Saturday, 28 April 2012

Unequal Shares

Thomas Jefferson, third president of the US, once said, “I believe that banking institutions are more dangerous to our liberties than standing armies. If [we] ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and the corporations that grow up around [the banks] will deprive the people of all property until their children wake up homeless.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs,”  and if the 8,500 mortgage litigation cases against them are anything to go by, HBOS and Barclays are about to prove Jefferson’s words of warning  are correct.

A recent report warns banking giants Barclays and HBOS may well have to reimburse their customers for charges amounting to hundreds of millions. This is because HBOS’s and Barclays' shared appreciation mortgages, which offer an interest free capital sum in exchange for seventy-five percentage of the borrower’s equity, have harvested vast rewards for the bank at wholly excessive expense to the mortgagees. Some homes have appreciated by £300,000 in the 10 years since the loans were made meaning homeowners have had to pay more than £200,000 on loans as little as £25,000. These products were designed and targeted at low income customers who were quite often elderly and have proved doubly lucrative for the lenders because properties values were in the doldrums when many of these products were sold. This gave the banks the perfect window of opportunity to acquire a  substantial slice of an often vulnerable individual’s future equity for a minimal outlay throughout the depressed years of property growth during the 1990’s.

Hilary Messer of RWP solicitors is waiting for more people to come forward before she brings this proposed class action formally to the attention of HBOS, Barclays and the courts but it cannot have made it any easier for those Barclays shareholders aware of this pending lawsuit to know there could be a demand for a further 850 million pounds on top of the ongoing costs of the PPI claims and the impact of the government bailouts. Neither can it help to be made aware that less than half of Barclay’s chief executive Bob Diamond’s pay packet is to be growth related. Little wonder so many shareholders were vocal in their discontent to discover Bob Diamond is to enjoy a 2.7 million bonus on top of his 1.35 million salary in addition to the 5.7 million he has already received to cover his tax bill. However, it must have been nothing short of incendiary to find Barclays staff bonuses of 2.25 billion pounds in 2011 were triple the 730 million pounds paid out in dividends to share holders.

While David Cameron says the lack of economic recovery is, “very, very, disappointing” and Ed Milliband blames the present governments “catastrophic”  polices and lack of meaningful banking reform, it is clear from the actions of Barclays and HBOS they remain blissfully detached from the effect the first double dip recession we’ve had since the 1970’s and the impact it is having on the rest of us. Instead their executives continue to feather their own nests and, in the case of the Bank of Scotland, attempt to paper over the cracks with an advert created  by London-based advertising agency RKCR/Y&R and developed “to reassert traditional values”. It tells us, “You never know what is going to be round the corner, or what twists and turns life is going to take.” I beg to differ. I have always found past performance to be a reasonable indicator of what’s on the cards for the future and in the case of HBOS and Barclays it is clearly going to be more of the same. It is because of this my personal battle with LLoyds and HBOS is destined to be a long one as is, I suspect, any hope of economic recovery.
Thomas Jefferson also said, “It is error alone which needs the support of the government while truth can stand by itself” and sadly for us, it seems he’s right again.

Wednesday, 25 April 2012

Rainy Days and Lost Luggage

Self help writer Maya Angelou says, “You can tell a lot about a person by the way they handle rainy days, lost luggage and tangled Christmas lights” so I am pleased to disclose rainy days are a weather condition to which thirty four years of continuous parenting has not only supplied a ring side seat for many hours of wet suited, watery fun but they have also been the backdrop for numerous convivial gatherings in front of a roaring fire while inclement weather fills reservoirs in a single down pour.  Lost luggage has also been an integral part of my life and although I have not endured its inconvenience whilst in transit, five children, six grandchildren and a husband with short-term memory loss has meant I am never more than a whisper away from a panic filled enquiry as to the whereabouts of something vital. I find an un-flustered approach to the retracing of steps seldom disappoints but on the rare occasions it fails a plentiful supply of spares usually saves the day.
However, the task of tackling tangled Christmas lights could easily be a euphemism for my increasingly complicated battle with HBOS via the Financial Ombudsman’s Service. Not unlike its namesake, an inordinate amount of time is required along with a steely determination and an excellent pair of glasses with which to spot the intricacies of the task at hand. With this in mind I recently allocated my first child free day since the Easter holidays for the preparation of a response to the Financial Ombudsman Services latest letter in which they claim my HBOS complaint is outside their jurisdiction on the grounds of timescale.

 I have asked my adjudicator to consider the following points;

·        HBOS have neglected to provide a full and final response to any of my letters of complaint and for this reason should not be left to decide when my six month window of opportunity to complain commences.

·        When jurisdiction issues were raised by HBOS at outset (March 2011) I was invited to respond to their argument. On 27 April 2011 I replied with my defence (which the FOS acknowledged on 5 May) and I was then invited by the FOS on 15 May to proceed with the completion and return of their complaint form.

·        In the FOS’s letter of 15 March 2012 upholding HBOS’s jurisdiction objections, no mention is made of my correspondence of 27 April 2011or my subsequent letter of 16 June 2011 in which I thank the FOS for supporting my jurisdiction appeal.

·        When the jurisdiction issue was raised once again by the FOS on 21 July 2011, I wrote on 25 July 2011 to explain I believed it had already been dealt with in my letter of 17 April 2011. No further mention was made of jurisdiction issues until 14 December 2011despite three further FOS letters to me in the meantime.

·        Stating I was unaware of the six month deadline to complain is simply not true. I was only unaware that HBOS had already started the six month clock ticking because of the ambiguous nature of their letters.


