Image source: BrilliantBrighton.com

I wrote this week that Lloyds has hired an external investigator to look into sales pressure that may lead to mis-selling. Even though they’ve promised to do better, it seems Lloyds has fallen well short. But now it looks like even the “ethical” bank – the Co-operative – is less decent than they want us to believe. An internal survey done at Co-op was seen by The Sun newspaper and showed that things at the ethical bank are not as they seem.

Almost one third of Co-op staffers say the bosses they work for don’t “demonstrate fairness and honesty.” The same number say the bosses don’t “treat staff with respect” and “think the company makes decisions that are not focused on customer needs.” And nearly 20 per cent say they’ve been bullied in the last year.

Twice a year, Co-op conducts a Talkback survey to see how their employees feel. Just two months ago, Co-operative announced a shake up in incentives that would put an end to sales targets, but it seems like the change has not gone deep enough. Some of the employee comments that accompanied the survey included:

“The place is in turmoil – trying to change everything so it is about the customer and not sales.”

“This survey is just the top of the iceberg.”

“Some people higher up are resisting and saying it’s just a novelty.”

Image source: TheNews.coop

It’s disturbing news that Co-operative may be no better than the other High Street banks since tens of thousands of customers have turned to them when ditching Lloyds, Barclays and the bigger banks. Co-op has seen a 43 per cent increase in current accounts during 2012. The Move Your Money campaign has motivated many to do just that, but were these good moves for them? Move Your Money’s Laura Willoughby says, “Anger with the banks is turning into action. This year British banks have been exposed for exploiting their customers, starving the economy of credit and flouting the law.”

But if Co-op is no better than the other big banks, why bother changing and will you be in a better position for it? Consumer advocate Which? recently ran a survey on bank selling. Which?’s Peter Vicary-Smith says, “Our survey reveals the stark realities of the sales culture that still exists at the heart of the banking industry. Senior bankers say the culture is changing but this shows it just isn’t filtering through to staff on the front line who remain under real pressure to put sales before service, even after incentives are taken away.”

Image source: UK.coop

It’s disappointing that a bank that styles itself ethical would turn out to be just like all the other banks we’ve come to distrust. Peter Marks, the CEO of Co-op is retiring and has shared some interesting thoughts. Marks says, “The reputation of the banking industry is toast.” He also added, “I sometimes tolerate underperforming people longer than I should. That’s a weakness.” This doesn’t sound like a guy who’s putting pressure on staff to sell, but then again, he’s not the direct manager to front line staff that would be in a position to bully employees.

If you’re a Co-op staffer who’s been bullied or pressured to sell, we’d love to hear from you. Please feel free to share your experience anonymously. And if you’re a customer who’s been victimised by a bank with mis-sold PPI or other fraudulent bank charges, contact Empire Claims today for assistance with your claim!

The post Is Co-Operative Less Ethical Than They’d Like Us to Believe? appeared first on Empire Claims Blog.

Image source: GeartakerHolidaySale.blogspot.com

This  has been a spotty year for us – we’ve had ups and downs as a nation. The Diamond Jubilee was magic, the Olympics impressive and the news that there’s a royal baby on the way is absolutely thrilling. On the downside, the PPI claims scandal rages on, Libor rate rigging emerged and has finally triggered arrests and myriad other financial scandals have marred our fair nation. But there has been some good news as well. Here are five things we can be grateful for this Christmas:

#1 New Head Bank of England – Mark Carney’s appointment is good news. BoE leadership has been too soft and we need someone who can get a grip on the City. I wrote before that I applaud this appointment and I still think it will be great – can’t come a moment too soon! When a replacement was needed and the same old cast of characters were bandied as replacements, it seemed like nothing would change. But George Osborne got clever and went to Canada to find a new chief and did us proud.

Image source: CBC.ca

#2 Libor Arrests – It’s great to hear that cuffs are being slapped on Libor rate rigging perpetrators. I take this as a warning sign that banking shenanigans aren’t going to get the blind eye for much longer. If jail time is a real threat, perhaps bankers will behave better to stay out of gaol. Three have been arrested so far, but I’ve fingers crossed that many more will find their way into police custody to answer for their fraud that damaged our national reputation as well as untold victims.

