SME MIS-SELLING: 10% of all SME loans fraudulent, RBS has 28% of market, other banks admitting guilt….

…but Downing Street is silent.

Osborne….what’s he going to do about this?

As the Telegraph reports this morning, the merged Clydesdale and Yorkshire Banks have circulated business customers, saying they will look at the sale of fixed-rate loans to small businesses as part of the current industry review into the mis-sale of interest rate swaps as supposed loan hedges.

They said the review would involve the notorious TBLs [tailored business loans] in a move that the Barclaygraph thinks must ‘put the pressure on other banks to take similar steps’.

The Slog has been focusing for some time on interest rate swaps as sold by RBS and other leading banks.

It is now estimated by the FSA that a staggering 40,000 interest rate swaps  have been sold to small businesses. Although often seen as a small sector in real terms, the opposite is true: over four and a half million companies in the UK employ under ten people, and the sector in total turns over £1.5trillion, accounting for 60% of all private sector employment.

Considering the way banks treat them, however, a surprisingly small percentage of SMEs use banks to raise money. This coupled with the banks’ immediate decision to cut off money supply to small businesses in the 2008-10 period produces a percentage figure for 2011 estimated at around 10% of entrepreneurs using  bank loans.

The means almost 10% of all SMEs who took out bank loans were mis-sold.

Entrepreneurs are at the heart of Britain’s future, and absolutely key to our recovery at some point. Yet here are the banks defrauding them at an obscene level….and Draper Osborne has nothing to say.

Take in this cracker from the RBS website:

‘We are committed to supporting enterprise, and in the UK we provide banking services to SME customers accounting for about 25% of the SME market. Each year we help many thousands of people to start new businesses and support many more who want to see their business grow. In challenging economic circumstances this assistance is even more vital and we place great importance on activities that stimulate economic growth. Our Specialised Relationship Managers work with stressed businesses with the aim of bringing them back to a mainstream banking relationship. In 2011 this was achieved for over 4,400 business in the UK.’

Deception and distortion at its best. This is rather closer to the truth:

‘The Royal Bank of Scotland was accused of “trying to fool people” over its lending record, by citing a controversial little-known target that it claims to have met – despite being understood to have missed the government’s benchmark measure….Bank of England data on Monday is expected to confirm that five banks, including RBS, together fell £1.1bn short of a £76bn lending commitment to small and mid-sized enterprises (SME).’

By its own measure of customers, however, it looks like roughly 25% of the mis-selling problem is down to RBS. Over the period, this taxpayer-owned bank has lied to the Bank of England, lied to potential customers online, cheated existing SME customers, and required direct Treasury input even to lower the rate at which it lends to small business.

Effectively, Stephen Hester’s Rogered Bowel Syndrome is a protectorate run by the Treasury, and Treasury behaviour is, in turn, the responsibility of the Chancellor, George Pipsqueak Gideon (dec) Oliver Cynthia St John Osborne the Little.

Isn’t it about time Bullingdon Man said something? Even better, did something?

Get the full odour of RBS malfeasance at Pester Hester


29 thoughts on “SME MIS-SELLING: 10% of all SME loans fraudulent, RBS has 28% of market, other banks admitting guilt….

  1. Chancer Oddspawn is too busy trying to rehypothecate the chances of his governmint’s survival to concern himself with the activities of the Robber Baron Syndicate; David Cameltongue may, or may not, have the hump but carries on spitting sand in any case.


  2. If each of these small companies could take on one extra person unemployment/state finances could be sorted out. And I’ve rarely seen a small place that couldn’t find work for one extra person.
    The finance sector rules the roost and until that is sorted we’re going nowhere.
    Interesting link
    The fact that it’s not being dismissed out of hand is significant I think.


  3. Good article about the banks by Liam Halligan in the Mailygraph.

    Time to do an Iceland and bring them into public ownership and wind up the tut. Nearly all are insolvent so we need to start from scratch with numerous smaller banks like Metro Bank.

    Still, they will kick the can down the road and we end of with a Germany 1932 scenario.


  4. The banks rule. So, Gideon will have to do and say just what he is told. That’s why he has said nothing so far, he hasn’t been given leave to speak on the matter yet, let alone any spin to put on it.


  5. To be quite honest with you, when lending regulations in the UK are almost as slack as those in the US … what can you expect?

