Monday, 25 August 2014

Notorious Difficulties

Democratic socialist and one of the most influential English writers of the 20th century, Eric Arthur Blair (otherwise known as George Orwell), once said, “If you want a vision of the future, imagine a boot stamping on a human face -forever” and, as a result of this week’s disappointing developments, it’s hard not to imagine the human face being stamped on is destined to be mine.

In March 2006, having discussed our financial circumstances with a financial advisor/mortgage broker, my husband was told we could reduce our outgoings by more than half if we agreed to switch our existing mortgage of £725,000 to the Bank of Scotland and take a further advance of £65,000, secured against our home, to repay our credit cards. Desperate to alleviate his cash flow problems at a time when the terminal illness of two of his closest relatives was making it impossible to divide his time effectively between the needs of his family and the demands of his business, he agreed.
  • The mortgage application (which we never saw) was submitted on line by a broker we never met
  • There were no acquisition costs to pay, neither were there solicitors or surveyors to instruct as the cost of the valuation and the conveyance, along with instructions, were taken care of by the lender.
  • And, on 30 March 2006, after being told by the broker we had received a mortgage offer for £790,000 from the Bank of Scotland, we signed the declaration page and the direct debit mandate of an otherwise blank application form.
As a result, the broker earned £4,500 and we unwittingly agreed to move from a very tight corner which could have been rectified by the sale of our house, to an impossible situation amounting to tens of thousands of pounds in arrears, a £217,000 shortfall following the forced sale of our home in 2009 and six long years of battling with an unsympathetic bank while trying to establish precisely what had gone on. Had HBOS not sent me an entirely unsolicited copy of our original application form (minus the declaration pages) by way of an explanation to some wildly inaccurate claims they were making about the original purchase price and original purchase date of our house, I might never have discovered the fraudulent nature of the information it contained.

Having reported the fraud to HBOS and been advised never to contact them again, I immediately reported the matter to the FCA who were insistent it was beyond the remit of both themselves and the FOS.  Because of this I was told I should go straight to the police and, encouraged by the diligence of Action Fraud's staff to record the details of my case and the news they could present the crime as an Abuse of a Position of Trust, I looked forward to being contacted by the Serious Fraud Office of the Devon and Cornwall Police.

However, all appears not to have been as it seemed as, without even looking at any of my documentary evidence, I am now told the police will not be investigating my claim of mortgage fraud as cases of this nature are,
  • Notoriously difficult to understand
  • Notoriously difficult to take forward if the real victim, namely the bank, does not come forward
  • Notoriously difficult to prove
I am further advised, 
  • I am not the victim of the crime and have therefore experienced no loss
  • I may well be considered complicit in the fraud as I gained from the brokers actions
  • At best, a fraudulent mortgage application is a civil matter or a case for the FOS
They suggest,
  • I bring the bank's irresponsible lending to the attention of the financial ombudsman and the financial regulators.
Politician, historian, author, political consultant and 58th speaker of the U.S. House of Representatives, Newton Leroy “Newt” Gingrich once said, “Perseverance is the hard work you do after you are tired of doing all the hard work you already did” yet despite the endless hard work of the past six years, this widely documented crime which was designed by the banks, implemented by unscrupulous brokers and facilitated by in house lawyers and solicitors, continues to go unpunished.

In the US the Bank of America recently agreed to pay $16.6 million in settlement for their mis-selling of mortgage backed securities in the run up to the financial crisis, but when it comes to justice for those of us who were coerced into the obtaining the unsuitable/mis-sold mortgages in the first place, there is none.


  1. I'm so sorry to hear this, Caroline. It is even worse because you had been given reason to hope. As bad as the financial loss that a bank causes, is the emotional pain that it happily encourages. These are truly immoral organisations.

  2. Caroline, this is sheer laziness on the part of the police in Devon and Cornwall. I am not that surprised, Chief Officers do not like expending budget on cases which will be hard to prove. However, you have been the victim of a fraudulent act, but I know you cannot afford to pay the level of fees needed to sue the broker and the bank. Good luck in trying to get the banl to take this further!

    1. Thanks Rowan. I haven't given up yet but I have to admit it is very disheartening to be constantly fighting to be heard by the bank, the regulators, the FOS and now the police.

  3. Thanks for your sympathetic words and appreciation of the situation. Will keep trying to get justice but suspect the best I can hope for is to put the bank between a rock and a hard place. Even this would be a result after so many years of being harassed for a shortfall that arose as result of a lucrative broker fraud which was designed by the banks to encourage mortgage churning.