Thursday, 13 September 2012

Talk and Tokenism

Winston Churchill once said, “However beautiful the strategy, you should occasionally look at the results” and as a long suffering victim of the ongoing banking crisis I wish those who chose to initiate the “pile it high” culture at the expense of the individual had seen fit to resist the opportunity to amass obscene personal wealth without moral regard, for fear of the wider economic consequences. 

Martin Wheatley would like us to believe flawed management run business models, policed by employees with a conflict of interest have been the major culprit when it comes to dangerously incentivised, inadequately trained banking staff miss-selling and miss-guiding financial customers. However, I struggle to comprehend how a culture favoring lucrative bonus structures for all those involved could be effectively implemented from anywhere but the very top. I suspect instead, it is at the giddiest of corporate heights, where the promise of multi million pound, profit linked remunerations which amount to hundreds of times the average salary that the greatest conflict to customer interest actually resides. As indicated by former HBOS director Peter Cummings, who now faces fines of £500,000 and a life time ban from the financial services industry for his part in the demise of HBOS, it is far more plausible that the decision to turn a blind eye to high risk strategies, product miss-selling and neglectful duty of care to clientele is made in the board room in front of sleepy regulators instead of residing in the domain of misguided sales staff or any single executive.

Following the FSA’s survey of twenty two financial institutions we are now assured the banks and their CEO’s are more than ready to embrace recommendations for an all encompassing change in operational culture. During the coming twelve months the new Financial Conduct Authority are entrusted to enforce and monitor these changes and Martin Wheatley insists this will mean banks will no longer be permitted to,
  •         Sell unsuitable products to people, especially the vulnerable
  •         Arrange the wrong mortgages because it costs people their homes
  •         Put their own interests and incentives ahead of their customers
  •        Employ business practices which are without integrity or unfair to customers

While I firmly believe Lloyds Banking Group (under whose skirts HBOS have hidden since 2008) will have an inordinate task ahead if Mr Wheatley’s guidelines are to be adhered to, if past performance remains a reasonable indicator of what to expect in the future, HBOS will find it nothing short of impossible because, over the last six years I know from personal experience they have,
  •  Paid out almost £4,000 in introducer fees my own mortgage despite there being no financial evidence to support the repayments    
  •  Overvalued our home to create the necessary headroom to facilitate the sale of their mortgage product
  • Refused to re-negotiate our mortgage terms or show any of the government promised forbearance when we got into trouble, despite my husband’s health problems 
  •  Omitted me from all discussions with regard to our mortgage, from outset, on the grounds it was my husband’s duty to keep me informed and not theirs
  •  Created a massive mortgage shortfall by unnecessarily forcing a sale when I had secured a method of servicing the loan via rental income


  • Reputedly covered their own losses by placing “bets” against the property market in the knowledge their severely flawed lending portfolio was about to produce a massive downturn in property values.

 Aided and abetted by an all but a hands off attitude from both the regulators and the Financial Ombudsman Service, I am repeatedly advised that without proof of "intent", I will remain unable to recover losses caused by HBOS through legal channels as my damages are too remote. Nevertheless, it is my view the FSA’s findings that miss-sales were fueled by a strategy which employed irresponsible sales incentives is merely another example of cold blooded intent at the highest level.  HBOS profits were secured via the manipulation “with intent” of banking staff, manipulation “with intent” of the LIBOR rates and manipulation “with intent” of anything else which would provide a handsome return, regardless of the price paid by the individual and the global economy.

American president Franklin D Roosevelt once said, “In our personal ambitions we are individualists. But in our seeking for economic and political progress as a nation, we all go up or else all go down as one people” and in view of this, I can only hope Martin Wheatley successfully delivers his plan to address the “knock on effects to customers” of banking malpractice because some of us, as a direct result of our banks actions, are already at down at rock bottom.

And for us, there is nowhere else to go.

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