    Remember that in the UK with tightened regulations, it was claimed that nearly 50% of mortgages issued had had a credit check performed.

    I repeat: nearly 50% of mortgages issued had had a credit check performed.

    For those who are still waking up, that is nearly half.

    In other words, half did not!.

    Bear in mind that in the Netherlands, Germany or Sweden it is hard to get a SIM only contract for your mobile without a credit check. Let alone buy an entire house.

    Is it any wonder that a bank will get up to fraudulent lending when allowed the opportunity to do so???? After all, this was the problem in the Eurozone: banks couldn’t lend in Germany, and could do so in countries with loose regulations. They needed to make a profit, they did so.


  6. Gemma.
    I not even sure they do any checks for mobile phone contracts here, well certainly not on the youth, most I know wouldn’t qualify for credit yet have a contract mobile phone. My own Son was sold a contract when he was only 17!


  7. @Gemz: ‘They needed to make a profit, they did so.’ Except, of course, they didn’t because the profit thingy only happens if the debtor is good for the repayment. This is the pterodactyl in the ointment.. :(


  8. Hieronimo

    that is why you have a credit check! If Germany can do it … (oh, dear!).

    It is an essential ingredient of banking regulations – otherwise the banks go into a frenzy of lending. Just as they did in those areas with loose banking regulations – the US, UK, Spain and Greece.


  9. KFC

    to be honest, the problem is not with mobile phones, but mortgages.

    Lending as recklessly in the amounts they did was – and is – a very real danger.

    The point about mobile phones was to emphasize just how strict those regulations are in Germany and other places.


  10. Robin

    that was exactly the point I was making! The issue is not that they got into trouble but where they got into trouble. Either it was dabbling in the ultra-loose US housing market where you could get a homeloan for the pigeons in your pigeonloft or in Greece where you could borrow money to build a bridge that somehow never materialized.


  11. I will add that you are right when you say that we are all in this together. The point I have stressed since I joined this comment forum is that one of the more sensible things to do is improve banking regulation! Without this, the banks will get into another lending frenzy and we will be back at square one!


  12. Pingback: John Ward – SME Mis-Selling : 10% Of All SME Loans Fraudulent, RBS Has 28% Of Market, Other Banks Admitting Guilt… But Downing Street Is Silent – 22 October 2012 | Lucas 2012 Infos

  13. A little while back we had self-certification, which basically meant that you just told them you earnt as much money as you needed to to obtain the required mortgage! What a scam!


  14. Unfortunately, all of the above is correct, but the City has run England, and then the UK for Centuries, probably always will.

    That is why the Citizens were forced to bail out the Bankrupt Banks and other Financial Institutions in 2008 and were allowed to take on hookey loans leading upto it.

    Then again that is how the City works, If it loses money and is essential, Nationalise it, if it makes money and is owned by the State, Privatise it. Those with long memories, remember Rolls Royce and British Aero Space. Nothing new, accept this time it was the Banks etc.

    The Political classes had their chance in, 2008, to start afresh and let the money makers/profiteers lose their shirts. But they are ALL owned and paid for.

    Democracy, is just a myth and MSM is just a myth-teller, to keep the great unwashed happy and asleep bettween elections.

    Sorry JW, about my rant, but i am 60% through, Sir Winston Churchills,
    “A History of the English Speaking Peoples”. I believe it should be taught in every 6th form College, or Banned. If an Oldie reads it, it can cause a rise in your blood pressure for you to learn just how naive you have been.


  15. KFC

    which was as useful as regulation as a chocolate teapot is when entertaining guests to tea.

    Hang on a minute … I am sure my guests would love that …

    This is the essence of the problem that you raise: the regulation was insufficient. It meant being able to keep the plates spinning for a little while longer whilst ensuring that there were more of them to fall when they do.


  16. Credit was also irresponsibly encouraged by politicians. Perpetual growth being the holy grail. GDP, bond rates, shares, assets, balance sheets, paper profit, grotesque salaries, not to mention golden hellos, ridiculous bonuses, golden parachutes and severance deals for the criminally insane.
    And let’s not forget, backhanders, donations, lobbying, revolving door and a seat on the board old friend.
    That said, all we had to do was say “no” and follow the sage advice from our parents and grandparents. Neither a lender nor borrower be. If something is worth having its worth saving (sacrificing)for.
    Hands up everyone who got suckered into multiple credit cards, bank loans, car loans (new car every 3 years), mortgages on introductory rates.
    Generalising I know, but as a nation, we need to do a little soul searching. When times were good we didn’t give a flying fig about bankers behaviour or bonuses.


