Onside Issue 1 - Spring/Summer 2014 - 18

ONSIDE / COMPANY PROFILE

Don't take no for an answer
While banks are admitting they are in the wrong and are starting to settle Swap claims, many are still
saying businesses don't need representation and advice to pursue their claims. The truth is, they do

my Cunningham deals with all
kinds of businesses who need
help standing up to banks.
She's heard stories that will make your
hair curl and, to be fair, some where
the banks have been quite reasonable.
But if she's learnt one lesson in the last
six months, it is that banks will try
and get clients to settle for too little,
too soon.
One of her clients - who is still
embroiled in a tricky situation with
RBS and has requested anonymity always enjoyed a good relationship
with his bank. Over the years he's
built up a successful construction,
development and house building
business. He well remembers that he
did so with the benefit of finance to
buy his first pieces of equipment.
When he was laying foundations
for building houses his local bank
was Williams and Glyn. One of his
neighbours was the manager.
Taking deposits, or providing
facilities, was never a problem as
the business grew and grew. Clients
included household names in the
housebuilding and construction
sector. He continued to bank with the
same relationship manager for more
than 20 years and during the course
of this relationship his two sons also
took on their lending facilities with
the same relationship manager.
It was on the basis of the long
standing supportive relationship he had
with his bank that in 2008 he acted
on the persistent advice of the Royal
Bank of Scotland and purchased three

swaps for his businesses. All after
he'd simply approached his relationship
manager requesting to refinance his
existing debt.
It wasn't until the financial markets
crashed that he became aware that the
swaps he had been sold could do
substantial damage to his cash flow
and ultimately the performance of his
businesses. He complained to the RBS
about the effects of the swaps and the
response was not overly helpful. In the
end the only solution the bank offered
was to provide new loans to cover the
break costs for the termination of
the swaps.
After receiving confirmation from
RBS that his swaps were to be included
in the FCA Review, he sent a complaint
to the bank with the help of his
accountant which provided a thorough

account of what had happened and
payments made. In August 2012 he
was invited to attend a verbal testimony
meeting with the Bank and it was at
this point he decided to seek the
representation of Seneca Banking after
little movement with RBS.
"I could have gone to barristers,
but Amy Cunningham and Daniel
Fallows really knew what they were
doing," he says.
As with many of Seneca clients he
had never heard of interest rate hedging
products prior to the bank's insistence
that swaps would be great products for
his businesses.
It's not an uncommon scenario, says
Amy Cunningham. "Like many of the
complaints we see the bank has failed
to disclose the necessary information
to discharge its duties under the
regulations which govern the bank
and its representatives. However, our
client's complaints are a prime example
of the bank's sales tactics at its worst.
He was chased by bank representatives
over the course of several months; even
after expressing numerous times that
he could not understand the products
and therefore was not comfortable
dealing with them. The information
provided was incredibly emotive and
manipulative and scare mongering and
put my client into a position where he
felt he could no longer say no," she says.
Seneca has now secured positive
outcomes for the whole family, but
there are still a number of unresolved
issues. The bank has admitted its sales
process fell short of regulations and

Since the start of 2014, Seneca Banking has successfully recovered over £10 million in cash of direct redress payments on behalf of
businesses that were mis-sold swaps. Each settlement was on a full redress basis (i.e. all additional interest payments back plus interest).
Call Seneca Banking Consultants on 01204 322 805 for a private consultation.

Table of Contents for the Digital Edition of Onside Issue 1 - Spring/Summer 2014