’t have a business model which sets out to mistreat its customers or SMEs.

All the same, many of us still have serious and unresolved issues with our banks and everyday I hear about more cases where people are really struggling to keep going or, in some cases, keep their sanity in the face of very unethical behaviour by banks. So I hope these pointers which are entirely my own thoughts after living through 7 years of outrageous treatment from HBOS and Lloyds Banking Group, will help anyone newly acquainted with bad banking practice!

  1. What you’re up against – the 3 D’s.

    Many bank’s rely on a policy of 3 D’s – deny, delay, dilute. When you first realise you’re up against multi billion pound corporation who is going to; deny everything you say; take months to reply to you; delay any resolution for years and; dilute your case by muddying the waters with legal technicalities, you will, quite naturally, feel despondent and impotent. That is the first hurdle to get over. Be aware this is what they are likely to do. Expect it. The quicker you do, the quicker you can get on with challenging their tactics.

  2. Do your research.

    Make sure you have your facts 100% right – not only about your case but also that you know exactly what you can really expect from your bank and what their obligations really are, as opposed to what you think you can expect. For example, a banks’ primary duty is to its shareholders and not to its customers. Also, however boring it is, read and reread every document you have from the bank. Then cross reference it with their code of conduct, the BBA code of conduct and the FSA Principles. Most of the codes are voluntary (FSMA rules are not) but even so, it helps to document in writing to the senior people at the bank exactly how many of the voluntary codes their bank has broken. It sounds complicated – it’s not that bad. And if you’re in it for the long haul, things like the FSA principles and FSMA 2000 will become regular reading to you. Although having said that, almost every example of malpractice can be shot down with Principle 1 of the FSA Principles: “A Firm must conduct its business with integrity.”

  3. Make a complaint in writing to the banks internal complaints department.

    Very often a waste of time and you will almost certainly get a negative reply but, if you don’t go through this process, everyone, including the regulators will have an excuse not to look at your complaint until you have.

  1. Write politely but firmly to senior executives of the bank, the CEO and the Chairman.

    If you are sending your correspondence electronically, always ask for a read receipt and if you’re sending by post, ask for an acknowledgement of receipt as well as a rely. You might also consider sending correspondence by registered post. The fact you can confirm they definitely received your correspondence can be very helpful later as they cannot deny someone knows what the content was. Also, make the point in your letter or e-mail, over and above the fact you would like the Board or the executives to deal with your complaint, you are writing because you want to be sure your complaint or allegation is on the record at the most senior level of the bank. Finally, be sure to keep any reply in a secure place – there is little as helpful as the banks own words over a period of time. Even if most replies you get say they have already dealt with your complaint and “we do not intend to correspond further” that can still be helpful. I have a pile of such replies – which all look rather silly and lacking in integrity (FSA Principle 1) now 10 people are being prosecuted with criminal charges in the HBOS Reading case.

  2. What to expect or not expect from the regulators. FSA (FCA) and FOS

    In the case of an individual complaint, the FSA (now FCA) http://www.fca.org.uk/ will almost certainly send a reply telling you they do not deal with individual cases. Nevertheless, send a very detailed explanation of your complaint to the FCA – as it may end up as a systemic issue which they later have to deal with. When sending your complaint to the FOS http://www.financial-ombudsman.org.uk/ , be aware they are limited as to the compensation they can award (£150k) even if they do find for you. So an SME for example, which may have lost considerably more, cannot get a resolution through the FOS. All the same, it’s another box ticking exercise and I would advise you to tick them both.

  1. Document everything.

    Very important. Take notes on every conversation you have with people in the bank, the regulators, your MP and, if applicable, the police. If you have conversations with people who are giving you information or evidence relating to your case, send them your notes of the conversation and ask them to verify that you have your facts correct. Keep all your notes and correspondence safe and in order – you may need to refer to them years later and it’s not helpful to find you’ve destroyed or lost potentially critical evidence. This has been one of our best tools. People contradict themselves all the time and very often they completely forget they’ve said black is white and say it’s pink. We know what people said about HBOS Reading back in 2007/2008 because we wrote it down. Many of them don’t remember.