#3 Employment Is Up – Unemployment continues to decline with 86,000 falling off the unemployment rolls in Q3 2012. This is the sharpest decline in over ten years and hopefully is a harbinger of better things to come when it comes to putting 2.6 million jobless Britons back to work! When numbers improved this summer, it seemed like an Olympics boon but now they’ve remained up, it feels like real progress on unemployment.

Click here to view the video on YouTube.

#4 Lower Tolerance for Corporate Tax Avoidance – Finally Parliament is cracking down on corporate tax dodgers that are skimping on taxes while the rest of us are suffering under austerity. Starbucks has cracked and agreed to pay more taxes, now hopefully Amazon and Google will follow! Google is doubtful as they’ve touted their tax avoidance as clever, but Amazon may yet cave and hopefully other multi-nationals will treat these as cautionary tales and pay as they should.

#5 FSA Is Going, Going, Gone – The Financial Services Authority which has long been proven to be a watchdog without teeth, is being disbanded and a new sheriff is in town! The Bank of England under Mark Carney will be reining in banks now and will hopefully do a much better job of taking misbehaving bankers to task. The new FSC promises more teeth, but I have the most hope for Carney to set the system to rights.

Image source: Bloomberg.com

So as we head into Christmas eve, Christmas and Boxing Day, remember that we’ve more to be hopeful about than simply shiny new gifts wrapped in bright paper. There are signs of change in the financial sector and I think we can all hope for better in the New Year. Another way to make your New Year better is to contact Empire Claims for an assist with your PPI claims. Contact us now for ethical assistance you can trust!

The post 5 Things to Be Thankful for This Christmas appeared first on Empire Claims Blog.

Image source: WilliamDiong.blogspot.com

We’ve been writing for months that you should make your PPI claim as soon as possible, but every day that passes, it becomes even more important that you file soon. What was once estimated to be a £2 billion scandal has now escalated to £15 billion and the banks have begun to signal they’re tired of paying out and are looking for an exit strategy. Confederation of Business Industries’ chief John Cridland said a time limit on PPI claims should be established because: “This is money that can only be spent once and I can’t help thinking that the time has come for it to be put to work more productively through lending into the economy.”

Cridland is incorrect on a couple of counts. Actually it was money that never should have been in the hands of the banks so it’s not their’s to decide how it’s spent. Second, the money has already been spent once – by consumers who trusted their banks. Refunding it back to customers they defrauded isn’t “spending” it. It’s handing it back to the people who never should have lost it. Cridland’s attitude is condescending at best. He thinks a better use for the money is to lend it rather than refund it. What he’s saying essentially is that if I steal £20 from you and am caught, a better system is instead of paying you back, I should loan it to a buddy of mine who needs £20.

Image source: EandT.theiet.org

How is that okay? Simply – it’s not. And John Cridland is wrong, but that doesn’t mean his notion won’t gain traction. I imagine that the banks are chomping at the bit to get an end date on PPI claim payments. I’ve written before that there’s a six year time limit on making complaints to the Financial Ombudsman once a date has been established that starts the clock ticking. That’s why making a New Year’s resolution to take care of your PPI claim as soon as possible is a smart one.

Image source: PoliticalHumor.about.com

After Christmas, no doubt you’ll have stacks of bills to pay and the New Year will also bring chilly winter cold that will drive up your energy bills. This means pounds and pounds of expenses that a PPI claim refund could help you pay. And with food costs escalating as well, these funds can help you take care of your family. The Christmas holidays always bring us closer to our family and you should remember that if you were mis-sold PPI, money was taken from you and your family – money that should have been yours to pay bills, heat your home, feed and clothe your family. Even if your household budget isn’t tight – unlike most Britons – that doesn’t mean the banks should get to keep your money.

