Episode 2 Rip Off Britain

We asked you to tell us who's left you feeling ripped-off

and you contacted us in your thousands by post, e-mail,

even stopping us on the streets, and the message couldn't be clearer.

I think there's a lot of hidden information about your bills

that should be made a lot more clear.

I don't feel I get treated how I should be.

You've told us with money tighter than ever

you need to be sure that every pound you spend is worth it.

How do I get my money back? I just think I'm entitled to it.

So, whether it's a deliberate rip-off, a simple mistake,

or a catch in the small print, we'll find out why it is

that you're out of pocket and what you can do about it.

Keep asking the questions, you know, go to the top if you have to.

We do get results, that's the interesting thing.

Your stories, your money.

This is Rip-Off Britain.

Hello and welcome to Rip-Off Britain,

where today we have the banks firmly in our sights.

A topic that this year has filled the headlines

as much as it has our postbag and our inbox.

It really isn't so long ago that the banks were among the most respected institutions around.

But as you know, times have definitely changed.

Although their reputation's taken quite a battering recently

it does seem that in some cases they've only got themselves to blame.

Of course, typically, it isn't one of those big financial scandals

the banks are embroiled in that you write to us about.

It's always those small, everyday scandals of their customer service

and you tell us about that all the time.

So a bit later in the programme we're going to be asking

just how it is the banks plan to win back much of that lost trust?

Also on Rip-Off Britain -

Why this woman's bank can't tell her what happened to the £25,000 she put there.

It's not been taken out, it's not been transferred.

It's not upstairs, it's not under the floorboards,

I've not spent it on a yacht.

It's still in the bank somewhere.

How thousands of family businesses have been pushed to the brink

because of what their banks talked them into.

I always had the attitude that if you went to the bank

you went for help, and you would get the best advice.

That seems to be something that's gone by-the-by.

And we hear your gripes about the nation's banks face to face.

Now, they do say that if you look after the pennies

then the pounds will look after themselves.

But I think most of us would like to think the pounds are looked after pretty well too

and certainly one of the best places that you can do that has always been the bank.

Well, certainly that's what Linda Bond thought

when she opened an account to keep her money secure.

And quite a large sum of money it was too.

So why is it that now it's no longer there?

And, just as importantly,

why can no-one at the bank tell her where it's gone?

Linda Bond has always believed that, like knitting.

money is made slowly one stitch at a time.

Mum and Dad worked all their life and they put money away

so when they died, obviously, they left it to us to be comfortable.

Linda wanted to carry on saving that money for when it was needed

so over three years, from 1996 to 1999,

she deposited a total of £25,000 into an account with the Abbey National.

We didn't need to spend the money

because we was both working at the time

and we was quite comfortable, so we thought we'd just use the money

that we got from our work and we'd just put it away for a rainy day.

Linda's bank book sat in her kitchen drawer for the next 11 years

until in December 2010,

the rainy day that she'd been waiting for arrived.

Linda and her husband decided to move house

and their thoughts quickly turned to the £25,000 in that account.

Deciding that the time was right to withdraw her cash,

Linda went to her local Santander branch in West Thurrock,

Santander Bank having taken over the Abbey National in 2004.

I went up to the lady, said,

right, you know, I need to take some money out.

When she went on the computer she said the account doesn't exist, it's closed.

Shocked and baffled, Linda asked to speak to the manager.

He couldn't tell her what had happened to the money either

and suggested that she contact head office.

Santander said that the account, it just doesn't exist,

they've closed it, and if I needed to take it further

that I should get in touch with the Financial Ombudsman.

But with no proof that she hadn't closed the account

that didn't clear things up either.

The Financial Ombudsman said that Santander has gone as far

as they can looking for the account

I just feel I'm knocking my head against the wall.

It's one thing to have no record of an account,

but obviously for Linda the main issue is, what's happened to her £25,000?

She can't understand why no-one,

especially the place where she left it, can tell her.

They're saying to me that I closed it down.

Right, if I closed it down, where is the proof that I did close it down?

You'd think that if Linda had closed the account

and withdrawn so much money, she might have remembered doing it.

