After banker bonuses and then the banks mis-selling Payment Protection Insurance comes another revelation.
The latest sharp practice of the money hungry banks takes the form of selling small and medium sized companies (SME) a derivative based product with their loan that is meant to protect the SME against interest rate changes.
But, according to the Telegraph, this actually left the SMEs concerned massively out of pocket whilst lining bankers’ pockets with commissions.
But now let’s see what one of the banks concerned, Barclays, did when customers complained to it about these products.
According to the Telegraph report two companies, Guardian Homes West as well as its sister companies Graiseley properties and Graiseley Investments, took out these interest rate swaps and they subsequently lost a lot of money. They complained to Barclays who agreed to restructure the loans concerned but, get this, the companies had to sign a contract that prevented them from talking to the Financial Services Authority (the regulator) as part of the deal.
The clause concerned said: “The parties will keep the contents of this letter confidential and not disclose its contents to any third parties, including the Financial Services Authority [save as required to by law] without the prior written consent of the other party.”
Talk about tying peoples’ hands!
The FSA immediately responded and said “It is unacceptable for any firm to try to prevent its customers from speaking to the FSA,” the spokesman said. Following the information The Telegraph provided we have taken this up with the firm concerned and it has apologised and agreed to write to all the customers affected.”
When are we going to see punitive action taken? The banks will try anything to get an immediate cash fix for bonuses hoping they won’t get caught out. And if they do get caught they apologise, make redress to as few people as possible and move on to the next scam they’ve already been preparing.
Until some of these people see the inside of a jail cell nothing will change! So the next time you go into a bank just be aware these people view you as nothing more than commission generators.