  1. If your complaint involves fraud or the possibility of criminal actions, try to identify other potential victims.

    Get in contact with them and pool your information. Then give your collective information to your MPs, the regulators, the police and authorities like the Treasury Select Committee. If you try and give your information individually, most of the authorities will tell you they cannot look at individual cases. It’s much harder for them to ignore you when you have evidence of many similar fact cases.

  1. Collect evidence and case law that will help you.

    If you do identify similar cases (even if they are not directly related to your case) collect case evidence and case law because, should you have to resort to the civil courts, which is a dangerous route, the bank will rely heavily on case law that’s beneficial to them and legal technicalities that may confuse you and manipulate the court. You may not be a lawyer (although you can still research case law yourself in Bailii http://www.bailii.org/) but if you can collect evidence from other victims of similar cases, it can help your case. And even if some judges (and certainly the banks barristers) will refuse to consider it on the grounds it is irrelevant to your case, it will still go on the record and in the transcript. So it’s worth saying out loud e.g “I have here 10 examples of similar practice from this bank supplied by other victims.” Almost certainly not court protocol but then neither is it court protocol to deliberately mislead a judge – and I have seen HBOS legal teams do this repeatedly.

  2. If you get to the stage where your MP is involved, copy him or her in on all your letters to the bank and the replies you get.

    Some MPs are real champions of the underdog but unfortunately, not all of them are happy to get involved with financial disputes against big banks. But if you are suffering from a genuine injustice, your MP has a duty to assist you http://www.ukpolitical.info/YouandyourMP.htm . So don’t ever let them make you feel you are a nuisance. And if they do, I suggest you copy every letter to and from your MP to third parties like the regulators or, if you feel you are being particularly badly treated, to the Prime Minister.

  1. Use the many tools available on the internet to collect additional evidence

    You can get details of companies and directorships on Companies House http://wck2.companieshouse.gov.uk//wcframe?name=accessCompanyInfo which can be very helpful but it does cost £1.00 per document and, in the case of a very big fraud, you may end up needing hundreds of documents you simply can’t afford. There are other sites that can give you the same equally valuable information, especially with regard to directorships, which, while they charge an annual fee, can work out cheaper. The best one we found back in 2011/12 was Creditsafe http://www2.creditsafeuk.com/ . But now you can get most of the information you need free from Dellam http://www.dellam.com/cgi-bin/main.pl or better still Duedil https://www.duedil.com/ You will still have to pay for company accounts etc but you will be able to see directorships, shareholders and debentures. If you’re prepared to put in the time going through the information on (e.g) Duedil, the paper trail you uncover can help show you the bigger picture.

  1. If you believe and have proof someone in the bank has committed an illegal act, report it immediately to your local police or to the fraud squad.

    In many cases the police will tell you your complaint or your allegations are a civil matter – we were told that in the HBOS Reading case where the Cambridge police would not investigate our allegations simply because the bank told them there was nothing to investigate. Stand your ground. Don’t take no for an answer. Write to the police giving a clear statement of the crime you believe has been committed and listing the evidence you have to support it. Copy your letter to your MP and the FSA. Ask for a crime number and remind the police they have sworn an oath to “… prevent all offences against people and property” http://srchtag.com/ex/vfc2nonclymg2yi.html .

  1. Dig in and adapt your living standards to suit your circumstances until you reach a resolution.

    It could take years to finally get a resolution or compensation from a bank and many banks believe their policy of ‘delay, deny, dilute’ will cause many complaints or allegations to simply disappear – which they do. People get old, get ill, cannot bear the stress, simply give up or in some cases they die. It’s an effective and immoral way for banks to minimise the cases against them. If you want to win, you need to have the right mind set and you must learn to live without things you are used to having and also learn to appreciate some things you have taken for granted. Make the most of every positive in your life however tiny. It’s the small positives which can keep you going in times of immense stress and even a bank can’t take them from you.

