Barclays Capital - Rate swaps.

[Ronster1]

Can I suggest that everyone on this forum go and see their MP with all the relevant paperwork (and paperwork not provided such as ISDA Master Agreements etc) and ask that they take some action.

 

Examples of things to request include contacting the Commons Treasury select committee and Mark Hoban MP Financial Secretary to the Treasury re this issue. For those of us with complaints lodged with the Ombudsman ask your MP to contact them and request that he be kept informed of all developments. For those of us who have received less than satisfactory decisions from the Ombudsman (most of us I would think) ask him/her to contact them re their concerns over the obvious bias shown towards the banks.Ask them to contact the FSA demanding an inquiry into what appears to be mass mis-selling aimed at SME's across the country and across all sectors of the economy. One thing to impress upon your MP, most of us I would think have stopped spending due to financial restraints imposed by the swap, imagine that multiplied by all of us in this situation and how much money that has taken out of the economy at a time when the Govt wants us spending to get the recovery underway.The more of us that do this the more likely it is that Parliament will sit up and take notice and action taken. Thank you for your time

[Squeezed Dry]

Greetings all,

 

Its been a while since i last logged in. Seems the list of those affected grows ever longer.

 

I was one of the first to have my complaint heard by the FOS. It was a complete waste of time. I was basically told that i should have said NO to the deal. No sh1t sherlock!

 

Any way i guess i accepted my fate and have been struggling to make ends meet. Fortunately my businesses fortunes are improving so the repayments are becoming a little easier to find.

 

However, just as i begin to relax a little the good old boys of the RBS come riding back into town to give me another kicking. All of a sudden my accounts are switched from my normal run of the mill relationship manager to a specialised lending manager. The reason because they feel more exposed to a possible bad debt.

 

In essence what they have done is change the goal posts with regard to security on my loan deal. They have written down the values of my property by 60% of the 2007 value . In a nutshell i now don't have enough security to cover the outstanding debt plus the termination fee which is considered a liability.

 

Valuations are now going ahead ( at my cost ) which will determine the 2011 values. The bank will then use a magical and mystical calculation agent to determine that my security is 7/8ths of bugger all and come back to me for more security. If a fail to provide said security and/or personal guarantees then i am in default and in breach of contract. I will let the whole tower of cards come crashing down before i risk my family home.

 

I have never missed a single loan payment yet have never been in breach of either the loan or the rate swap. I am currently taking legal advice to see what can be done.

 

I feel that the bank is out to get me. May simply be coincidence, but since i rocked the boat they have breathing down my neck. I will let you know how things pan out.

[Squeezed Dry]

Google case BGH, XI ZR 33/10.

 

Would seem a precedent may have been set!!!

 

Anybody shed any more light on this ruling. The products discussed sounds similar in every respect to what we have been sold in UK.

[Ennill]

Update on my October 2010 posting on this thread.

 

Appealed FO decision, again FO find in favour of bank. Found a solicitor. Nothing heard from bank re payment of overdraft (I was beside myself with worry as to what the final amount due would be with interest added) so solicitor contacted the bank and a meeting arranged.

 

Meeting seemed to be a total waste of time, bank not moving on anything, repeating constantly that the FO found in their favour. Meeting ended abruptly as there seemed no point to it and bank informed that we would be taking the matter to court.

 

A week later solicitor receives a phone call from bank rep saying he would contact by a certain date with optons (??). He never gets back to the solicitor but I receive a phone call from the bank saying that they had decided to write off the outstanding overdraft and take no further action. I ask for this in writing as I really can't believe what I am hearing...... I now have it in writing, there are certain conditions of course re not taking further action which is acceptable.

 

Three years of hell, and it's now over. I hope it cheers you up - it seems they will push you to the limit - so be strong and never give up. I am still in total shock.

[slick132]

Hi Ennill,

 

Thanks for the update.

 

This is a very encouraging outcome for those who are tied into these bank products.

 

[all2lgain]

The Deutsche Bank ruling is indeed good news, it is probably the first time a European Court has ruled against a Bank.

 

I dont know if Deutsche Bank have appealed, probably not as they were a small player and their losses are sustainable.

