The APPG on Fair Business Banking has for years been leading the call for an independent, judicial dispute resolution system between businesses and banks. Over the last 18 months we have managed to secure agreement that this gap needs to be filled. What is required is a robust and independent body that can serve the needs of our business community, not the cheap political win that some are promoting. We are delighted to have secured a debate in the main chamber on 30 November on creating an accessible, independent and transparent process to fillet out genuine claims and settle them fairly is essential to restore confidence in UK banks lending to SMEs – a sector that most believe is the seedbed of UK’s future prosperity. This is not a difficult ask. Legislation exists to enable the rapid establishment of a tribunal system, the only thing we need is the political will to enact it. It is time that the Government, FCA and Parliament step up to the plate to ensure that businesses get fair treatment and access to affordable justice. This has been a matter left too long to drift in the regulatory and legislative wilderness, and the consequences have been catastrophic not only to individual lives, but to confidence in our entire financial system. Happily, there is a growing recognition among legislators and regulators that such a change must come, and we are delighted that the FCA has taken this on board. Our focus now must be on ensuring that the system set up is robust, inquisitorial and has the necessary teeth to deal with complex financial disputes. Lord Cromwell said: “There is a dangerous temptation for politicians to be persuaded to take the easy way out and expand the remit of the FOS. This is a good service but simply not equipped or appropriate to tackle the sort of cases envisaged.” “Once established, this tribunal system will help to ensure – through transparency and greater equality of arms – that banking, which is a vital sector of the UK’s national economy and international reputation, works better – not just in the interests of its customers but of the banking industry itself” Vice-chair Norman Lamb MP said: “It is essential that a robust dispute resolution scheme is put in place. Anyone working in a bank, however high up in the organisation they are, who are tempted to treat customers badly, must know that there will be serious consequences. Businesses must know that they are protected against arbitrary or inappropriate behaviour by the banks.” Kevin Hollinrake, Vice-chair said: “Business lending is clearly vital to the health of our economy but it is also absolutely critical that borrowers have confidence that the terms and conditions are fair and that lenders are well regulated, accountable to a truly independent body and that there is an effective, easily accessible dispute resolution system should things go wrong. It is not just the money and businesses that have been lost, it is also the desperate human cost when someone’s life’s work is taken from them by faceless, uncaring and unaccountable financial institutions that are not only too big to fail but also too wealthy to sue.”
We are delighted to confirm that the APPG has been granted a debate in the Chamber on 30 November in the morning, directly after questions.
The motion for the debate is designed to address the systemic failure to protect businesses, and to call for the establishment of a tribunal system to deal with the disputes that have arisen as a result.
SME Alliance was set up for SME owners and collaborators to actively help resolve some the problems SMEs have to deal with. It makes sense that the people running SMEs would be the people on the front line of promoting change and resolution. So now we are.
The factoring industry continues to put two fingers up at regulation
10/31/2017 01:09 PM
Do not forget the corrupt factoring industry
If you have been affected by mis-treatment from Banks (RBS GRG, HBoS Reading and other so called business support units) Please send the notice from th APPG On Fair Business Banking below to your MP and ask them to support this motion by contacting Heather Buchanan by 12pm tomorrow!
That this House is appalled at the conduct that has recently been exposed concerning the treatment of small and medium-sized enterprises (SMEs) by the Global Restructuring Group (GRG) unit of the Royal Bank of Scotland (RBS); notes that there are wider allegations of malpractice in financial services and related industries; believes that this indicates a systemic failure to effectively protect businesses, which has resulted in financial scandals costing tens of billions of pounds; believes that the solution requires the collective and collaborative effort of regulators, parliament and government; and calls for an independent inquiry into practices in respect of the treatment of SMEs and the protections afforded them, and the rapid establishment of a tribunal system to effectively deal with financial disputes for businesses.