Image source: KeepCalm-o-Matic.co.uk

We at Empire Claims hope you have a Happy Christmas and that heading in to the New Year, you’ll make it a resolution to apply for your PPI claim refund on any and all products it was mis-sold to you. Along with whatever goals you set for yourself in the New Year whether it’s shedding a stone, exercising more, watching less TV or getting control over your finances, making your PPI claim can give you funds that will help you accomplish all these goals and get your 2013 off to a good start! Contact us now for help with your claim.

The post A New Year’s Resolution to Make Your PPI Claim appeared first on Empire Claims Blog.

Image source: Guardian.co.uk

High street retailers are hurting this year. Sales are down on last year’s numbers and cash strapped UK households are cutting back on gift giving across the board. Have you cut back or is it Christmas as usual in your house? We aren’t buying less, but we are spending less. I wrote back in the summer that I start my Christmas early – I shop sales all year long so that I don’t have to lay out a huge wad of money right at year end. But most people tend to sacrifice their late November and December pay packets for Christmas rather than string it out like we do. But if your pay packet is spent before it even hits your account, what can you do? Many people are enjoying the benefits of PPI refunds and using that to have a Christmas they could not otherwise afford.

Image source: ForexWealthManager.com

All year long, PPI refunds have acted as economic stimulus across the country. Billions of pounds have been paid out to wronged consumers and they in turn have spent the cash to splash out on household items, catch up on bills or enjoy a holiday. This all acts to keep our economy buoyed up. We are now facing a triple dip recession which would have happened by now if not for the influx of all the PPI refunds into household budgets.

Image source: SheKnows.com

Household budgets are stressed to the max as we head into the last days before Christmas. With a cold winter looming and energy costs rising, many worry about how they will afford to heat their homes, so Christmas gifts may be sacrificed. What’s worse, real income is down because prices are rising faster than wages, making another dent in our budgets year round as well as the holidays. But the good news is for many people, they may have received their PPI refund in time to splash out on Christmas.

While some business leaders closely allied with the banks have called for a time limit on PPI claims payouts, I say the door should be left open until every person who was mis-sold PPI has a chance to file for a claim should they want to. Fact is, banks knew the product was dodgy, but decided to keep selling it anyway – using high pressure sales tactics and even tacking it on without permission, so I have no sympathy for them and believe they should have to pay back every penny.

Image source: Wallcoo.net

If you’re one of the fortunate who’ve received their PPI refunds in time to make your Christmas merrier, good on you. But if your claim has stalled, been rejected or you’ve not filed it yet, it won’t be paid by Christmas. The good news is though, if you’re racking up some debt – credit card charges and other – to finance your Christmas fun, the faster you make your PPI claim, the sooner you’ll get your refund and be able to pay down that debt. Contact Empire Claims today for assistance you can trust getting your PPI refund!

The post PPI Refunds Make for Very Merry Christmas appeared first on Empire Claims Blog.

Image source: Telegraph.co.uk

Looks like Lloyds has just until the end of the year to continue pushing packaged accounts – they’ve declared a moratorium on the sale of these high priced accounts which can run up to £300 per year. Many consumer groups and media outlets have expressed concern that these are just more mis-selling. The perks of packaged accounts are not appropriate or are duplicate for most customers and generated high commissions for those who sold them.

Even with the incentive plans at many banks changed to not commission sales staff for selling packaged accounts and other products, the goals are still in place and the bank is still profitting. They’re actually profitting more than ever because they aren’t sharing the loot with sales staff. All they’re offering is the sack if they don’t sell enough… It’s shameful.

Image source: MARSD.org

In addition to evidence of ongoing mis-selling, Lloyds’ staffers have complained about stress and bullying related to selling. While Lloyds has promised change, it’s obviously not happening in any meaningful way. They’ve even hired an outside investigator to look into the claims of employee abuse and bullying because the situation has grown so public it’s no longer deniable.

Many banks that sell packaged accounts will have to revisit their tactics in March anyway – so Lloyds is only slightly ahead of the curve. New rules from FSA will mandate that prior to selling a packaged account, the bank must check and ensure that the add-on benefits – including the insurance – can be used by the customer. During Lloyds’ voluntary ban, customers can still purchase packaged accounts online, but with no one pushing you to upgrade, why would you?

