Tag Archives: fraud

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

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were forced to use the services of a consultancy firm, Quayside Corporate Services (QS), or have their facilities withdrawn.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.
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25 pointers on how to get a bank to take your complaint seriously – and how to keep going until they do.

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

Did the Bank Wreck My Business? Yes – so what happens now?

Did the Bank Wreck My Business? Yes – so what happens now?

I’m pretty sure the ratings for the excellent Panorama programme, ‘Did The Bank Wreck My Business’, were very high last Monday. Certainly most people I know watched it – but then many of them have direct experience of banking abuse at the hands of RBS or Lloyds – so they would. In fact most of them were interviewed by Andy Verity and Jon Coffey although their stories weren’t used in the programme. Some would say (and I would agree) there are many more horrific stories out there that the production team could have used – but it’s not a competition. Every business annihilated by bank misconduct (known to many as fraud), is a tragedy. And, given the Beeb’s generally conservative, establishment stance, I think it’s nothing short of a miracle this programme was as frank and exposing as it was.

As always, when programmes like this are on, I took some notes. I do it mostly to collect quotes for my book (nothing quite like “from the horses mouth”quotes to make points) but I also do it because I’m so staggered at what some people in the banking world say, it has to be captured in black and white for posterity. One day future generations will surely look back and ask “how the hell (being polite there) did a democratic country let that happen?”

I know the transcript of the programme will be available soon (or I hope it will) but here’s some of my favourite quotes from last night:

Jon Pain (RBS) “The whole purpose of GRG is to help customers return to financial health…..”

Vince Cable (BIS) “Well of course I’m very alarmed because good companies appear to have been put at risk or in some cases destroyed by banks behaviour…..”

Stephen Pegge (Lloyds) “our goal is to support businesses (you know) small and medium sized businesses are really important to us….”

Jon Pain (RBS) “(But) I would in no shape or form condone any inappropriate behaviour by anybody acting on behalf of RBS – that’s not part of our agenda in supporting customers.”

Christ Sullivan (RBS) to Andrew Tyrie re GRG “It is absolutely not a profit centre!”

Ross Finch (Lloyds victims) re his meeting with an exec of Cerberus who Lloyds sold his loan to “When I expressed disbelief about their behaviour, um, he said, “what you’ve got to understand is I am a prick” – which I couldn’t believe he would say such a thing!”

I’ve just pulled out those quotes because they are either so absurd or so shocking– and they’ve been broadcast on the BBC, the bastion of British correctness. If even the Beeb is exposing RBS and Lloyds as a bunch of crooks, what can we say? Nine years on from the so called Credit Crunch and where are we? I would say, if anything, we’re walking backwards. As one of the founder members of SME Alliance and a member of Whistleblowers UK ( Paul and I blew the whistle on HBOS Reading – the HBOS equivalent of GRG), I hear horror stories about banks v SMEs every single day. But the exposure of banking atrocities is no longer limited to what banks like to portray as ‘the niche market of poorly performing SMEs’. Everyone knows how bad some of our banks are and Andy Verity’s programme should be one of the final nails in the coffin of bad banking.

But will it be? Big question:

Vince Cable, Andrew Tyrie, the Treasury Select Committee, the FCA, the PRA, Mark Carney, David Cameron, Ed Miliband, Nick Clegg – did you watch “Did The Bank Wreck My Business’? And if you did – what are you going to do about it? They certainly didn’t wreck your businesses so I understand that maybe you don’t understand the consequences of what banks do. However, I do and so do thousands of SME owners, employee’s, shareholders and creditors. We live with the consequences.

I also know Andy Verity and Jon Coffey have done extensive research to make this programme and could have used any number of totally outrageous cases because they interviewed loads of SME owners (or ex SME owners) – and I know some of those stories may have been a step too far for the Beeb. In my own case sub judice was a big problem. But I know they made the programme in the spirit of stopping banks abusing SMEs. So has it worked? Has it helped? Will anything change?

Well the Panorama team have done their bit. David, Ed, Nick, Andrew, Mark – over to you. You are the people who can make the banks behave – or at least you should be. If the reality is you’re not – then wow, we have a serious problem in our democracy.

Best quote of the programme, without doubt, has to be Austin Mitchell MP, talking in Parliament about the Keith Ross case and saying it how it really is:

“What I want to do today is tell the story of the theft of a profitable Yorkshire company and I don’t mean the criminal Mafia we often speak of I mean Britain’s dark suited Mafia which in this case is represented by Lloyd Bank and Price Waterhouse Cooper both acting in collusion….”

Here’s the link from Hansard to Keith Elliot’s case: http://www.theyworkforyou.com/whall/?id=2013-11-12a.212.0

Of course, living in Italy for nearly 20 years, Austin’s comments would strike a chord with me. Well said Austin – there’s not many MP’s who would draw Parliament’s attention to the similarities between the banks and the Mafia but I would just put you straight on one thing – our dark suited Mafiosi are, in many cases, criminal.

I’m posting this on my own blog site because this is my own view – but I believe many people in SME Alliance will appreciate this view and I have to give us a plug because the conduct exposed in the programme is one of the reasons SME Alliance was formed.

#SME Alliance – giving SMEs a voice. #nooneisabovethelaw