And if she had taken out her £25,000, shouldn't the proof be here

in her account passbook?

After all, it says very clearly that no money can be withdrawn

without the passbook, which is in Linda's name only.

But the only recorded withdrawal was £583 back in 1999.

After that, the passbook seems to back up what Linda's said -

that there has been no activity on that account since.

So it's stalemate.

Linda says the bank must still have her money.

But the bank insists that it doesn't.

Unfortunately for Linda,

both Santander and the Financial Ombudsman say a passbook

does not prove that an account still exists

and it would have been possible to close the account without it,

using other suitable ID.

I've not taken the money out and put it into another account.

If I did, it would be in another account.

It's not upstairs, it's not under the floorboards,

I've not spent it on a yacht.

So how does Santander explain what has happened to Linda's £25,000?

Well, the bank told us that they...

They reiterate that the ruling was in their favour.

They suggest that as they can see Linda was sent annual tax statements up to the year 2000,

the account must have been closed over the next year.

The reason they can't be more definite about that

is because they are...

Like all banks, they only need to keep records

for six years after they've been closed.

And although six years of inactivity on an account

may result in it becoming what's called 'dormant',

in those circumstances they will still have records.

So they're confident that that is not what's happened here.

Which means the mystery remains unsolved.

Linda is equally confident that the account wasn't closed

and right now, she really could do with the money.

I don't know now, I don't know whether we can

if we want to be comfortable and retire,

whether we can actually do that and it is just not right.

I hope you know by now just how much we love getting your mail.

But amongst all the complaints that you've sent us about the banks this year,

this next one has simply got to be one of the worst.

Countless businesses have found themselves saddled

with costs of tens of thousands of pounds

and in many cases, sadly, face going under

thanks to something which the bank has talked them into.

the high street in the market town of Watton in Norfolk

has its share of struggling businesses.

But things are particularly bad for the family

that runs Adcock's electrical retail business - Adcock and Sons Ltd.

This is my great-grandfather, Ernest Adcock.

It's been a thriving business for four generations

but all that's changed.

The company at the moment is on its knees because the bank

that's supported us all these years has thought it wise

that we have this horrendous product.

The Adcocks' troubles are down to a financial product

Paul was sold five years ago by Barclays Capital,

the investment arm of the family's trusted bank.

Known as an interest rate swap, it was supposed to help him

if interest rates changed, a bit like a fixed rate mortgage does.

It was offered at a time when he'd taken out some extra loans to develop the business.

Whilst the expansion was under way

out of the blue almost we had a call from our relationship manager

that suggested we consider some kind of interest rate protection.

He declined the offer, but a year later

Barclay's Capital started to call again and again.

I sort of succumbed just, really, for not having the guts to say

sorry, I don't want it, I'm not interested,

because I didn't want to upset the bank.

But Paul didn't realize that he'd signed up to what was effectively a huge gamble

that interest rates wouldn't fall below a certain point

and if they did, what he'd pay would go up.

It's a bit like being sold a time bomb.

When interest rates started to go down,

suddenly we had this additional interest payment of about £2,000.

And from then on the super low interest rates

that the Bank of England engineered to support small businesses

had the opposite effect for Paul.

To date he's now paid over £188,000 on this product.

That's on top of the repayments on his original loan of £970,000.

The impact has been two members of long-term staff have had to go

because we simply couldn't afford to keep them on

which is very difficult in this kind of business.

It's thought around 40,000 small businesses

may have fallen foul of these interest rate swap products

which have been sold by all the big four banks.

Another one is this DIY Store in Cleveland,

run by Stephen Lilley and his daughter, Liz.

To purchase the shop in 2006, they took out loans for £425,000 with HSBC,

and the bank rang encouraging them to take out one of these interest rate swaps, too.

I said to him, before we accept any of these products you're offering,

I'd like to see something in writing

so I could present them to our accountant for further advice.

But the bank rang again and spoke to Stephen's daughter, Liz,

and in a brief conversation, she was sold the interest rate swap over the phone.