Image source: MaxFarquar.com

Lloyds insists that despite the investigation it has launched, the halt on the sale is not due to mis-selling concerns. A Lloyds’ spokesperson said they’ve paused the sales to “harmonise the way these accounts are sold between Halifax and Lloyds TSB branches.” Lloyds has been pushing packaged accounts hard – the numbers don’t lie. On average, in the UK – around 16% of bank customers pay for a packaged account – but at Lloyds the number is closer to 30%! Wow!

A Lloyds staffer told The Daily Mirror, “The bank puts huge pressure on staff to sell these accounts. If they don’t hit their sales targets they get disciplined. It’s really unfair.” On the sales points system, a standard current account earns 50 points while a pricey packaged account earns a whopping 170 points.

Image source: Guardian.co.uk

Packaged accounts have been predicted by many analysts to be the next big bank mis-selling scandal. Most customers are pressured into upgrading to the costly accounts only to find they don’t need or can’t use much of what they’ve paid for. Consumer advocate Which? says when it comes to up-sold bank accounts: “you can often get the extra benefits cheaper elsewhere, and that some of the ‘benefits’ just aren’t that much use”. If you don’t really want it and can’t use the financial product, it was mis-selling.

I’m chuffed that Lloyds has pulled packaged accounts from their sales roster and has hired an external investigator to look into bullying of staff and mis-selling, but this is the beginning of a long road. If Lloyds and other banks don’t start making changes from the top down, mis-selling will continue as it has for decades… If you were mis-sold PPI by Lloyds or any other bank, contact Empire Claims for an ethical assist!

The post More Mis-Selling As Lloyds Suspends Sales of Packaged Accounts appeared first on Empire Claims Blog.

Image source: SaveTheChildren.org.uk

E.ON is losing over 1,000 customers every day despite promises of a price freeze. August, September and October showed 100,000 customers left the energy giant. With customers leaving in droves, E. ON broke their price freeze and implemented a rate hike that averaged 8.7% per customer. An energy industry expert said, “E.ON got it royally wrong and has been left counting the cost.”

But if E.ON’s losing customers by the score, they can sleep better knowing they’re not as bad off as SSE. Also in August – October, SSE lost over 165,000 customers. SSE is even more deserving of the customer exodus as it was the first energy supplier to decide to raise energy rates. SSE raised its gas prices by 8.8% and electricity by 9.1%.

Image source: WalesOnline.co.uk

E. ON doesn’t want to talk about their diminishing customer numbers and says, “Customer numbers fluctuate all the time and as these numbers are not publicly available, we are unable to comment on specifics.” The E. ON increase will put up bills by roughly £109 – about half of the rate rise will be electric and the other half gas.

And depending on the region customers live in, you may see a higher or lower rate rise. South East customers will pay more than those in Scotland. Regional rates can vary by as much as £50. And it’s not just SSE and E. ON that have raised rates, British Gas, EDF Energy, Scottish power and nPower have all raised tariffs as well.

Image source: ThisIsMoney.co.uk

The customer losses comes on the back of news that E. ON overcharged 94,000 customers over £1.4 million they’ve been told to pay back. The energy firm is also paying a £300,000 fine to Age UK, a charity for the elderly. E. ON was inappropriately charging exit fees – I wonder if there’s an overlap between the 94,000 overcharged and the 100,000 that walked out?

For months, I’ve written about and experts have talked about how the energy companies are taking advantage, how millions are living in fuel poverty across the UK and how gas and electric providers are making record profits yet still raising tariffs in these tough times. In addition to implementing punishing rate hikes and improperly overcharging exit penalties on many customers, consumer adviser Which? says energy suppliers are employing mis-leading special offers that do not reflect accurately the true pricing and which are causing a “collapse in trust.”

Image source: Portland.IndyMedia.org

Which? referenced a British Gas advert that offered £125 off their bill plus an £82 discount. But the deal was good for a dual fuel tariff that was £157 more costly than the best available tariff. This means the “deal” was actually a rate hike! Another SSE ad promised £100 of benefits, but actually cost £233 more than other deals, which meant a net loss of over £130 to the customers who took that misleading deal. Energy Secretary Ed Davey said, “We are going to change the law so that energy companies place their customers on the cheapest tariff that meets their preferences and have clear personalised information to help them shop around more easily for the best deals.”