  17. I have been a successful entrepreneur and an employer of many and varied amounts of people for about 30 years. My payroll varied from 4 up to 60 staff at the maximum, spread over several manufacturing sites.
    Since I disposed of my last business, I have been selling varied bits of redundant machinery and equipment on Ebay and elsewhere, whilst I plan my next business adventure.. This has meant that I am visited by customers from all and sundry small manufacturing businesses whilst they come to collect their purchases.
    I thoroughly enjoy engaging them in conversation, and one by one, they all said the same thing about their business. Cameron, take note!!!!

    Each one of them said, quite categorically, “I WILL NEVER EMPLOY ANYONE ELSE AGAIN.”

    Their reason was always the same. They had downsized from a larger SME business to a solo operation because of all the headaches of employment law Health and Safety regulations, Equality bullshit, union interference, evil banks, and every bit of red tape which the government throw on them.
    For this exact same reason, I also am unlikely to employ anyone ever again. My decision, like theirs, is to sub contract out any work I can’t do myself. Like them, I shall remain a lone worker and in that way I can tell all these jobsworth morons to depart forthwith from my workshop. My overheads are now microscopic in comparison, and I don’t have to answer to ignorant local council morons. I don’t have to worry about anyone fleecing me by getting pregnant etc.
    If my experience is typical, the cost of countless SMEs refusing to employ anyone again is catastrophic for this nation.
    The small business owner is rarely protected in any way. When I started, my wife and I together, took home far less pay than my lowest paid worker. The house was re-mortgaged to the hilt to enable the whole show to operate. Nobody would sympathise if it had gone wrong, we would be just another greedy employer who got his just deserts.
    No government ever created a single job. They only create toilets into which money can be poured. It is the SME which, if unleashed from their chains, can turn this country around, not Whitehall.


  18. Bemused, I think you’ll find those that did have concerns were labelled as spoilsports, loonies or some sort of ‘phobe’. Malthus in the 17 hundreds was smart enough to see endless growth was asking for trouble, I bet he wasn’t popular…….


  19. …Each one of them said, quite categorically, “I WILL NEVER EMPLOY ANYONE ELSE AGAIN.”…

    …Cameron, take note!!!! …

    Well spoken, Bob H.


  20. I can understand the difficulties SME businesses face.
    I worked for local government many years ago. They employed a new female manager for one of the departments. Within a couple of months of her starting, she announced she was pregnant. Within a couple of months of her return from maternity leave, she was pregnant again. And again. Nobody dared suggest she leave.
    Within the 3 years she was on the books, she had 3 children and we rarely saw her.
    The cost of paying people to ‘act up’ into her managerial job, of shifting additional work to other employees, and employing temps further down the line, was horrendous.
    She left after the 3rd child and everyone breathed a sigh of relief.
    What this would do so a small business, I hate to think. Bankruptcy probably! There must be a better way . . . .


  21. …Neither a lender nor borrower be….

    Bemused, I think it’s an age thing. It’s one of the maxims that my Grandfather taught me, which I have stuck to throughout my life. I think it’s time to bring the old adages back, to be taught in our junior schools, since modern-day parents don’t seem to have heard of any of them.


  22. RBS went from net assets of £88 billion to net liabilities of £1.3 trillion. that loss is being passed on the the UK taxpayers, no investigation into where that wealth disappeared to. A large amount of the UK’s gold was sold at the lowest prices to bailout out AIG/Rothschilds. The bailouts of the banks were necessary we are told because else they would go bankrupt. but smiple maths tells me this is garbage, RBS might be leveraged 30 times. so for every £1 on deposit they were OWED £30. so how could they be bankrupt ? I believe criminals have plundered the UK just like they plundered Iraq latin america. they have accomplices in the media and government. Read ” The Economic Hitman”


  23. @Bob H
    “For this exact same reason, I also am unlikely to employ anyone ever again. …”

    I feel for you, but think you’ve discovered something perhaps substantial for other entrepreneurs. Namely, since this red-tape / regulations-up-a**e regime is real, and is a true impediment to many as your informal polling attests, why not a business that does all the red-tape for businesses? Yes, somebody somewhere can open up an efficient shop filing all this crap and monitoring it for SME like the one’s you and your ebay mates have had (but no longer feel like doing, since it is picayune bother). These sorts of firms must exist given the need. But they’d have to be separated from accounts receivable else they would pay anything coming across their desks. This last little trick is a bigger part of the whole galactic orgy of mega-thievery than most people care to mention. The boss tells the secretary to pay all sorts of petty bills because inquiry has been made impossible to all but those supremely wired in. The billers catch on and pad the bills. Then these practices hit the consumer level, and everyone starts paying for things they never quite checked into but assume must be OK.