James Hurley Published at 12:01AM, June 23 2014 Lenders that provide £18 billion to small businesses have been told to “clean up their act” or face tighter controls amid claims about controversial fees and abuses of insolvency. The unregulated asset-based finance industry, which lends to more than 40,000 businesses in Britain and Ireland, is facing increased scrutiny. Insolvency experts and a campaign group allege that some independent lenders secretly try to sign up businesses likely to go bust, or even that they engineer the insolvency of their clients, in order to profit from their collapse at the expense of the taxpayer and other creditors The sector’s trade body, the Asset Based Finance Association (ABFA), launched a new approach to self-regulation last year to tackle perceived problems. However, MPs have told the group that further “fundamental” reform is required if formal regulation is to be avoided. ABFA’s members lend to small businesses against their assets, typically advancing money against invoices by taking security over companies’ debtor books. The sector is being looked at as part of a Treasury Select Committee inquiry into lending after complaints from small companies that they have nowhere to turn if something goes wrong with their loan. There is also concern that so-called “termination fees” for clients that enter administration are being abused. These fees are ostensibly to cover the risk of a client leaving before the end of their contract but are charged when a client goes bust, often when the lender appoints an administrator. The fees can dwarf the total amount lent. Geoff Swire, an insolvency expert, has compiled data for The Times which indicates that in the first five months of 2014, more than 10 per cent of administrations involving asset-based financiers saw businesses going into administration less than 60 days after they first agreed to work with a lender. Contracts tend to last at least a year. ABFA produced a new code of conduct and dispute resolution service last year, but MPs are worried that the industry is not doing enough to tackle the abuse of termination fees, and that since ABFA is a voluntary membership organisation, not all of the industry is covered by the code. ABFA says it is limited in how proscriptive it can be over the use of termination fees by competition law. Andrew Tyrie, the Treasury Select Committee chairman, said: “Quite a lot of movement is needed or [this is] going to be one of those cases where self- regulation hasn’t worked”. ABFA said: “We will consider any recommendations made by the committee very carefully.” Brooks Newmark, Conservative MP for Braintree, said that while he accepted that most of the industry was reputable, a small group of rogue lenders was “poisoning the well”. “If ABFA and its members do not clean up their act . . . I will be calling for much tougher regulation from the outside. [The industry] has got to deal with the incredibly bad practices destroying some perfectly healthy businesses.” The ABFA spokesman added: “We are pleased that the Committee recognises the important contribution the industry makes to the UK economy and the excellent practice that is the norm. It is in the interests of the industry to address instances where standards have not been met.” Brian Moore, the chairman of the Campaign for Regulation of Asset Based Lending, said: “We want small businesses to be able to use asset-based lending with confidence. That won’t happen while the industry remains unregulated and while small companies have nowhere to turn when powerful lenders take advantage of them and their creditors.” http://www.thetimes.co.uk/tto/business/industries/banking/article4126960.ece
02/23/2017 08:49 AM
Asset Based Lending Fraud Asset Based Lending fraud is the use of potentially illegal means to obtain money, assets, or other property owned or held by a financial institution, or to obtain money from depositors by fraudulently posing as a bank or other financial institution. In many instances, bank fraud is a criminal offence. While the specific elements of particular banking fraud laws vary depending on jurisdictions, the term bank fraud applies to actions that employ a scheme or artifice, as opposed to bank robbery or theft. For this reason, bank fraud is sometimes considered a white-collar crime.
02/21/2017 08:51 AM
Financial regulation: City police - Multi £bn Asset Based Finance has no police - but many fraudsters!
April marks the fourth anniversary of a new financial regulation landscape in the UK. The Financial Conduct Authority blazed on to the scene in 2013 with a promise that there would be ‘nowhere to hide’ for financial services firms and individuals who misbehaved. Four years on, however, some solicitors representing small business owners and punch-drunk shareholders are questioning whether anything really changed with the arrival of the new City watchdog.