  1. Try and keep on top of everyday bills that could potentially cause you massive problems.

    If you find yourself running out of money because of what your bank has done (common problem) you still have to stay on top of daily issues or you will end up being the one in Court! One such example is Council tax. Make sure your local council know about your reduced circumstances and that they reduce your council tax accordingly. If you don’t, you could find bailiffs on your doorstep. Where you know you will have problems paying your creditors, try to keep them informed about what is happening. People can be amazingly accommodating, considerate and supportive, if they know you are suffering real injustice. Similarly, they can be very aggressive if they don’t know what you are going through and feel you are merely trying to take advantage of them.

    In the really unfortunate event your debts escalate to the point of bailiffs attending your property (which is so offensive to when you have to struggle so hard to get authorities to take action against financial crime) it’s really important you know your rights because some bailiffs will unfortunately misrepresent them to gain access to your home: http://www.advicenow.org.uk/advicenow-guides/consumer-and-money-problems/dealing-with-bailiffs/if-bailiffs-knock-on-your-door-html,620,FP.html Worse still, if for any reason (including the consequences of bank malpractice) your lender or land lord threatens to evict you, you must also know your rights. http://england.shelter.org.uk/get_advice/eviction

  1. Contact your local press and give them the details of your case but be wary of approaching the national press unless you can forge a positive relationship with the journalists.

    Try and get your local press to cover your story. Give them regular updates and include issues of human interest especially if, as in our case, your situation with the bank results in eviction hearings or Court proceedings. But be very wary of approaching the national press.Good investigative journalists are few and far between whereas advertising budgets supported by banks and corporate bodies are ever more desirable to an industry that is plagued by modern technology which increasingly reduces its budgets. We know to our cost that some journalists who have had chapter and verse on the HBOS Reading story have gone on to write stories that were completely incorrect as to fact and have gone out of their way to make the victims look like the fraudsters.Having said that, we have also been lucky enough to come across some exceptional journalists who have been enormously supportive and fortunately, I would say now, in 2015 we are getting to the stage where more journalists are aware you are likely to be telling the truth about bank malpractice. All the same, when considering the main stream press, its a good idea to check out who is on the Board (past and present directors or non executive directors) of newspapers.

  1. Set up a blog site and put the details of your case and your allegations on it.

    Invite people with similar situations to get in contact with you. Be very careful however, not to publish your allegations or to defame people unless you are 101% sure you are right. While you cannot be accused of defamatory behaviour if what you publish is based on irrefutable proof, banks and individuals in banks or financial institutions, may well have legal teams capable of highlighting even the most minor flaw in your argument  that is capable of challenge. So be very careful what you write. Down the road, the bank or its lawyers could take your words and make them your worst enemy.

  2. Use social media to your advantage.

    One thing banks (or even Governments) didn’t factor in after the credit crunch was the phenomenal rise of social media. Use it to your maximum advantage. Get google alerts for the bank you’re complaining about; tweet the articles; look at the people who re-tweet you or who tweet on similar subjects. Add them to your followers on twitter or Facebook. Share information with them. Social media is maybe the most useful tools you have so make the most of it.

  1. Be very tolerant of your family or people who are living in stressful circumstances because of the situation the bank has put you in.

    If ever there is a time you will need your family, it’s when you are fighting a major battle with a bank or corporation with no morals and deep pockets. Even family turmoil is to their advantage as it will stop you focusing on the real battle and cause you immense distress. It’s easy to play the blame game and for families to be at each others throats when every thing goes wrong and you are all stressed. Don’t give banks that pleasure. Close ranks – stick together and think of your family as your army and your support. Sadly, if your battle goes on for years, you may find you lose a few friends along the way because people will get sick of hearing you repeatedly talking about your case. Also, you may no longer be able to afford to do the things you used to do with your friends (restaurants, holidays etc) so you may just drift apart. Even more reason to be very tolerant of your family. They can’t walk away and they are probably living through the nightmare with you.