At the end of the day, like too many corporations, the big energy companies are about profit at all cost. They don’t seem to care about all the people living in fuel poverty and the thousands that die each winter because they cannot afford to heat their homes. It’s no wonder that hundreds of thousands of customers are walking away from these firms. If you’re similarly tired of big banks taking advantage, contact Empire Claims today for an assist!

The post E.ON and SSE Losing Customers In Droves Over Energy Rate Hikes appeared first on Empire Claims Blog.

Image source: TheSun.co.uk

Lloyds has promised to do better, has changed their compensation plans and hired new bosses that pledge to clean up the bank’s battered reputation. But I’ve had Lloyds employees write me and The Sun with tales of bullied staffers. Despite the changes, mis-selling continues at Lloyds. Despite the promises, Lloyds’ staff continued to be mercilessly pressured to meet high sales goals. And it doesn’t seem like Lloyds can get it under control, because they’ve hired an outside investigator to look into their broken system.

Lloyds hired US firm Kroll to look into what’s broken at the bank and I’m sure there will be a lot there to find. The Midlands are the area that seems to be the locus of most of the problems – and revenue – for Lloyds. Halifax is one of the points for the probe. The Sun revealed that one Halifax manager scored a whopping £28,000 bonus for just three months of bullying his staff into exceeding sales goals dramatically.

Image source: Guardian.co.uk

Lloyds’ Midland staffers told The Sun the following about their treatment:

“The behaviour of senior staff in my area is appalling and customers are treated with utter contempt.”

“Staff are still being routinely humiliated by managers and forced to stay behind if they have done minimum sales lead levels.”

Still other staff told The Mirror this about the pressure to sell:

“The bank puts huge pressure on staff to sell these [packaged] accounts.”

“If they don’t hit their sales targets they get disciplined. It’s really unfair.”

“It’s absurd to say they haven’t got these targets. It’s business as usual.”

Image source: Bloomberg.com

Lloyds’ chief Antonio Horta-Osorio said back in September that the bank was changing its tactics and added, “Banks have been focused too much on sales targets. We must re-cast the banking model.”  Directly after Horta-Osorio made this grand pronouncement, bank staff told The Sun:

“I’ve been here 25 years and the pressure now is horrendous.”

“This is the normal way of life — relentless bullying.”

I’m frankly thrilled that Lloyds has hired an external investigator, but here are my questions about this:

#1 Will Lloyds reveal the results of the investigation – if not to the public, at least to FSA or Office of Fair Trading?

#2 Will Lloyds act on the results, or is this more appeasement and lip service?

#3 Will employees be brave enough to speak to investigators or will they be too intimidated?

#4 Will other banks follow suit and be more vigilant about their selling tactics?

Image source: Guardian.co.uk

Banks have all promised to change their selling stance. They announced a bottom up approach that will never work. The banks beat their chests and bragged that they were cutting out sales-based commissions. Thing is, they didn’t cut out sales goals. That’s great for the banks – they can keep pushing staff to make sales but don’t have to pay any commissions. They also don’t seem to have changed how those that manage sales staff are compensated either.

I’ve written before that change at banks can’t come from the bottom up, it’s got to come from the top down. And it’s got to be more than words. Words flow like rain down the sides of Lloyds headquarters, real change must be handed down level by level and enforced every step of the way. Until Lloyds can do that, all the investigators and compensation plan changes and promises will mean nothing. If you’re sick of bank shenanigans, contact Empire Claims today to let your bank know you want your PPI refund and won’t tolerate their bad behaviour.

The post Lloyds Still Mis-Selling – Hires Firm to Investigate – Are They Too Broken To Fix? appeared first on Empire Claims Blog.

