Barclays Capital - Rate swaps.

[grange1971]

Edited as info out of date.

Edited December 8, 2009 by grange1971

[TBF]

I use to work for one of the major banks and I've always said that interest rate protection/hedging etc will be another case of mis selling.The Bank's make vast amounts of money on them and push them onto their clients

 

I am now a business finance consultant and have a client who has entered into a £300k SWAP over 20 years with Barclays Capital.This term would have been unheard of with my former employer and the amount would have been considered too small

 

I've mentioned the figures of this SWAP to senior bankers at other institutions and the looks on their faces say it all

 

Please keep me informed as I have another client for your proposed action

[grange1971]

TBF,

 

In my opinion, these products are not suitable for small investors at all, by small I mean less than a 2,000,000 or 3,000,000 hedge - if its less than this it should be ringing warning bells at the bank that their net has caught too small a fish.

 

The problem is that the banks (mainly Barclays, but HSBC as well) arent interested, for them a sale is a sale. I am fairly sure we have the start of a mis-selling scandal being uncovered, but getting the FOS and FSA moving has been very slow.

 

I am away for a couple of weeks - when I return I will get in touch.

 

Regards

 

Pete

[Squeezed Dry]

At last....a port in a storm!!

 

I have read this thread with interest and hopefully the fight is still on going.

 

I too have been stung but by Nat West.

 

I agreed to a 7 year rate swap October 2007.

 

I was contacted by the salesman because it was in my best interests.

 

I was sold a lemon by a manipulative salesman who used a load of "what if" scenarios to basically scare me into an agreement.

 

I didn't truly understand what i was getting myself into.

 

In real terms my rate swap is costing my company £8k a quarter and there is little i can do.

 

I was offered the option of breaking the agreement in December 2008. It was going to cost me £96k.

 

I have written to my MP and Mandelson wnd i have had replies but neither offered any solutions just political spin. But a response was a minor victory in itself.

 

My case is being heard by the Ombudsman as we speak. No news as yet. Unfortunately i think i rushed the complaint as there are issues in this thread i knew nothing about.

 

I am angry and frustrated!!! I made a bad decision , but i believe i was given just enough rope to hang myself with. I never asked for this product it was recommended by my business manager. It was never fully explained, but the reams of paperwork do cover the banks ass in every respect, but as usual you need a law degree to understand it. I actually refused the deal, but the persistent salesman kept coming back with the "sale of the century" scenario. I was manipulated and foolishly agreed.

 

Every dog has its day, and should i be unsuccesful on the mis sold route i will then go to the press and start a smear campaign.

 

The bank is morrally bankrupt and all credibility has gone. Once i am out of their clutches i will pull my accounts and go elsewhere. It is the only action i will have left.

 

Meanwhile my manufacturing company is 40% down on turnover, i have made 25% of the workforce redundant. I have drawn no salary for 9 months and i am on the verge of bankruptcy. The bank continues to squeeze me dry, safe in the knowledge that should i go under then they will have all the security of the assets and i will be left with nothing.

 

Words cannot describe the contempt i feel towards them.

[grange1971]

Edited as info out of date.

Edited December 8, 2009 by grange1971

[Castro55]

I have just come across this discussion; we are in a similar position to others on this forum we took out a rate swap agreement on a commercial property mortgage, for our business premises, on the recommendation of Barclays. The implications of this agreement were never made clear and when we approached them about early redemption we were met with silence. Finally after persistent enquires we were given a figure of over £50k.

Our issue also is that they have been unable to produce a signed copy of our agreement.

So far we have spoken to our solicitor (a small local firm) who believes we may have a case but the potential costs of taking this to court is putting us off.

I would be interested to know if anyone has had any success in challenging Barclays on this matter and if so what steps you took.

Thanks

[grange1971]

Edited as info out of date.

Edited December 8, 2009 by grange1971

[Squeezed Dry]

A few further points related to my case.

The Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 defines a solicited communication is one which

 

(a)was initiated by the recipient of the communication; or

(b)takes place in response to an express request from the recipient of the communication.

 

I neither initiated , nor requested the communication, so I deem it to be unsolicited and in breach of the afore mentioned Act.

 

As a director it would seem that i am in fact an "investment professional".

( However I would suggest that you don't come to me for advice)

 

It is worth noting that no where in the official agreement or the post transaction acknowledgement does it refer to this act. It is only after reading this thread that i discovered its existance.

 

The agreement clearly states that I should have signed the Financial Services Act: Money Market Regulation agreement provided by the bank prior to entering into this agreement. I do not recall signing such an agreement and I do not have any copy on file.

 

I also have my doubts that the agreement was signed in accordance with the bank mandate. I believe at the time that 2 signatories were required to sign in accordance with the mandate. Checking the agreement it would seem that only one signatory signed it. I am awaiting confirmation of this from the bank. Please confirm the ramifications of this.

[grange1971]

Edited as info out of date.

Edited December 8, 2009 by grange1971

[Squeezed Dry]

I have been through the banks complaint procedure.

Firstly they responded outside of the 8 week alloted time scale.The response was very polite and to the point. although i questioned nearly all of the points raised. Especially those relating to unsolicited communications and the sales tactics employed.

 

I requested telephone transcripts but i was refused. It is made very clear in the agreement that these are the property of RBS. I received a very abrupt email stating this fact.

[grange1971]

Edited as info out of date.

Edited December 8, 2009 by grange1971

[slick132]

Hi SqueezedDry,

 

Amend and use this to suit your needs - http://www.consumerforums.com/resources/templates-library/48-bank-templates/110--data-protection-act-1998-subject-access-request-

 

Enclose the £10 fee and use Rec'd Del'y or RM Spl Del'y.