  2. Don’t be arrogant – leave that to your opponents.

    Anger, outrage or encouragement and support from friends or family can sometimes make you feel you can publicise every tiny breakthrough as a major victory. Don’t go there. You won’t feel so arrogant when two years down the road you’re still struggling and the bank executives are still coining in the millions. It’s tough I know, but leave the arrogance to your opponents. If possible, encourage them to be arrogant in writing or better still to tell blatant lies in writing. Keep your powder dry and your day will come. Also, regardless of how angry you are, try to be dignified and professional in your dealings with the bank (even when they’re not). Banks love it when people come across as highly emotional and slightly erratic. We know of several very good cases where victims have been their own worst enemies and especially in court rooms where judges have little tolerance for unprofessional or aggressive behaviour. It gives credence to the idea you may be unreliable.

  1. Be wary of false promises or men baring gifts.

    Don’t think, because the bank, or the bank’s lawyers, or a regulator or anyone else gives the impression they are suddenly sympathetic to your cause, that you can afford to drop your guard. Nothing is over until it’s over but banks will try to placate you, albeit temporarily, if they have other pressing situations going on which you could, if you were aware of them, make worse. They tend to blow hot and cold according to their own situations but at the end of the day, the protection of their brand and the protection of those people highest up in the chain, is their primary interest. Contrary to what their code of conduct says, some banks are not at all interested in their clients – unless those clients either owe them billions of pounds or can implicate their senior executives in shady dealings.

  2. Be very wary of taking the legal route.

    One thing banks definitely have in their favour is their ability to pay vast sums of (shareholders) money for good legal brains. You, on the other hand, because of your circumstances and unless you go into battle as a multi millionaire (in which instance a bank would almost certainly give you more millions rather than challenge your allegations against them), will possibly be a litigant in person. So going to court against a bank is like being thrown into the lion’s den. Even if you can find a law firm to represent you on a CFA basis (conditional fee agreement) you will always play second fiddle to their paying clients and you really really need to be very careful when choosing your lawyers. Yes, there are good ones out there – but legal firms are not charitable organisations. If you run out of money, many of them run out of advice or sympathy simply because they are also businesses and need to pay their staff. Your catastrophe is yours, not theirs. So don’t expect morality to come into it because in most cases – it’s just business.

    Equally worrying is the new game on the block whereby third party funders will take your case forward because they can see you have a valid case which might bring about lucrative results – but buyer beware, by the time you have paid your legal fees and your third party funders, you could find yourself in a Jaundyce and Jaundyce situation – you fight for years and get nothing. This is why banks love the playing field of the court room. Even without the disturbing proposition that justice is very often in need of Spec Savers these days and some Judges seem ill advised if not illogical, banks know that the Court room is, in general, their play ground not yours – unless it is a criminal trial, But even then you must be wary.

    Having said that, we have won most of our 22 eviction hearings as litigants in person and in some of them we were up against the Vice Chairman of a huge London law firm as well as the banks barristers. So it can be done and we still have our home but we did have the advantage of bundles of evidence we had collected about events originating at HBOS Reading. Not many judges wanted to evict us until that was resolved – although one did.

  1. If you feel yourself becoming seriously depressed, get treatment.

    Remember that depression is a common complaint for whistle blowers or anyone taking on a bank or corporate. This is a subject I’ve heard discussed at length by well known whistle blowers and victims of Corporate fraud and I know many people who have suffered terribly from depression. There is no stigma to falling into depression when a bank has ruined your life – it’s actually very normal. So if you feel yourself going down that route, get help asap (and while we still have the NHS) http://www.depressionuk.org/national_links.shtml and, if you do have treatment, make sure the bank, your MP, your local council, your creditors and any regulators you are writing to, are aware of that treatment and why you are having it.