Image source: Telegraph.co.uk

A report released yesterday by the National Audit Office took aim at HM Revenue & Customs poor handling of taxpayer calls into its costly 0845 hotline numbers. While their assessment acknowledged that HMRC has improved since 2010 – its worst year ever – it spelled out that it had a long way to go to be satisfactory. We expect to pay taxes, but we don’t expect (or shouldn’t expect) that we will funnel money into charge lines to make required calls or to get the help we need to pay our taxes.

And while the report highlighted failures at HMRC to properly service customers, the NAO also said they likely underestimated the failures of HMRC because some calls are counted as answered even before they reach an adviser. The National Audit Office said, “We estimate that if HMRC improved performance to answer 90% of calls and reduced waiting times, it could save customers around £52 million a year.”

Image source: UK.Reuters.com

Here are some highlights from the report:

74% of calls were answered – This is not great, but well exceeded the low goal of 58% that had been set. The new goal is 90% of calls answered.

20 million calls were not answered – These were people that hung up while on hold, or could not get through to HMRC.

282 seconds average – This was the average wait time for callers who got through, but many couldn’t get through or had much longer waits.

The video cannot be shown at the moment. Please try again later.

10 minutes or more – This was how long 6.5 million callers in to HMRC had to wait to get a human on the line.

£33 million or more – This is the amount of call charges customers paid to sit on hold with HMRC.

£103 million or more – This is the amount of value HMRC assessed to customer’s time lost while on hold.

The report said: “Depending on the tariff they pay their phone company, customers are charged once their call is connected even if they are held in a queue.” Labour’s MP  Margaret Hodge of the Public Accounts Committee says, “When people have no choice but to contact the Revenue to discuss their tax affairs, I find it totally unacceptable that HMRC uses costly 0845 numbers and charges people for the privilege of waiting for the department to pick up. As the minutes tick by, the profits of HMRC’s phone service provider, Cable and Wireless, rack up as they pocket a proportion of customer call charges.”

Image source: Guardian.co.uk

It’s one thing to expect us to offer up our fair share of taxes – unlike Google, Amazon and Starbucks – but still another to charge us when we’re trying to do the right thing. A rep from HMRC said, “We are well aware that in the past we have not delivered the standard of service to which we are committed.” I agree. With our economy faltering and a triple-dip recession threatened, we can ill afford to hand over needless money to HMRC.

If you’re also tired of getting the runaround from your bank, contact Empire Claims for an assist with your PPI claim – we won’t charge you to call or leave you on hold – that’s a promise!

The post We Pay £136 Million To HMRC, Not In Taxes, But In Tolls appeared first on Empire Claims Blog.

Image source: Bloomberg.com

There’s a little known cash point secret that’s now blown wide open. Hundreds of thousands of us each year are walking away from the ATM without the cash we withdrew. If you get distracted, get a text or a call and don’t notice, we may leave our money there and wander away. After 30 seconds, the cash point inhales that cash back inside, but it wasn’t being refunded to customers as a matter of form. Despite the banks’ computers knowing who the cash belonged to, they kept it from unwitting customers – yet another example of casual fraud banks seem all too comfortable perpetrating…

Now Royal Bank of Scotland and NatWest are repaying more than 300,000 customers roughly £10 million in hijacked cash. The banks say they’ll write to customers who may have left money behind at an ATM and offer a refund. When customers request money, it is offered up via the little dispenser slot at the cash point – if you don’t grab it in less than half a minute, the machine takes it back. Banks call this a “cash retract.” They get the cash, you still have the debit on your account as if it were in your pocket.

Image source: Guardian.co.uk

Many consumers are taking RBS and NatWest to task for keeping this money, but a few voices have said we should view this as a positive report – a sign that things are changing for the better. I see this side of the argument. RBS and NatWest could well have hung on to the funds, and by coming clean they were risking a PR fiasco. It’s impressive that they have come clean and are making it right. I do see it as a step in the right direction and I hope any other banks that have made a policy of keeping forgotten funds will also balance the books with consumers. Plus, I really like Stephen Hester (RBS chair) and think he truly wants to do better and understands the failings of their past.

