Wednesday, 26 September 2012

Officials and Enforcements

Economist philosopher and author Friedrich August von Hayek once said, “Even the striving for equality by means of a directed economy can result only in an officially enforced inequality” and while evidence both at home and abroad continues to support widespread belief regulators will go to any lengths to uphold light touch enforcement in the financial sector, it has been no surprise to discover, after nineteen arduous months of corresponding, officially enforced inequality has also been the outcome of my Financial Ombudsman’s Service investigation.
When, in February 2011, the FSA originally advised me it was not within their remit to investigate individual reports of banking malpractice, it did not occur to me I would unsuccessfully struggle, for almost two years, to solicit the attention of the Financial Ombudsman Service. After repeated attempts to sweep my mortgage shortfall complaint under an HBOS favoring carpet via an "informal" investigation, I was encouraged by the FOS to "carefully consider" an HBOS offer of short term respite from debt collection pursuit. Had I agreed this would have permanently crippled any hope of my ever building a legal case.  It was at this stage it became abundantly clear the FOS's objective had very little to do with restitution for the individual and far more to do with damage limitation for HBOS.

After further investigation on my part it has now come to light that not only has my appointed Ombudsman upheld HBOS's claim that my case cannot proceed on the basis of jurisdiction, but to top it all I have also discovered the FOS have absolutely done nothing to progress the HBOS over valuation complaint I submitted to them more than eight months ago. Incensed at their blatant disregard for my numerous requests for their assistance, I sent the following letter to the Financial Ombudsman Service hoping it might galvanize them into action.

“Thank you for your letter dated 14 September 2012.
While I understand that this is your final decision on the issue of jurisdiction and am dismayed with the outcome, I am also very disappointed with the way in which I have been misled.  For over a year I have been led to believe that I had successfully established the exceptional circumstances as to why this complaint should go ahead.  Instead, I have been placed under the misapprehension that the jurisdiction issue was settled and my complaint ongoing.
I approached the FOS in March 2011 to initiate my complaint and was made aware of a possible jurisdiction issue in April 2011. However, on the 9 June 2011 I received acknowledgement from the FOS stating my case was to progress and replied, on the 16 June, saying how delighted I was that the jurisdiction issues had been resolved.  During the following months, and at your request, I spent an inordinate amount of time preparing my case and supplied you with detailed accounts of what happened.  I am now, 15 months later, quite frankly astounded to find the jurisdiction issue has not only come up again but been upheld in favour of the Bank of Scotland.  

I would very much appreciate an explanation as to how and why I was misled.

Secondly, I am more than a little confused about your statement:

“This final decision does not relate to the new issues raised by Mr and Mrs [Life After Debt] about an overvaluation of their property in May 2006.  They will need to raise this complaint with the bank first, before the FOS is able to consider it.”  

As no doubt you are aware from the file, I raised this complaint via [the FOS adjudicator] in February 2012, only to be notified two months later that the Bank of Scotland had insisted they had not received my complaint from [my FOS adjudicator].  [My FOS adjudicator] subsequently advised me in June 2012 she was submitting my complaint to the Bank of Scotland again. She told me she would pursue them for acknowledgement but I would have to wait at least another 6-8 weeks before they would deal with it.  I have, as instructed, continued to wait for a response from both yourselves and the Bank of Scotland only to receive your recommendation stating I need to raise this matter with the Bank of Scotland. This leaves me very perturbed once again. 

I would very much like an explanation.

I would also like to draw your attention to the fact that I have been told repeatedly, and on occasion, aggressively that it is unfair to expect the Bank of Scotland to wait for more than two weeks while I prepare my case despite the fact that I am doing the work while fulfilling my role as a mother of three children and have neither assistance and or expertise to call on to aid me.  However, the Bank of Scotland have repeatedly been given excessive amounts of time, amounting to a number of months on several occasions, to formulate their replies.  I do not understand why it is just the individual complainant that is pursued aggressively by the FOS for their replies and not the Bank of Scotland.  It feels very much like favoritism and I would like an explanation for this unequal treatment.
Yours sincerely

Mrs [Life After Debt]”

Thankfully this time my letter was immediately acknowledged but nevertheless I remain, as I have done for the past two years, perched uncomfortably on the edge of my debt fighting precipice waiting, once again, for the Financial Ombudsman Service to respond. While historian, author, media critic and blogger Eric Alterman says the "ability of the one percent to buy politicians and regulators is nothing new [and] inequality [is] a permanent part of our economic system" I know from past experience  the best I can expect for my endeavors is yet another substantial helping of officially enforced inequality cunningly disguised as a Financial Ombudmans Service reply. 


Monday, 24 September 2012

Business Worries

Eighteenth century English writer and printer Samuel Richardson once said, “Necessity may well be called the mother of invention but calamity is the test of integrity,” and while there is no doubt the calamitous circumstances of recent years have necessitated a certain amount of re-invention on my part, it has been the loss of my financial integrity which has caused me to suffer the most.

A little more than four years ago I was living the life of a stay at home mother of five children and wife of a successful property developer. We resided in a beautifully restored sixteenth century barn on the banks of the river Severn and enjoyed regular visits to the Costa del Sol where we stayed in our equally beautiful Spanish apartment.  Often hosting gatherings both at home and abroad for friends and family while organising and attending fund raising activities for the school, I endeavoured to be an upstanding and contributory member of our small community and a supportive silent partner in my husband’s business.

To my horror, I learnt the credit crunch of October 2008 was not just something which was happening to other people and quickly found being a victim of it meant losing our home, our business and our financial future. While errant bankers were using the sub prime mortgage market to prop up their balance sheets, my husband had, without my knowledge, endeavoured to prop up our own business by borrowing to the hilt. The subsequent and some would say calculated collapse of the property market along with the demise of our business bank Heritable not only meant we were unable to service our loans but we were without the means with which to repay our creditors. I was crippled with the shame from the demise of our financial integrity and made full disclosure of all future financial matters a condition of our marriage’s survival.