  1. Don’t give yourself time scales.

    The fact you have conclusive evidence of negligence, misrepresentation of even fraud, means surprisingly little to some banks. Whatever happens to you will not, sadly, stop the senior exec’s, getting their mega pay and bonuses. Therefore, they have no interest or concept of what you are going through but they do know, the longer you go though it, the more likely it is you will give up. However confident you are, never tell yourself this will be over in 3 months, 6 months, a year. We did and here we are 7 years later still going through it. Just keep going. If you are in the right and if you are resilient, then one day it will be over but only when you have worn the bank down as much as they’ve worn you down – or, if you’re really lucky, the authorities will make the bank resolve matters. That can take a while and you will only disappoint yourself and your family if you try to predict that time scale.

  2. Remind yourself on a daily basis that, whatever the bank says, you can win if you don’t give up.

    Most banks don’t have moral stamina, they just have money and lawyers and they change their lawyers as often as you change your socks. They also change their management, their policies and even their CEO’s on a regular basis. Sooner or later and if you are persistent, you may even come across a CEO who has heard of damage management. You never know and neither do I but it could happen and we live in hope?

  3. Weigh up your options.

    Really taking on a bank can take years out of your life which I know to my cost. Even if you win in the end and get some or all of the compensation you want, no one can give you those years back. In the case of Paul and I, we had no choice. The bank destroyed our business and, when we exposed the corruption behind this, they also tried to take our home. We had no option but to keep fighting. Neither would we give in to supposed resolutions that were, in effect, no more than bank housekeeping and of no advantage to us or any other victim of HBOS Reading. So we have kept fighting. That was our decision and one that we and our family have paid heavily for but which we wouldn’t change. We have been defrauded – we are in the right and we will never give up until we have won; or reached a consensual agreement; or, in the event that never happens, have fully exposed every detail of HBOS Reading that we have uncovered. That’s our choice but, for anyone starting out on such a battle, I would say, if you can, mediate, mediate, mediate. You may not get everything you want but never, ever feel guilty for compromising and for not taking our path if there’s a path that gives you and your family a resolution you can live with. You’ve only got the one life and it’s not everyone’s cup of tea to spend years fighting mega wealthy and corrupt organisations.

  4. But if you are determined to win the fight be aware you really are involved in a David v Goliath battle and Goliath is a huge, mean and unprincipled giant!

    So on your darkest days, just remember, “the man who wins is the man who thinks he can.” Tell yourself that over and over everyday and you will win.

If these pointer help even one person, then it has been worth publishing them. I really hope they do!

©Nikki Turner 2015

If you don’t identify the crimes or the criminals, you don’t have to support the victims.

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There was an interesting article in the Guardian today on the subject of Lady Newlove’s report into the lack of support for victims of crime. http://www.theguardian.com/uk-news/2015/jan/27/victims-crime-let-down-criminal-justice-newlove I agree with her entirely – there is very little support. Equally interesting was the comments below the article.

For example, someone posted we are all more likely to be victims of financial crime than being mugged in the street. I would agree because PPI, IRHP, LIBOR rigging, asset theft (GRG) and various other fraudulent schemes, all have their victims – not that I am in anyway decrying the horrific consequences of violent crime.

However, there is a huge problem when it comes to financial crime. First and foremost, it is rarely classified as crime. It has various bogus titles and the most common is mis-selling. Also, financial crime is a political animal and as such, it seems to feel it is reasonable it should fall outside of the boundaries of common law. It shouldn’t do but it does. This is probably because any major case exposing the horrendous corruption in our financial system would have far reaching political and economic consequences. Not only would it risk serious ‘Brand protection’ to financial institutions, it would also damage UKPLC. Therefore even if you report serious and fully substantiated financial fraud to the police, you are unlikely to get an investigation – so you are unlikely to get a result.

Anyone challenging this view should consider why, when Banks are found guilty of money laundering for drug cartels, or of rigging LIBOR (which affects everyone), or of selling fraudulent products to consumers and SMEs, the answer is invariably a huge fine paid by the Bank shareholders? But no one goes to jail.