When you hear about ATM fraud, you assume it’s a cash claw arm attached by thieves grabbing your money – not your bank grabbing your money! To be fair, many banks have a policy to automatically credit your lost cash back to your account – no claim or complaint needed, but the RBS group (which includes NatWest) did not have a policy like this in place when these incidences occurred.

Image source: Mirror.co.uk

RBS and NatWest are also offering a goodwill interest payment as well as the amount of the cash itself. They will pay out the highest interest rates available to instant-access savings accounts on the day the cash was abandoned. If you’ve lost money to ATM neglect since 2011, RBS and NatWest automatically refunded it. But from 2011 back to 2005, hundreds of thousands of customers lost money and were never credited back.

I supposed we’ll have to take on faith if RBS and NatWest says we’re owed – how many of us are going to remember losing a couple of tenners at the cash point six years ago? If you do happen to recall that you were shorted, you can contact the banks. What’s important is that if you had an RBS or NatWest account where you used the ATM and have since closed the account and changed your address, you may want to proactively contact the bank to provide your updated address in case you’re owed. You don’t want the money to get lost again when it’s trying to get into your pocket, right?

Image source: Guardian.co.uk

And if you’ve lost out to banks over PPI, contact Empire Claims for help getting the maximum redress you’re due in the minimum amount of time!

The post £10 Million Due In ATM Refunds – Does NatWest or RBS Owe You? appeared first on Empire Claims Blog.

Image source: ComplianceX.com

As I reported last week, Libor rigging arrests are finally starting to roll in and I hope there are more to come. And now regulators in both the US and UK are prepping to hand out huge fines to RBS and UBS on both sides of the pond. Barclays rushed to an early settlement and was able to escape with just a £290 million fine, but RBS and UBS are facing much larger fines. RBS is expected to be fined £350 million or more and UBS is expected to pay more than Barclays and RBS combined – or roughly £625 million.

But here’s my concern – I don’t have a problem with the banks being punished for their bad behaviour, but is shunting money into the coffers of either government going to make it right for the investors who lost out when the rate was rigged? Many towns and cities, businesses and consumers that had loans or lines of credit tied to Libor may have overpaid on their loan installments or lost money in investments because of the banks’ finagling. Isn’t that where this money should go?

Image source: Guardian.co.uk

Perhaps you think banks should have to pay both enormous regulatory fines as well as compensation and damages. In principle, I agree. But the reality is, based on the size of these fines and the potential scale of damages, this could torpedo major banks. And when it comes to banks going under, it’s not the upper echelon bankers I care about, but all the front line staffers that could lose their jobs and the shareholders that would lose their investments. But what’s more likely is the banks wouldn’t go under, they’d be bailed out by the Government – which means you and me – and would hurt us all.

I admit that the banks need punished but why not assess reasonable penalties with some larger amount deferred to leave a provision for damages that can be drawn on without crashing the banks? Then they could pay the remainder off over a period of years after Libor damages to borrowers and investors are taken care of so that it doesn’t de-stabilise the banks. A gigantic lump sum fine may not be the best answer!

Image source: IndyBay.org

What I really want to see are more arrests rather than Governmental fines. The bankers, managers and traders that perpetrated Libor rigging won’t be dipping into their own pockets to pay these fines (or any damages) so what do they care? They may go on to find another batch of fraud to get into. But if the perps are arrested, that should put a hitch in a banker’s stride. If they know arrests are likely, that may slow them up and may be our best hope for a better future with banks we can trust.

Last week, three men were arrested in connection with Libor rigging – one from UBS and two from a broker firm. These look to be the first of many arrests (hopefully) as the Serious Fraud Office is still embroiled in its investigation. But American authorities are rumoured to be gearing up to arrest a handful of UBS bankers. Back at home, FSA is working on a plan to hit several UBS traders with lifetime bans against working in the industry. Hopefully both arrests and bans will be implemented to try and force better behaviour on our banks!

Click here to view the video on YouTube.

If you need assistance getting your bank to pay up on your PPI mis-selling claim – more bad bank behaviour – let Empire Claims help get you the maximum redress you’re due.

The post RBS and UBS Facing Massive Libor Fines In UK and US appeared first on Empire Claims Blog.