The conversation with him on the mobile phone

to commit the shop to a ten year base rate swap, was a three minute conversation.

The family only began to understand the implications

of what they'd ended up with once interest rates started to fall

and the extra charges kicked in.

So we started off, interest rates came down a little bit,

and we pay £200.

And now the interest rates have really dropped, we're paying £1,200.

In 2010, the family made a complaint of mis-selling

to the Financial Ombudsman Service.

They found in favour of the bank,

but the product has continued to have a disastrous effect.

Most weeks I work seven days a week and I just feel very bitter.

We've paid HSBC £50,000 towards this base rate swap so far.

We've laid-off staff, we've had to put back growth of the business

and development of new ideas.

At the beginning of last year, the bank told them there was a way out.

They could cancel the product by paying an extra fee. So, how much would that cost?

£49,000 if we want to buy ourselves out of the product.

Back in Norfolk, Paul's bank, Barclays, also told him

he could pay a fee to cancel.

But in his case that would be a hefty £224,000.

Neither of these families, and plenty of others

in the same boat can quite believe that their bank could have sold them

something so that's proved to be so catastrophic.

I always had the attitude that if you went to the bank

you went for help and you would get the best advice.

That's seems to be something that's gone by-the-by.

Last June, a review by the Financial Services Authority said it found

serious failings in the way all the major banks had sold these products.

The regulator said in many cases the banks failed to disclose

the costs of exit fees, sold swaps that weren't appropriate,

and didn't always ensure their customers understood the risks involved.

They also announced they'd reached agreement with Barclays, HSBC,

Lloyds and RBS over providing redress,

and that such products should no longer be marketed.

The review by the FSA doesn't mean automatic compensation,

but it does mean that cases like those of the families we spoke to will be looked at again.

Barclays, which sold the interest rate swap to

Paul Adcock for his electrical store, told us

they have an ongoing dialogue with him,

and when they receive approval from the FSA,

they'll start a review for all eligible customers,

starting with those in financial distress.

They say where they...

they'll put things right.

Meanwhile, HSBC told us it would be inappropriate to comment on Stephen and Liz's case

as it's...

They insist the family's complaint has already been fully

investigated and rejected by the Financial Ombudsman.

But, as part of the review,

they've agreed with the FSA they will review it again, and...

In the meantime, there's been a further glimmer of hope.

Until the reviews are complete, the families have had

further payments for their interest rate products frozen.

But while they wait for a final decision,

they are both exploring taking legal action.

I feel very bitter towards the bank.

'We're just very hopeful with the findings of the FSA on our side

that the bank will take a responsible attitude, and resolve that situation.

Because if they don't, there's no question that

the business won't be here, not even years, but in months.

Many other family firms fear the same thing,

but because of a product they were sold by their bank,

they too face shutting up shop forever.

Rip-Off Britain is on the road again.

Yes, thousands of you wrote to us with all your complaints

and your gripes and we thought the thing to do was to come up

and see what you had to say face to face.

What we've done, literally, is to transform a shop overnight

and we have put inside a whole team of experts,

so I think the best thing to do is for us to go in,

and see if we can get some of those problems sorted.

Personal finance expert Sarah Pennells is meeting Jill,

who thinks that her elderly father is being ripped-off by his bank

and wants to know if she can intervene on his behalf.

OK, so how much in all do you think he's been charged by the bank?

About £1,300 now over 18 months.

Having had a look your father's bank statements,

it definitely looks like the bank could've taken a step back

and tried to look at the overall situation

rather than just applying charges month in month out.

So what I would do is get back in touch with your father's bank

and tell them that you would like them to consider

to at least write-off a percentage of the charges they've already made.

If they don't agree, say that you want a final letter

and then go to the Financial Ombudsman Service

and they will look into the complaint for you.

I would recommend that you ask your father

if you can be added on as a second name

-so you become a joint account holder.

-Oh, that's a good idea.

In the longer term, it might be worth your while

taking out a power of attorney, your father taking out a power of attorney.

then you can not only deal with this bank account

-but other ones as well and any other bills.

-That's really good advice. Thank you.