·        Withdrawing eligibility to an extension of time for my future responses to the FOS gives HBOS a huge and unfair advantage over me as lone complainant.

Safe in the knowledge my five page letter will be rocking several boats before the week is out, I am left to ponder the content of another HBOS response. My additional and separate FOS complaint sights HBOS’s over valuation of my home in May 2006 as pivotal to my family’s financial down fall and entirely responsible for the shortfall arising from the forced sale of my home in April 2009.  Having already waited two months for a reply to a letter HBOS claim they have never received, I have now discovered HBOS are to enjoy an additional two months in which to formulate their reply.

Sadly I have no reason to believe I will be hearing HBOS offer me anything like the words of Bank of America Chief Executive Officer, Brian T Moynihan who recently said,

“It's time to acknowledge that our Bank isn't working anymore—not just for the market, but for people, our real customers. We've paid $8.58 billion in relief to borrowers and $3.24 billion in fines. We face lawsuits and claims from citizens, companies, and state and local governments. There is even a petition with the Federal Reserve to break up our bank, adding yet more uncertainty to our position. Finally, we've found ourselves front-and-centre in the national foreclosure crisis, and deep in unpopular investments like coal, at a time when climate change is a growing societal concern.”

Instead, I am in no doubt that despite damning FSA reports, HBOS will be making no confessions nor will they have plans to shelter the individual from the economic down pour their actions have caused.  In contrast I suspect many of us will be losing much more than our luggage as a direct result of their “terrible corporate governance” and it will not only be me left untangling far in  excess of a few Christmas lights this year. It will be business as usual for HBOS as there is no incentive for them to behave otherwise and the Financial Ombudsman’s Service will remain characteristically ineffective in the wake of the ever increasing demand for justice through a complaints process that constantly creaks in protest to the unprecedented rise in the number of complaints.

Maya Angelou also said, “There is no greater agony than bearing an untold story”... [and while]... “I can be changed by it I refuse to be reduced by it.” I am pleased to report that regardless of the rain, the lost luggage and the tangled Christmas lights, these remain my sentiments precisely!

Tuesday, 10 April 2012

Capitalism and Punishment

Winston Churchill once said, “The inherent vice of capitalism is the unequal sharing of blessings: the inherent virtue of socialism is the equal sharing of miseries” and, despite more than a fifty year interval, capitalist principals continue to force feed financial misery to the masses while our corporate and banking elite remain free to enjoy, and retain, the blessings of bailouts, rescue packages and sweet heart tax deals designed exclusively for their benefit. 
One might have thought embracing capitalism would provide the freedom to fail as well as the freedom to suceed but it appears the favoured few have remained remarkably unhampered by their failures and their bad decisions have instead achieved freedom from consequence via the government supported socialising of their losses.  In contrast I, not unlike the banks, but an individual with an unrecoverable deficit void of asset backing, continue to be on the receiving end of a “holier than thou” attitude towards a hand I have been dealt as a direct result of flawed banking risk management policies which saw many of the world’s largest banks run out of money in 2008.

Since then, with only the aid a few charitable hours of CAB time and the help of my trusty friend Christine, I have endeavoured to explain my impoverished circumstances to all our creditors. I have explained over and over again my husband’s vulnerable state of mind has resulted in a low paid job which leaves us nothing to offer towards the repayment of our million pound deficit and repeatedly described the enormous strain constant requests for money have had on our health, our marriage and our children’s family life. Our creditors should be in no doubt that their balances are unrecoverable, not least, because each and every letter has been supported with both financial and medical evidence.

For the past three and a half years I have borne the anxiety of our ordeals alone. I have done this in the knowledge that suicide was never far from my husband’s mind when the burden was his.  Compelled to do everything within my power to prevent my youngest three children enduring the loss of a father in an identical manner to that which their older sisters suffered more than twenty years ago I have, inch by inch, with the help of family, friends and nothing short of huge personal resolve, pieced together a modest lifestyle and a supportive family environment against all the odds.

Year in and year out I have dutifully and covertly prepared financial statements and medical reports for our creditor’s perusal far from sight of my husband’s glancing eye. With each creditors update I always enclose an appeal for a compassionate write off in the light of our unchanged circumstances. This year, however, there has been one fundamental difference to the content of this message of misery because, to my immense joy, not to mention unbridled relief, our most recent medical report states my husband is no longer contemplating taking his own life.

Despite the obvious benefits of this news to me and my children, the Financial Ombudsman’s Service now tell me it is precisely because of the improvement in my husband’s health that Lloyds TSB are now unwilling to consider debt forgiveness at all. After three long years of living with the fear of an intolerable outcome, I am now told Lloyds TSB are looking for a less uplifting change in my husband’s health to be able to reconsidered my family and I for a share in the blessings that came only their way in recent years and not mine.
Unlike Lloyds TSB’s own chief executive, Antonio Horta Osorio, it appears I am destined to enjoy no respite from debt fighting stress. There will be no government bailouts for me nor will there be time off to catch up on my disturbed and troubled sleep. It appears the only hope of freedom from the misery of capitalism’s failures for me is in the unpalatable event of my husband’s demise.
American philosopher Henry David Thoreau once said, “The price of anything is the amount of life you are prepared to exchange for it”, and I was recently shocked to hear that in China a seventeen year old boy’s kidney was the going rate of exchange for an ipad and an iphone.  I am, however, nothing short of astounded to discover that in the UK, the going rate of exchange for £25,000 of unsecured Lloyds credit card debt is no less than the life of a forty six year old family man. Sadly, I cannot see any amount of tightening of the regulatory screws will ever address this.