During the years which followed I have struggled to trust my husband despite guarantees he will never again exclude me from his decision making. Thankfully our lives, and my self esteem, have tentatively pieced themselves back together and gradually I have relaxed into some semblance of normality. Once again, I live in a beautiful house (albeit rented through friends and shared with lodgers), my children remain in independent schools (albeit through bursaries for which I have gone cap in hand to secure) and through the generosity of our family, we still visit the Costa del Sol from time to time. I have even started to organise and attend charitable events in an effort to once again be an upstanding and contributory member of the community. However, I also spend many a covert hour communicating with our creditors and their regulators and I continue to find tasks of this nature excruciatingly painful.

On the other hand, I am delighted to report that these days life is far from all bad. There are even moments of immense pride and pure joy. Only recently, for example, my eldest son, at the age of seventeen, secured a place at university to read English and Creative Writing only to discover, because of his young age, he would be unable to take up his place in hall without a parent present when collecting the keys. Thanks to the kindness of my older daughter who suggested she drive us, not only did this allow me to relax in the knowledge her company car’s satellite navigation would deliver us to our destination without out issue, but it also gave me a very welcome but all too rare chance to play my part of exceptionally proud mother while, for the first time in twenty five years, enjoying a fascinating afternoon’s sightseeing in London. It was unadulterated bliss.

Four years on from the onset of our personal financial crisis, I am very pleased to find our modest income, with the help of tax credits, continues to cover our outgoings and although my husband’s job with M & S is a menial one, it provides him the opportunity to study via the Open University. Without the worry of creditors hurling abuse at the door, over the phone or via the post I have become settled in a way I would have struggled to imagine in the days which followed my discovery of our true financial position. I have even begun to believe that one day our financial integrity may well be fully restored and allow us to lay to rest the ghosts.

However, this morning’s revelations have blown all thoughts of domestic bliss and hopes for a future of financial integrity to smithereens and I am consumed with fear for what may be to come because,

My husband tells me he has started a small business.

He has opened a bank account and made his first trade.

He tells me there is to be no borrowing and no stock holding.

He insists he will not give up his day job nor will he let this venture interfere with his studies.

He believes this is the only method in which to secure us a reasonable financial future.

He regrets he did not choose to tell me sooner but was concerned I might discourage him or it would cause me unnecessary worry.

He assures me he knows what he is doing.

He promises me everything will to be alright.

The trouble is.....

I’ve heard this all once before!

American actress, playwright and sex symbol Mae West once said, “People who are surprised easily need to be surprised more often” and I am most certainly guilty of being shocked to hear my husband, after eighteen years of marriage, four years of which were endured in the grips of an integrity stripping calamity, has now, without any mention or discussion, embarked upon another business venture. While I have no doubt he views my concerns for what amounts to little more than his opening a bank account as an over-reaction arising from my being over-sensitized to the consequences of debt, I unlike Mae West do not believe the solution to this is to be surprised more often.

Quite frankly I find the prospect of repeating the last four, however remote, nothing  short of terrifying.

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.

Monday, 3 September 2012

Tales of the Unexpected

American writer and humorist Marcelene Cox once said, “A vacation frequently means that the family goes away for a rest, accompanied by a mother who sees that the others get it” and for me the long wet school summer holidays have been no exception.

Over the past two months I have,

·        Cooked, cleaned and laundered for a household which has, on occasion, swelled to include an extra dozen people.

·        Escorted, dispatched and collected anything up to six passengers at any one time for delivery to a variety of destinations.

·        Shopped, chopped and packed vast quantities of picnic food for children, grandchildren and a full complement of adults.

·        Trawled, surfed, scrutinised and visited a plethora of venues to amuse both visiting family members and our offspring.

I have also,

·        Purchased and sewn fifty name tapes into my daughter’s new school uniform.

·        Made countless visits to my eighty five year old mother.

·        Assumed the role of appropriate adult for innumerable sight tests, dental checks and haircuts.

·        Sourced, priced and pondered over inordinated volumes of second hand English and Creative writing books for my sons university reading list.

·        Read, researched and commented on numerous articles exploring the ongoing global financial crisis


·        Written, posted and tweeted several pieces for my Life After Debt blog.

However, because family commitments have pushed me close to the point of overload during the past nine weeks, I have not, until now, registered there has been a great deal I haven’t done.

I have not,

·        Endured repeated demands for payment from our creditors

·        Written a single letter concerning our precarious financial predicament

And nor have I,

·        Received a long overdue response from Lloyds Banking Group, HBOS or the Financial Ombudsman’s Service adjudicator with regard to my over valuation complaint.

Grateful, in some respects, to have been free of all debt fighting angst throughout the school break, it has not, however, been a summer without results.

I have,

·        Received many supportive and constructive comments on my posts

·        Acquired a mounting number of new Life After Debt followers every week

·        Had my Great Expectations post retweeted by several readers including Occupy Wall Street


·        Been invited by Huffington Post Live to discuss LIBOR manipulation with former Minister of Labour for the Clinton administration, Robert Reich.

Like Marcelene Cox I believe, “No one knows his true character until he has run out of gas, purchased something on the instalment plan and raised an adolescent” and as one who has already raised my fair share of adolescents while simultaneously dealing with a million pounds worth of unpaid instalment plans, I am amazed to discover not only have I been heard on both sides of the Atlantic but my previous efforts have self fuelled during a period when my personal reserves were close to empty.

Here’s hoping “true character” might eventually reap similar success in my hitherto fruitless communications with the banksters at HBOS.


As ever, I shall not be holding my breath.