ABFA a gumless Jelly fish
As head of commercial litigation at complex disputes specialists Stewarts Law, Clive Zietman acted for RBS shareholders in relation to losses sustained in its April 2008 rights issue. He told the Gazette: ‘If there was another financial crisis you would find a lot of the banks had [again] invested in products where they didn’t understand the underlying risk. You would be naive to think that it has all been cleaned up. I just don’t buy that.’ The leaden pace of redress for consumers ill-served by the sector has continued to grate. Predecessor watchdog the Financial Services Authority was criticised for its tardy handling of the payment protection insurance scandal, for example, not least because it gave birth to a vast claims management industry. It was also lambasted for repeated delays in the publication of its report into the collapse of banking group HBOS, as well as its handling of interest rate swaps mis-selling. Alison Loveday, chief executive of Manchester-based Berg Solicitors, is acting for a number of small business clients who allegedly suffered at the hands of RBS’s controversial (and now defunct) restructuring unit. A 2013 report by Lawrence Tomlinson, former adviser to the then business secretary Vince Cable, alleged that the bank wrecked small businesses in pursuit of profit. The state-controlled bank has admitted it ‘could have done better’, but has rejected allegations it tried to profit from distress situations. She says: ‘We were hoping that the FCA would really take hold of the [Global Restructuring Group (GRG)] dispute. Tomlinson clearly showed that something had been going on for years, but we still haven’t seen the regulator’s own report and I don’t think that puts the regulator in a good place.’ Loveday is not the only one frustrated by how long it takes the FCA to produce reviews into wrongdoing. Andrew Tyrie, chair of the Commons Treasury Select Committee, has written more than once to FCA chief executive Andrew Bailey asking for the GRG report to be published. Meanwhile, the Treasury committee published its own report last month into what it sees as a major cause for the frequent delays – the so-called ‘Maxwellisation’ process, by which anyone criticised in a report is allowed time to challenge it before publication. The review, carried out by Andrew Green QC and barristers from Blackstone Chambers, called for a fundamental overhaul of the practice. Tyrie said: ‘The principle that those criticised in public reports should have an opportunity to respond is sound. Nonetheless, there is a balance to be struck to ensure fairness, both to those who may have been subject to potential wrongdoing or malpractice, and to those subject to criticism in reports.’ The review concluded that the representation process has not only been overused, but also used for inquiries other than those conducted under the Inquiries Act 2005 (rules 13 to 15). It proposes a list of guidelines for chairs of inquiries not covered by this act, with the aim of reducing the length of time it takes for reports to be published. The report also calls on the government to revoke rules 13 to 15 as soon as possible; David Cameron’s administration agreed to look at this in July 2015, but nothing has happened since. Publication delays can indeed be lengthy. The FSA’s report into the failure of HBOS took seven years from inception to publication, while the FCA’s report into RBS’s restructuring group began three years ago. Loveday cannot be sure the GRG report does not contain material relevant to her own clients’ cases. She explains: ‘We don’t know what the report says and we are being told by the bank’s solicitors that it is not relevant. But how do we know until we see it?’
Former business clients of the Royal Bank of Scotland are accusing the bank of systematically manipulating documents to cover up wrong doing.
In an exclusive interview with the BBC, a former RBS employee has come forward to support allegations of document manipulation within the bank.
RBS says it categorically denies document manipulation and forgery.
Mark Wright started working for NatWest Bank in 1988 and was still there in 2000 when it was taken over by RBS.
In 2005, Mr Wright accused two former RBS colleagues of concocting bogus complaints purportedly from five of his customers.
He says the employees were from the bank's Group Compliance Unit established to deter misconduct and malpractice in RBS. He referred to the unit as the bank's "police".
Mr Wright's five customers later submitted statements contradicting the bogus complaints. The two accused compliance staff subsequently left the bank.
RBS customers who allege wrongdoing
The BBC has spoken to a number of businessmen and financial advisers who allege document manipulation and forgery by RBS all of which allegations the bank denies.
Mr Wright told the BBC that the bank failed to properly investigate the complaints or accord him the status of whistle-blower. "I had five individual customers who all came forward to me stating that the wording and conversations with this member of staff from group compliance were not their words, so effectively the telephone transcripts didn't reflect what the customer was saying." Mr Wright said as a senior manager he had a duty to report the falsifications. "I told my line manager this because he had been affected by the negative rating that Group Compliance had given me over these fictitious five customer complaints and falsifying the customer care calls so I decided to contact them all and the behaviour was the same with all five."
'I was suspicious'
Mr Wright said he learned later from colleagues that such misconduct was not uncommon in the bank's Compliance Unit. "I discovered through a member of staff from Group Compliance that it would be common practice that they would falsify files if they needed to create a certain picture." Mr Wright said he became increasingly concerned about the way the bank handled allegations of wrongdoing and had wanted a full external investigation because of the serious nature of his allegations. "I was suspicious of wrong doing from 2005 to 2012," he said. Mr Wright claims his standing within the bank suffered enormously as a result of his action. His employment status within RBS was changed to "undesirable" when previously he had been classed as "excellent". Bonuses were also stopped. In 2013 Mr Wright finally took redundancy after his GP diagnosed him with long term mental health issues. The bank upheld one of his grievances. A RBS spokeswoman said the bank was aware of these concerns being raised previously and that they had been thoroughly investigated and responded to. She denied there had been systematic document tampering at the bank. Mark Wright lives in the constituency of North Norfolk represented by former government minister, Liberal Democrat Norman Lamb. Mr Lamb said he has written to RBS five times to demand a meeting about Mr Wright's allegations.