 

To date, I still havent heard of a single FO decision going against a bank, I've spoked to solicitors and some of the emerging 'experts' who promise to fight for sufferers (at a cost...).

 

I know of one sufferer who has engaged sols. and it has taken best part of 2 years to get virtually nowhere.

 

Sorry to hear things are getting worse Barnsley, they really are evil EDITS.

 

A2G

Edited June 17, 2011 by slick132
Please refrain from swearing, thanks

[all2lgain]

Am I right in thinking that a post has been deleted - it looks like 42man is talking to me......

 

The FOS is a waste of time in relation to Rate Swaps, they view them as commercial deals by two equal parties, that will remain the case until a court case overturns the situation. So what we need is a single succesful court decision.

 

I'll repeat what I said earlier, I would love to hear from anyone who has had a mis-selling complaint upheld by the FOS.

 

A2G

[slick132]

HI All2,

 

Yes, some posts from a law firm were removed as they included contact details without the permission of Site Admin.

 

[tomb2100]

Hi All

 

Been reading with interest as we have a delightful SWAP with Lloyds whom we've been with for nearly 40 years.

 

Our main issue was the fact that they agreed to half our borrowing margin (in writing!!) when we signed our 1st SWAP, then when things get tough for them our margin is now back to where it was originally, all loans are now capital and interest, whilst we have to pay thousands out per month for the SWAP!!

 

Anyway we are waiting to hear back from our solicitors following a meeting with counsel yesterday. Its probably no surprise to add that most of the SWAPS were generally badly explained, unsuitable, used words such as recommendations etc etc but apparently its not easy to do much about that as we all have to sign the Treasury Master Agreement which absolves them of most things! We are a small family owned property co. EDIT

 

Anyway will post again when we get feedback from counsel

Edited August 21, 2011 by caro
Defamatory remark that could cause problems for the site

[xelo23]

Hello All,

 

Thought might be worth adding my thoughts on this topic, I am a ex Barclays Capital employee and worked in Interbank Derivatives Legal Documentation and have moved into Structured Derivatives trading now with a investment management firm I might be able to help shed some light on this or at least help and explain some of your 'rights' which maybe of use / interest.

 

But before that, I would say its a little ridiculous that Barclays Retail / Commercial would assist cross selling derivatives (albeit a vanilla product) without doing full due diligence and profiling of risk. Will point out some following ISDA facts for you to troll through if you feel like.

 

1. By ISDA provisions you (the buyer) of the swap are entitled to a full long form ISDA confirmation, and have the right to disagree / amend terms within that legally binding document.

2. If the swap is entered under your business name you have right to early termination (a early termination fee would be eligible)

3. You might want to ensure Barcap are discounting at OIS as opposed to LIBOR as OIS is the industry standard now for working out discount factors on cashflows and is a fairer comparison to the actual value of the trade as opposed to LIBOR calculations.

4. Might be worth finding out how the transaction is structured, if Barclays commercial enter the transaction on your behalf (meaning barclays commercial are the counterparty and not you / your business) it raises a lot of technicalities from a claim / complaint process

 

One key thing to note as these appear to be tied in with loans, the actual swap carries very minimal risk as with a typical (fixed for floating swap) the so called principal is not realised cash, but is only used as a basis of merely calculating the interest payments

Additionally in most cases at the fixing points, the cashflows are usually netted together and the difference is the actual and only transaction that takes place which from a banks perspective creates less risk on the traders books.

 

a small caveat to the termination fee, essentially if the swap remains until maturity you will have no further cashflows resulting in the trade having a realised value of '0' effectively. If you terminate early the price at current market value on cancellation point will have to be exchanged.

 

If you have further questions or interested in scenario examples, I am happy to plough through my bloomberg terminal and pull off any data that maybe of use to you. Not sure if this is helpful or I am just waffling, its late and my brain is half shut down so forgive me.

 

Thanks.

[grange1971]

Hi

 

I havent posted for a while, still watching with interest though.

 

Are you able to comment on bank completed paperwork if its sent to you?

 

Cheers

 

G.

[all2lgain]

Thanks for your input.