  24. While a few continue to gain wealth while the country slips ever further down the league table of wealthy nation this does not matter to the cosy cabal of bankers and politicians at the top. This shell game/find-the-lady leaves everyone else worse off.

    One key thing to note is the mortal dread in their faces as they all have not the foggiest idea of how to keep the current corrupt game in play while it teeters ever closer to the edge of the abyss. The markets are rigged but these wild oscillations with extreme gain one day and loses the next bodes ill.

    This is potentially a worse Depression than the long Depression of 1873 perhaps even the South Sea Bubble itself. More corruption and lies are being used as a blatant policy tools where the only solution by the criminal elites is more of the same medicine of dishonesty and fraud. These are on such a grand scale that few can grasp what is happening. George Osborne has the choice of saving the system as it currently stands or see substantial numbers of the Conservative hierarchy together with vast swathes of the City of London locked away in prison. Osborne has no political death wise and so he will pour ever larger sums of our money into coffers of fools, liars and criminals.

    The Chancellor must know that RBS is ripping off their customers but the view must be that this is saving the Treasury from further bailouts. The FSA, Bank of England and the Treasury will look the other way and then wring their hands in public anguish when a financial journalist finally can be arsed to report on this fraud. Note none of the journos have even picked up on the awfully convenient computer problems in RBS’ favour. The cover story was bought hook line and sinker. They too do not want to be the ones to bring the entire edifice crashing down as who is going to thank them for telling the truth while we stand ankle deep in the rubble. This is another Jimmy Saville moment where all can see the extent of the problem but no one wants to be the brave suicidal idiot to point out the truth out to the world.

    The laughably absurd thing is that many expect something different from Labour if they were to become the government after 2015.


  25. Wow, reading your text I couldn’t agree more….I am also another of these greedy businessmen who risked everything in the early days and yet whose staff thought it was ok to steal from at every oportunity, well never again I got rid of most of them and I’m now much happier for it.


  26. I had dealt with the RBS for over ten years, in the good days it was the best, until you asked for an interest only period. That request triggered a host of people ultimately trying to squeeze you into a deal only beneficial to the RBS.

    The gist is simply that if you wanted a capital break (whilst paying interest only) then you would have to agree to a new agreement on all loans, attracting a 2% arrangement fee every six months and then a doubling of interest in some cases even more.

    This I was told was to bring the borrowing rates in line with what the banks were paying. I refused this financial suicide decision, later to find my loans being called in, although some were in credit and most up to date. When questioned about whether then Government knew that RBS were presenting figures that were artificial and produced to satisfy evidence (although artificial) of the increased borrowing to the SME, the reply was “yes”.

    In essence if you had borrowed say 500K, then the RBS would re-lend that amount twice per annum, thus showing that it had supported my business by 1M per annum, when in real terms it had lent me absolutely nothing (save for the original loan); thus charging 20K arrangement fees plus double and sometimes more interest. Of course following the first anniversary those arrangement fees would increase.

    The Governments awareness was accepted in writing by the bank as I gave them the opportunity to rebut the presumption. Frankly the RBS is amongst the worst of the High Street banks and yet the Financial Ombudsman do not have the fortitude or experience to tackle the problem often finding in the banks favour, when there are clear legal issue amiss and the ineptness of the RBS is clear to most lawyers. It is about time the Ombudsman did its job and also Government looked closely into this issue as clearly it is forcing SME’s to desperation as well as closure thus increasing the ever desperate job situation, whilst the banks pay themselves lavish bonuses.


  27. Pingback: GUILTY BANK FRAUDSTERS: ‘Setting aside’ moves on to ‘facing difficult truths’. | The Slog.

  28. Pingback: John Ward – Guilty Bank Fraudsters: ‘Setting Aside’ Moves On To ‘Facing Difficult Truths’ – 28 November 2013 | Lucas 2012 Infos

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