Occasionally and if you are incredibly persistent, the police will open an investigation into specific crimes by bankers or their associates in the financial system and, I can say from experience, that despite the initial euphoria victims may feel when this happens, what follows is a long drawn out process which gives little or no consideration to victims or to the consequences of those crimes. And while I adhere to the theory of “every man is innocent until proven guilty,” a justice system which takes years and years to bring cases to trial means that some victims, suffering badly from the effects of a crime, will have their lives on hold for an indefinite period. Some die before they ever see justice and that is a fact. “Justice delayed is justice denied.”(See below)

Take for example the case (which I won’t name for reasons of sub judice) where some 80 SMEs were first defrauded and then destroyed by employees and associates of a High Street bank. This was first exposed by the victims in 2007 but the police refused to investigate because the bank concerned assured them there was nothing to investigate. However, in 2010 and under the radar, a different police force did start an investigation. By the end of 2010 several people had been arrested but no one was charged until 2013. The trials for those people charged with assorted serious crimes were due to start in January this year but have now been put back to September and will finish in 2016 – if they happen at all. 2007 to 2016 is a long time to wait for justice. Three people have died while waiting.

The victims have lost their businesses, therefore their livelihoods and in many cases their family homes. They are all due compensation – but that won’t happen until after the trials as the management of the bank concerned are adamant no crime was committed (even although the Bank was the biggest loser of all) and the police have spent a fortune of public money on a witch hunt.

In the meantime there is little communication between the police and the victims except for the odd brief e-mail. The victims are dissuaded and even threatened not to attend any case management hearings – so they don’t know how the case is progressing (or not in this case) and if ‘victim support’ are aware of this crime, they haven’t acknowledged it. I know most of the victims – I don’t know any who have had any support.

The defendants on the other hand, are kept fully briefed by their legal teams (some of whom are paid for by legal aid), they continue to work or trade their businesses (which haven’t been destroyed) and some have requested and been given their passports back as and when they want to go on holiday abroad. Fair enough, they have not been found guilty as yet.

My point – most people in this Country are asking (quite reasonably) why bankers, who have already been found guilty of various crimes for which their shareholders have been penalised, have not been charged or gone to jail? I would say it is because the majority of the really serious crimes had to have happened with at least the knowledge and possibly the authorisation of those at the top of the Banks – not to mention key figures in associated ‘professional’ firms. But if Governments (via the justice system) start admitting our banks have been and are being run by criminals, it would destabilise our much loved financial system. So, even where a case does slip through the radar and bankers are charged with crimes, the main consideration seems to be how the authorities can limit contagion and, if possible, stop these trials actually going to Court. A valiant attempt was made to stop Operation Cotton and therefore other big financial fraud and VHCC (very high cost cases) from proceeding, via the legal aid débâcle. Fortunately it wasn’t successful.

And the victims? Well, better a few victims fall by the wayside than we tarnish the City of London. But actually it’s not a ‘few victims’ because we are all victims of financial crime and we are all paying the price (national austerity) while the charade goes on. And what a charade it is – after all that has happened and after banks brought world economies to their knees, top bankers demand and still get millions of pounds a year. And once a year they head off to Davos with the great and the good, to decide our economic future for the following 12 months. It’s not just illogical and unethical – it’s bonkers.

Great to see Lady Newlove has written a report and identified the lack of support for victims but, in the case of financial crime, which has reached epidemic proportions in the UK, the biggest hurdle to our justice system is a refusal to identify the criminals. Cost effective and sneaky but not democratic.

  • On the subject of “justice delayed is justice denied” and while I was looking for the origins of that quote, I randomly came across an extraordinary dark example of how this statement is sometimes abused by the very authorities we rely on for justice. The case is nothing to do with financial crime and the victim in the case is the accused. And this highlights yet again how important it is to democracy that justice is seen to be done and in a timely manner. I would say in too many cases, it isn’t. http://www.innocent.org.uk/cases/Karl%20Watson%20-%20Woffinden%20art.pdf