 

Its pretty much one of two issues that folks are complaining about,

 

Firstly (and this is the most common), cost to break the swap. A swap is fixed at 5% to 6%, based on the base rate. With the base rate currently 0.5%, the cost to break is also virtually 5% to 6%, over the length of the remaining period. Its a bit like trying to pay off a loan, and being asked to pay all of the remaining payments up front in order to exit the debt. This comes as a big surprise to the vast majority, which tells me that the banks dont highlight it enough, and that the banks are targeting small businesses who are naive in these matters - then hiding behind the very due-diligence you mention.

 

Secondly (less common, but seen a lot more this last year), banks are reviewing the loan to value ratio by adding outstanding loan and then potential breakage cost together (even if no break is being sought), and increasing fees, putting business into hands of 'recovery units' etc etc.

 

I note your thoughts on ISDA agreements, and agree that is what people are entitled to expect, but it isnt what has happened - in addition, where a counterparty (ie us, not the bank), requests a break, the banks are refusing, even when the ISDA agreement says they MUST break ie prepayments and counterpaty confirms a break is required. The FOS arent interested, its a commercial deal between two businesses, regardless of how large one is or small the other is.

 

In relation to due diligence and risk profiling, I have copies of the forms issued by the main player in these - an example to whet your appetite.........in a partnership, both partners required to sign according to bank rate swap paperwork, but only one does, second refuses pointblank and explains they do not understand the product and dont want it.

 

Bank carry out the swap, regardless of second partners wish not to (in interview the bank salesman even states they accept that the second partner did not understand or want the product.)

 

The FOS decision in relation to an unauthorised swap.......despite the bank failing to carry out a proper due diligence in relation to the unsigned authorisation, the partnerships normal cheque mandate only required one signature, so the bank did nothing wrong in accepting one signature in relation to the swap.

 

I've got loads of other examples, not just people caught out by the drop to 0.5% in base rates, but situations where the banks have used old-school boilerhouse selling techniques....all made possible, if not ethical, by the 2005 changes to the Act covering these products.

 

What I would like to find is a case of a private individual being sold one of these on a non-commercial basis, ie to support a domestic mortgage or similar, but thats what the banks due diligence is there for, to protect the bank from such a mis-selling complaint (no 'equal-party' status in that scenario!).

 

Dont be disheartened by my reply, its pleasant to have someone posting who isnt trying to sell a service (there are plenty of ex-bank folks about who suggest they might have the answer, for only a small fee......or solicitors who suggest that thay have mysteriously 'negotiated' a way out of the problem), we can never have too many people with inside knowledge, so welcome aboard our happy little ship!

 

Regards

 

A2G

Edited August 22, 2011 by all2lgain
Its been a long day....

[Madmountainman]

Hi xelo33

Please can you explain what you mean by discounting at OIS

thanks

[slick132]

Link to the Sky News story here - http://news.sky.com/home/business/article/16058908

 

It's suggested that Rate Swaps could be bigger for the banks than PPI !

[all2lgain]

I also saw the article - bit concerned as they mention investment professionals (these were included in the 2001 Act but this protection seemed to disappear with the 2005 Act).

 

Go back a couple of years - Barclays bucked the trend and posted multi billion profits - this was their windfall from selling swaps.

 

Madmountainman.....xelo means bank base rate (as published monthly) as opposed to Libor rate.

 

We need a precedent at court to start the avalanche (FOS will not support us, although interestingly in the sky news article HSBC say 'very few' complaints upheld by FOS.....i wasnt aware of any at all, hmmm wonder what the details of those are?)

 

Cheers

 

all2lgain

[all2lgain]

I'd like to add something in relation to due diligence.

 

the banks have to complete and 'Advice of Compliance' form in order to proceed with the swap.....for this they MUST have two things, firstly a signed FSA Risk Warning Notice signed by the counterparty (us!), and also a signed Bank Mandate.

 

The FSA Risk warning notice states that all counterparties should sign....but if the bank mandate says only one signature is needed, then the fos accept that as overiding the FSA Risk notice.

 

Paperwork is the crucial thing here - if you dont have either of the above, ask the bank to supply you copies to prove you signed them. Chances are they will do this without a data protection notice.

 

Cheers

 

A2G

[all2lgain]

Ps If anyone has a link to the 2005 FSMAct I'd appreciate it, cant find anything other than the 2001 Act, which isnt relevant.