Gloria, can I have you over here for a minute? We've got an interesting one.

You sound excited or worried. One or the other.

'Which? Magazine's money editor, James Daley,

'has been hearing about Anne and Terry's case.

'The couple have been accused of being dishonest by their bank

'after finding themselves the victims of credit card fraud.'

Three hotel stays in Cheltenham,

quite a long way from Bishop Auckland where they live.

You must have been shocked when you saw these rather large items on your credit card?

Yeah, I just couldn't believe it.

And they refunded it but then a few weeks later they wrote them a letter

and said we've had a look at these transactions

and we actually now think that you did carry them out

and we're going to take the money off your card again and it's £1,125.

They think that it hasn't been a fraud, it's been a genuine thing

that I've actually made the payment with my own card.

What the bank has done is they've gone back to the hotel,

they've got them to send through the details of these transactions.

But if you look at them closely here,

-what it actually says is customer not present.

-Oooh.

And so what that means is that these transactions have taken place

over the internet but there's absolutely no proof that Anne and Terry made that.

What kind of redress do they have in this case?

The best thing you can do is make a complaint to the bank.

Insist that they refund you first and investigate later.

If they still won't refund you, then you take that complaint on to the Financial Ombudsman Service.

'But Anne and Terry didn't have to take their complaint that far.

'Thanks to James's advice, they've since had the money

'they were wrongly accused of spending refunded by the bank.'

Next, an investment that really did seem to be a perfect opportunity

and it certainly did turn out to be life-changing,

but not at all in the way that was expected.

At 84, Margaret Sherborne should be enjoying her retirement in peace

but over the last five years, her quiet life has been disrupted

by the effects of an investment

that her bank recommended she take out.

I'm not money-minded.

I have no financial interest really,

but when Barclays said I should do something with this money,

I thought that was a good idea.

It never occurred to me not to trust them.

Margaret's financial situation first changed back in 2007.

Recently widowed out in Spain,

she made the decision to move back to a retirement village in the UK.

Margaret's plans would be funded from her life savings

and the sale of her Spanish property.

In total, she invested over £247,000,

which she put into her account with Barclays.

When Barclays saw that I had that much,

they said I really should be doing something different with it,

putting it somewhere else.

Barclays sent round a financial adviser,

who recommended she invest her money

in a scheme called Aviva's Global Balanced Income Fund.

'He told me it would bring me in about £5,000 a quarter.

'That, with my pensions,

'was going to be just about enough to pay the rent.

'I told the Barclays adviser that I didn't want a high risk'

but moderate risk I was prepared for,

in order to get a good return.

But I don't know much about these things.

I didn't then, and I don't now.

On the advice of the man from Barclays,

Margaret placed her entire life savings into their recommended fund,

And she did it because Barclays had themselves classed the fund as "unadventurous".

So on that advice, it seemed just the sort of investment Margaret needed,

unlikely to throw up any nasty surprises.

But from the off, it did not perform as expected.

'Each month, it had fallen by £10,000 or £20,000 and so on

'until December,'

when it had fallen so much,

it was really only worth half the money I'd put in,

I could see that I wasn't going to be able to stay here in the Hawthorns.

Margaret was far from being the only Barclays customer

to find herself in this predicament.

It turned out the bank had mis-classified the risk

not just on this fund, but on another one too.

In total, 12,000 Barclays customers,

most of them either retired or approaching retirement,

were finding that their investments

were a lot riskier than they'd been led to believe.

Between them, they'd invested a total of £692 million,

much of which, with the funds underperforming,

now appeared to be lost.

Barclays faces the biggest fine ever levied on a bank

for its dealings with high-street customers.

In January 2011, Barclays was fined £7.7 million

by the Financial Services Authority for mis-selling these funds.

The FSA said they should always have been described as high-risk

and shouldn't have been sold to older customers

who could ill afford the heavy losses the product caused.

For Margaret, this seemed good news.

She hoped she could reclaim some of the money she'd lost.

'When I realised how much money I'd lost,'

I contacted Barclays

and I asked if there could be compensation

because I didn't have enough.