How high did this go?
He said: "My fear is that it appears to be more than a few rotten apples behaving badly. There appears to be an institutional culture here that facilitated this corrupt practice. That's the allegation. "And the way in which they dealt with a whistle-blower, who ought to actually be respected and treated with the utmost seriousness, instead they pushed him through a very long process, the wrong process." Mr Lamb said: "Treating it as a grievance not going through the proper whistle-blowing process and allowing that individual to be destroyed rather that treating seriously the allegations that he raised and that for me begs the question. How high did this go? Did it go to the very top of the bank? And why are the current leadership not prepared to examine these really serious allegations thoroughly?"
London court hears of ex-HBOS banker’s ‘corrupt relationship’ with business consultant
Alison Mills, who once worked for Close Brothers, knew all about her husband’s business activities, the trial was told. Her 40th birthday trip to Barbados was attended by Mr Scourfield and Michael Bancroft, another QCS consultant, the jury heard.
The consumer watchdog Which? which carried out the study says the regulator, the Financial Conduct Authority should act to to cap the high unarranged overdraft fees on current bank accounts. Exorbitant overdraft fees are forming part of an FCA review into high interest loans which was in response to the Competition and Markets Authority’s two-year investigation into high-street banks, which was completed in August.
02/07/2017 10:44 AM
Thames Valley Police, together with the Crown Prosecution Service, has just completed the investigation and prosecution of one of the largest fraud cases it has ever undertaken. - Clearly they have not investigated the factoring industry
The sum of money lost by HBoS as a result of the actions of a corrupt senior employee and others was at the very least £250M. He and his fellow conspirators embarked on a spending spree involving yachts in the Mediterranean, villas in Barbados and Majorca, prostitutes, overseas bank accounts, and a general high life. This has been at the expense of the shareholders of the bank, and many medium and small companies which have been bankrupted and ruined. Little will be recovered. There are three aspects that I find particularly shocking about this case: firstly the length and cost of the investigation, has resulted in the case taking over 6 years to bring to court, 151 police officers and staff tied up in the investigation, and at a cost of more than £7M which has been borne by the householders of Thames Valley. However it is important to remember that this was not a victimless crime, the shareholders are largely pension funds, which most of us have a stake in, and companies which have been bankrupted, along with the livelihoods of their owners and employees. Secondly that a fraud of this size could have taken place either displays complicity or incompetence, a lack of corporate governance, complacency, and an absence of proper safeguards. An honest and efficient banking system is essential to the well-being of the country. It does not require more legislation and red tape, but it does require people do their jobs properly and honestly. Banking is damaged when corruption occurs within it. Lastly, and almost the most disturbing, if Thames Valley Police had not taken on this case no one else would have, and the crime would not have been investigated. The principal perpetrators would have escaped with their reputations intact and with enormous wealth. The cost in time and money for a police force to take on a major fraud investigation is considerable and a judgement has to be made whether the £7m spent on this case, and police officer time, could have been better spent in pursuing other crimes, such as child sexual abuse, and the multitude of lower scale frauds perpetrated against smaller companies and the elderly. If Thames Valley Police take on further cases of a similar nature it will again tie up a large number of police officers and staff. Yet if it is not prosecuted no one will be brought to justice. I have an uncomfortable feeling that other police forces are in similar positions. If a bank is physically raided then a huge police effort will go into bringing the bank robbers to justice. If it is raided by its own staff it may well be ignored. There needs to be an agreed policy that if a major fraud is committed, and the Serious Fraud Office does not have the capacity to take it on, then the police force that investigates it is reimbursed by central government, or through a fine or costs imposed on the auditors, the bank and the offenders involved. In this case there does not appear to be a way to recompense Thames Valley Police and the Council Tax payers who part pay for their police force. The government should ensure that full restitution for the cost of prosecuting this case is made, and that every major fraud should be investigated. The entire budget of the Serious Fraud Office is only £44M a year, whilst for the City of London Police, who also investigate fraud, it is considerably less. When compared to a fraud of this size, then it is clear that far greater resources need to be made available to tackle the scale of the problem. The overall annual fraud and cyber-crime loss is put at nearly £200BN. It affects everyone, from the elderly and the vulnerable, to small businesses and to the largest. Combatting fraud should be financed properly, and it should not be necessary for local police forces to take on cases of this size and complexity. Until this is done properly at a national level fraud will continue to be the largest financial crime in the UK, and the crime of choice for intelligent criminals. If ever there was a possible spend to save measure, financing the fight against fraud would be the most productive. I wish to congratulate the Thames Valley Police officers and staff who have pursued this case to a successful conclusion over the last 6 years. It has been an uphill struggle at times, and their persistence has been rewarded. Anthony Stansfeld Police and Crime Commissioner for Thames Valley
David Mills and Lynden Scourfield, right, were jailed for stealing millionsTHAMES VALLEY POLICE
There were cheers and applause at Southwark crown court as Lynden Scourfield, 54, a former senior manager at HBOS, was sentenced to 11 years in prison, with Judge Martin Beddoe describing the disgraced banker as “utterly corrupt”.