[grange1971]

Edited as info out of date.

Edited December 8, 2009 by grange1971

[grange1971]

Squeezed Dry,

 

I had a read through the Act, and you are indeed correct - unsolicited phone calls (a 'real time' action) are not allowed. interesting angle on the mis-selling theme.

 

section 8 (1)(b) if my memory serves me - the one you highlighted.

 

If they cold-called you, a subject access record should produce the paper record relating to it.

 

Pm me with how your meeting went.

 

Cheers

 

Pete.

[grange1971]

Edited as info out of date.

Edited December 8, 2009 by grange1971

[Jon Yarley]

Hi Mark

We are in a very similar position with a liability of approximately £200,000, we have been going throught the FOS but this is very slow. Barclays are determined to firmly resist all misselling claims, but there is no doubt that we were sold a product that we did not require, ask for, understand and I can prove the I didn't understand it. Additionally we were pressured to sign just before going on holiday by our Account Manager and the "Treasury Advisor" from Barclays Capital. I am sure that lots of small businesses have been sold this product - this product should be for Investement Professionals! I am not an Investment Prefessional, why was I sold a Rate Swap when we indicated that we may be interested in a product to provide some protection against rising interest rates? This is a national scandal and no one is paying any attention! Any ideas on how to raise the profile of this problem?

 

Jon

Pete, just to confirm that we entered rate swap to hedge our interest on business loans. No problem with that and no problem that due to drop in interest rates that we are now paying out on this basis. However it was never explained that this created a potential liability i.e £800k? based over the life of the swap. The bank encouraged it as a move that was prudent,and reduced our interest rate on overdraft facility as a REWARD for being prudent. Bank manager and local director were made redundant on same day and now surprise, surprise we have a problem as this has created an issue with bank over "loan to value" to the business. Just for the record we have banked with Barclays for twenty years, we are solvent and still looking to expand even given the current difficult market. Surely we cannot be the only business that has experienced a problem as a result of being encouraged to be prudent by BARCLAYS CAPITAL!

 

Again i would confirm to all members that the issue is not that the interest rates have dropped, and that this requires the business to pay out. It is the clear fact that until our meeting this week with the bank no one and i mean no one ever explained the full extent of the liability that the interest rate swap created such a liability. I am certain that they did not fully understand what it was they encouraged us to commit to, the paper work on file makes no reference to the creation of any long term liability.

 

Can you confirm? (ISDA Master Agreement Based)....not familiar with this.

 

Thanks Mark

[grange1971]

Edited as info out of date.

Edited December 8, 2009 by grange1971

[grange1971]

Slightly off topic, but we've 3200 plus views on this thread, and we are currently ranked 1st,2nd,4th & 5th on Google for the search term 'Barclays Capital Rate Swaps'.

 

 

Pete.

Edited December 8, 2009 by grange1971
Info updated.

[slick132]

Hi Grange,

 

Our Webmaster does a great job for CAG, as regards internet prominence.

 

[leeby]

Evening everyone, I am a victim of being mis sold a barcap agreement. I was never sat down with anyone, just two phone calls from London, some emails of an excel spreadsheet. I want to pay off 500k and Barclays want to charge me 60k to break.

 

this was never mentioned to me at time of changing from Abbey to Barclays. My old business manager was boasting i made him 30k per year with other parts of my business included. nw i undrstand why! I have been reading many pages and links and obviously we can't all be daft, sp mis selling must be taking place, lack of shared information. I want to settle a deal after just two years, but 60 k above and beyond is too expensive.

 

Leeby

[grange1971]

Info updated.

Edited December 8, 2009 by grange1971

[leeby]

Hi Pete, The only item I signed was an email that I was asked to print and sign, No other documents have been signed, This is also as a sole trader not a director. And I have read all the documenst in hand and none of them advise me to take independant financial advise.

 

The emails received are addressed to Dear Sir/Madam, with the schedule.

 

I have sent my "subject access request" today, I have also got every email copy and letter on file. Thanks for your advise, really appreciated.

[leeby]

Peter, We are very tidy when it comes to email and paperwork, I have a file on Barclays. I have no such item as an Section 19 FSMA warning, plus was never told to seek have left me with no copy!

The only item I have that relates to the Barclays Capital is a "Rate Swap Confirmations" It consist of 5 pages with Blue, red and green fonts and a further 4 pages showing the payment plan (excel sheet). It does clearly state that "venue where trade was executed - OTC (Over the counter)" This is untrue as this was emailed to my office and printed. Probabaly not relevent.

Thanks

[grange1971]

Over the Counter is a banking type term for these products and how they are sold, dont worry unduly about it.

 

Confirmation document links in to an ISDA Master Agreement - does it say which edition (by year)?

 

Cheers

 

Pete

Edited December 8, 2009 by grange1971
Info updated.

[leeby]

Evening Pete, I have made a complaint via telephone, the response I received from the person on the telephone " I have no idea about rate swaps and there fore can not comment" I have sent my subject access request via recorded delivery with a cheque payable for 10.00.

 

I await a response. I do not have a master agreement, I have received two different emails from two different members of the Barcap team, both show identical attachments, nine pages, five of which are confirmation and the remaining four are excel sheets. luckily I feel the pages are stated 1/9 2/9 etc and a reference number appears on the footer of each page. which would indicate no other links to other documents. If I had a master agreement it would be in my filing system. I keep everything. Once I have more data I will pm you. for the record, I think we had a conversation at weekend on anaother consumer website. Thank you for your support, Appreciated.