Banking on a dirty little secret

Andrea is nervous! She’s tapping her fingers on the table, staring restlessly into the emptiness of the room and chain-smoking Marlboro cigarettes.

My smart, funny, confident friend who rarely lets anything get her down is a shadow of herself. I don’t have to look far to see what’s causing the despair that’s eating her up. Propped against the saucer of her coffee cup is a half folded letter with the date of her next court appearance. In two months time she’ll be slugging out the final leg of a battle that’s already taken up nearly ten years of her life. I’m confident she’ll win but she’s not so sure because her bank is the plaintiff!

“This isn’t just despicable it sucks. But since it’s the banks we’re talking about I’m really not surprised.”

Her story began in 2002 when, recently widowed and struggling with financial difficulties, she took out a £20,000 loan. Although the payments were being met, life was far from easy and the trauma of having nursed her husband through his final illness eventually caught up with her, triggering a nervous breakdown that put her into hospital. Andrea did what any sensible person would do in that situation: on the advice of the mental health charity MIND and the Citizens Advice Bureau, she told the bank about her illness and the impact it was having on her circumstances. She managed to negotiate a freeze on the interest rate along with a deal to slash the monthly repayments to a level that was affordable. Not only did the bank agree to this but it assured her that the paperwork had been adjusted to reflect the new arrangements.

Andrea was relieved! To meet her obligations she paid out what was left of her savings, sold a few possessions and slashed her domestic outgoings to the absolute bone. It was tough medicine to swallow but worth it as she was on schedule to clear the debt – or rather she would have been had the bank not dropped a massive bombshell. In 2005 it sent her a letter claiming that she owed a staggering £64,000! Part of it was the original capital but the bulk was the interest which – unbeknown to her – had been rolled up over the years. She assumed there had been a mistake but the bank denied this along with any knowledge of ever having agreed to a deal in the first place!

“I was stonewalled every time I complained or tried to explain things,” she said bitterly. “They behaved like sharks circling around a drop of blood.”

It was now a case of one person’s word against another’s with the bank accusing Andrea of trying to wriggle out of her responsibilities, even though the evidence suggested otherwise. She had letters which proved there was a deal along with records of the dates and times of telephone conversations with bank staff. Curiously the bank didn’t explain why if there hadn’t been an agreement, she was allowed to pay the money at a rate which put it out-of-pocket. And if there was no chance of a deal then why wasn’t she told this the moment she raised the issue?

Maybe the fact that Andrea owns a house with half a million pounds of equity attached had something to do with it! If the bank forced its sale then it would walk away with £64,000 plus any extras it might decide to add on. How very neat! Andrea’s tenacious digging also uncovered a document which revealed exactly how the loan team was thinking:

“No offer in response to review letter. Payments are not acceptable as customer is a home-owner. Continue recovery.”

Who said there was no such thing as compassion!

Sadly Andrea’s story isn’t unique as there are other people in a similar situation. Hopefully if the judge rules in her favour she can get her life back and close the page on this dreadful chapter. Whether the bank will give her the apology she rightly deserves is another matter. I’ll let you know what happens, but frankly we’re not holding our breath.

Banks have had a seriously bad press in the last three years and they’ve earned every bit of it. It takes a special kind of chutzpah to bring a global financial system to its knees; trigger a recession; reward those responsible with eye watering bonuses and then calmly leave the taxpayer to clear up the filthy, disgusting mess. It’s so breathtakingly audacious that it makes Bernie Madoff’s Ponzi scheme look like a scam to sell stolen t-shirts off the back of a lorry!

To then add insult to injury by reneging on customer agreements and then accusing those same customers of lying, adds a new dimension to the word “low”. This isn’t just despicable it sucks. But since it’s the banks we’re talking about I’m really not surprised. To hope for even an ounce of decency would have been naive.

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