Then I received a letter from them

saying they admitted they had wrongly advised me

but that I wasn't entitled to any compensation.

I don't get angry about these things

but yes, I was very upset

because I wasn't going to be able to stay here.

But then Margaret heard about a company called Claims,

which had already advised people stuck in the same situation

and when they contacted Barclays about her case,

the bank changed its tune.

'They offered £44,000

It didn't really cover the amount I had lost

but it would have put me on a much more even keel.

Claims didn't think Barclays was offering Margaret enough,

and after months more uncertainty, the Financial Ombudsman Service agreed.

In November, they ordered Barclays to pay back all of the money that

Margaret had lost through this fund - £63,315.

Barclays told us they are "sympathetic" to Margaret's situation,

and after a recent review, agreed the fund she was sold "was not suitable for her needs."

They say they've apologised, and offered compensation.

And though Margaret is delighted that she can now afford to stay in her home,

the whole business has caused her and other pensioners in the same position

a lot of unwelcome stress and worry.

I'd always been with Barclays all my life. 60 years at least.

I trusted them implicitly.

I wouldn't trust them again.

When you feel you've had a raw deal, it can be hard to know

what to do or where to turn.

So, to help you, we've put together a new booklet,

full of practical tips and advice.

You can download the free guide on our website...

Or, to receive a copy in the post,

send an A5 stamped and self-addressed envelope

to the address we'll give you at the end of the programme.

The summer of 2012 was full of scandal for British banks.

Hardly a week went by without them hitting the headlines,

and for all the wrong reasons.

Allegations of money-laundering, revelations of a global rate rigging scandal,

and in the RBS Group a computer glitch which left 17 million customers

without access to their cash.

So, is it any wonder that these once-respected institutions

seem to have become the villains of the high street?

I've got a few bob in the bank, but it makes no interest.

No interest at all,

yet they are still paying salaries which are outrageous, in my view.

They were too interested in selling us something rather than sorting the problem.

In my opinion, they are load of rogues.

They give you no confidence whatsoever.

I've not got the trust I used to have before in them.

So, what are the banks doing to try to rebuild trust?

We put that to Eric Leenders of the British Bankers Association,

which represents all the big high street names.

Mr Leenders, I don't think I have to tell you of all people that

the reputation of bankers in this country is now in tatters.

Is there, within the industry and within bankers,

a feeling at all of embarrassment or shame for that?

Absolutely. I've been in the industry now for some 30 years,

and I think this is a very, very difficult period indeed.

So when you go to a party and someone says, "What do you do for a living?"

Would you be embarrassed to admit, "I'm a banker"?

Well, I think it's very regretful that you would probably

think twice about admitting that you were a banker,

but what I would like to think is that I'm a banker who is trying to

make a difference and trying to change across the industry and restore that faith and trust.

How can you improve the image of a profession

which, as far as most people are concerned at the moment,

was very happy to pay themselves large salaries and large bonuses in the good times,

but then expect the consumer and the taxpayer to bail them out when things go wrong?

The way that we need to address that is to get back to serving customers well.

I think it's important that when you as a customer come to speak

to your banker you're confident that what they tell you,

the advice they give you, the products and services they offer work for you.

And I can assure you, there are a lot of people at all levels within the banks

that are determined to achieve that.

Here at Rip-Off Britain, we're always ready to investigate more of your stories.

You can write to us at...

Or send us an e-mail to...

Well, the banks' recent troubles seem to have been a bit of a wake-up call for them.

For too long some of them have taken for granted the fact that most customers,

once they have chosen their bank, tend to stick with the same one for life.

And that's usually because the whole idea of unpicking all those direct debits and standing orders

makes moving your account seem just that bit too difficult.

But in actual fact it's straightforward.

So, if you're not getting the service you deserve or want,

-then simply don't stand for it.

-And why should you?

Just switch somewhere else.

And there is evidence that more and more people are starting to do exactly that.

And you can find out how to do it on our website:

There's lots of useful advice.

But for now, that's all we've got time for today.

-Thanks once again for joining us, and we'll see you again very soon.

-Bye bye.

-Bye bye.

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