 

Cheers

 

A2G

 

Okay, ignore above, here it is......http://www.legislation.gov.uk/uksi/2005/1529/contents/made

 

Now just need to read it.

Edited September 6, 2011 by all2lgain

[jmscs]

I had a booming business a year or so ago. I entered into a swap in 2007, since then the bank have revalued my properties, offered a partnership deal and eventually took them all away and sold them at an auction, and still want more money! I have just taken them to court. Will keep you posted.JC

[borisjames]

Hi Pete,

I read with interest some of your comments with interest.I have been moaning to RBS since 2009about the whole messy business and currently intend to do the FOS thing via a lawyer who has won several cases there,I might simulaneously go the much longer legal route which takes much longer nut of course there will be caselaw by the time it arrives in court.

I wondered if I might ask you for any update of the overall postion with these things and how folks are getting on with their battles and also wheter I might join an action / class action group perhaps.

Best wishes and thanks for any guidance James

[Cardinals]

Hi All

 

Whilst I accept that the FOS do not uphold every case I believe there have been at least three upholds this year.

 

Please bear in mind that the FOS was set up by statute (FSMA) and has a statutory obligation to consider the merits of a case against:

 

FSA Principles

FSA Rules (in this case COB or COBS)

What is fair and reasonable

 

I would bear that in mind the last point when framing a complaint to the FOS.

[anonbarcap]

Hi Guy & Girls

I am new to this site and came across it whilst I was doing some research into my problem

I have a structured collar with Barclays Capital can I just ask if someone can confirm this is what you are all talking about first as I think I may have some news that would interest you

Anon a Barclays Capital customer/mug

[Cardinals]

Hi Guy & Girls

I am new to this site and came across it whilst I was doing some research into my problem

I have a structured collar with Barclays Capital can I just ask if someone can confirm this is what you are all talking about first as I think I may have some news that would interest you

Anon a Barclays Capital customer/mug

 

Yep - this is your thread! I understand that barclays sold circa 50,000 of these products - tell us more.....

[anonbarcap]

cardinals i tried to send this to you as a private message but they say as i am new i cannot send it to you have checked it and i am happy to post it openly but we all need to be VERY careful Barclays are not takeing this laying down and they will stamp on any one that threatens them have no mistake about it

Hi not sure how this all works as I am new to the site I am a bar cap customer that is currently exposed at about 800k GBP I am dealing with 5 Colonnade at Canary Wharf and at full legal stage I was going to try FOS but clearly this is not going to work reading the other individuals what I am looking to do is to go legal

I am very concerned about Barclays ability to make it difficult for anyone that oversteps the mark I have already been sent to there ICU unit but they have returned me to branch a year latter although they tried to make my life very difficult

I am paying the Hedge and all loans in my personal name and I have sufficient assets at this time for it not to be an issue I also do not trade with Barclays only borrow so they have no ability to screw me on my trading accounts

I have today been to see RBS my principle bankers and raised significant funds to pursue the matter through the courts what I think however is if there was a small consortium that grouped together we could get Barclays to settle at the courts door step which is what they seem to have done in the past

I do not want to go into to much detail as I am conscious and mindful of there power and I know they will try to take any individual out that takes it to far but if there was say 20 individual accomplished business individuals that got together I think we could take them on and win

In point of fact I am certain

So what I am not sure of is how we all communicate through here I have set up a generic email address which I sent this from

Just to be clear I am serious I have assets at £9m borrowings on them at £4m and business turnover around £2.8m but they are I think too big for me on my own if we got together and put a “0” on the end of those numbers and went heavy with legal’s between us all they would fold

As I said earlier I want to be careful as I am not sure how this all works but I do have a sound plan

Anon Bar Cap Customer

[anonbarcap]

Can anyone explain how we communicate privately on this site I do not wish to break any site rules and the forum is great but these matters should I would think be able to be discussed privately between users with the same issues I just cannot see how you do it

Makes me look a bit stupid I suppose ??!!

[slick132]

Hi AnonBarCap and welcome to CAG

 

We encourage comms to be on visible forums for many reasons.

 

Off-thread, they are of no use to others who are seeking help.

 

So please continue to share your problem with others who are subscribed to this thread.

 

Thanks, Slick