Judge Beddoe handed a 15-year sentence to David Mills, 60, and said that the banker-turned-business consultant was a “thoroughly corrupt and devious man, adept at exploiting the weaknesses of others”. He told Scourfield: “You have shown not one shred of remorse. I don’t know how Mr Mills got hold of you. He is the devil to who you sold your soul in exchange for sex, for luxury trips with or without your wife, for bling, for swag,” said the judge.
“People haven’t just lost money but in some instances their homes, family and friends. People who could have expected to be comfortable in retirement were left cheated, defeated and penniless,” he added.
Mills’s wife, Alison, 51, was given a three-and-a-half-year jail term after being found guilty on one charge of conspiracy to conceal criminal property.
People haven’t just lost money but in some instances their homes, family and friends
Michael Bancroft, 73, an associate of the couple, was jailed for ten years, and John Cartwright, 72, another business colleague of the rogue consultants, was handed a three-and-a-half-year sentence. Mark Dobson, 56, a former colleague of Scourfield’s at HBOS, was jailed for four-and-a-half years. The sentences were the culmination of a five-month trial that exposed how the crooked bankers conspired with the consultants to asset-strip HBOS business customers who had been put into the lender’s Reading-based specialist unit for firms in financial difficulty . However, instead of helping turn around the customers’ fortunes, Scourfield authorised tens of millions in illegal loans that were then used to pay the exorbitant fees of the Mills family’s business, Quayside Corporate Services, in return for exotic holidays and envelopes stuffed full of “funny money” to pay for his hire of prostitutes. At one point, Scourfield was even given an American Express card by Mills to pay for his personal expenditure.
Estimates of the total losses incurred by HBOS vary, but some experts have put the cost of the scandal to the bank, now part of Lloyds Banking Group, at more than £1 billion.
The Millses made so much money from the scheme they were able to afford a lifestyle that included high-end cars, an estate in Gloucestershire, and a 100ft yacht named Powdermonkey. Bancroft owned a villa in Portugal, as well as a large property outside the Warwickshire town of Shipston-on-Stour.
Nikki and Paul Turner, whose business was one of those targeted by the fraudsters and who played an instrumental role in uncovering the scandal, said that they took “only partial satisfaction” in the lengthy sentences handed down by the court.
“People have lost their businesses, people have had their lives ruined, and have been met by at best callous indifference, and at worse little less than persecution, by one of the UK’s leading high-street banks,” said Mrs Turner.
Lloyds is under pressure to compensate the victims of the scam and the Turners have written to Lord Blackwell, the bank’s chairman, demanding redress from the lender.
Lavish cruises on superyachts, sex parties with porn stars, holidays to Barbados… the exploits of the crooked bankers found guilty this week of plundering £1billion from small firms defy belief.
Their extravagance and greed has seen them compared to the characters in The Wolf Of Wall Street, starring Leonardo DiCaprio.
But for Nikki Turner this was no Hollywood film script. These were real wolves, baying at her door.
And when the mother of two finally tracked down Lynden Scourfield – one of the fraudsters who had ruined her life – she was given a shocking insight into their shamelessness.
‘We’d been trying to get through to him for days and I finally got him one evening at 6.30pm,’ she recalls.
‘He picked up the phone and told me he was in a hotel in Birmingham and he’d just got out of the shower. “I’m naked,” he said. “I’ve just got a towel on.” It was so inappropriate; I didn’t know what to say.’