Episode 11 Rip Off Britain


Episode 11

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

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

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

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

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that should be made a lot more clear.

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

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You've told us with money tighter than ever

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

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

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

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

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

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

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

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Your stories, your money.

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This is Rip-Off Britain.

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Hello and welcome to Rip-Off Britain,

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where today we have the banks firmly in our sights.

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A topic that this year has filled the headlines

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as much as it has our postbag and our inbox.

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

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But as you know, times have definitely changed.

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Although their reputation's taken quite a battering recently

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

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

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

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

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and you tell us about that all the time.

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

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

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Also on Rip-Off Britain -

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

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

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

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I've not spent it on a yacht.

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It's still in the bank somewhere.

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How thousands of family businesses have been pushed to the brink

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because of what their banks talked them into.

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

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

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

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

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

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then the pounds will look after themselves.

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

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

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Well, certainly that's what Linda Bond thought

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when she opened an account to keep her money secure.

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And quite a large sum of money it was too.

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

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And, just as importantly,

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

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Linda Bond has always believed that, like knitting.

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money is made slowly one stitch at a time.

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

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

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

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so over three years, from 1996 to 1999,

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

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We didn't need to spend the money

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because we was both working at the time

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

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

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

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until in December 2010,

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

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Linda and her husband decided to move house

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

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Deciding that the time was right to withdraw her cash,

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Linda went to her local Santander branch in West Thurrock,

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Santander Bank having taken over the Abbey National in 2004.

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I went up to the lady, said,

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

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

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

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but the news was no better.

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

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and suggested that she contact head office.

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When she did they confirmed what she'd already been told.

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

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they've closed it.

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And I wasn't very happy with that and if I needed to take it further

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that I should get in touch with the Financial Ombudsman

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So that's what she did.

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

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that didn't clear things up either.

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The Financial Ombudsman said that Santander has gone as far

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as they can looking for the account and the Financial Ombudsman

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just took what they said and said that's it, can't go any further.

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

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

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

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She can't understand why no-one,

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

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

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

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

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it's still in the bank somewhere.

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You'd think that if, at any stage, Linda had closed the account

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

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

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in her account passbook?

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

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

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

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

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that there has been no activity on that account since.

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There's certainly nothing to suggest that it was closed.

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So it's stalemate.

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Linda says the bank must still have her money.

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But the bank insists that it doesn't.

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They can't prove to me where it's gone to

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because they don't know where the money's gone themselves.

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They just said that I possibly could have taken it out

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or transferred it, but I can't, cos it's in the book.

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Unfortunately for Linda,

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both Santander and the Financial Ombudsman say a passbook

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does not prove that an account still exists

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

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using other suitable ID.

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

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If I did, it would be in another account.

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In black and white it would actually say, right,

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that's been put into that account, that's been put into that account.

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

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I've not spent it on a yacht.

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This isn't the first time that Rip-Off Britain's been asked

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to look into a missing Santander account.

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Last year, we met Margaret and Brian Mitchell

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who were in a very similar position.

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We got a letter back which more or less tells me

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that the money's not ours.

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We don't own it any more, we have nothing to do with it.

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12 months on, Margaret and Brian are no closer to having things resolved

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although Santander say they will look at the case again

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if the couple find any additional information that helps them trace the account.

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So what does the bank have to say about Linda's case

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and what happened to her £25,000?

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Well, Santander have told us that they...

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They reiterate that the ruling was in their favour.

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

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the account must have been closed over the next year.

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The reason they can't be more definite about that

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is because they are...

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Like all banks, they only need to keep records

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for six years after they've been closed.

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And although six years of inactivity on an account

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

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in those circumstances they will still have records.

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

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Which means the mystery remains unsolved.

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Linda is equally confident that the account wasn't closed

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

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We hoped to give our granddaughter some money

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because she's going to college in the next couple of weeks,

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to help her along obviously.

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

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if we want to be comfortable and retire,

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

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If you've found yourself in a situation where,

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for whatever reason, you can't retrieve your bank account

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or the money that's in it,

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here's Kevin Mountford from MoneySupermarket

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with some essential information on what you can do.

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Back in 2008, the industry set up a website mylostaccount.org

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and this is the first port of call

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if you want to be married up with your lost account.

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Bear in mind an application through this is free of charge.

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£175 million has actually been given back to the rightful owner

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so it is certainly worth making that effort.

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It's believed there's about 150 million accounts

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in circulation in the UK and about half a million of these

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could be dormant so if you want a chance of matching up these accounts

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it's imperative you provide as much information as possible.

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So if there is a sort code, an account number,

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an account type or even a pass book, if you've got that information

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make sure it's part of the submission.

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One thing to consider with these dormant accounts

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in noting how long that they've been around, there is a chance

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the account could have been opened in a different name,

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particularly if you've been married or divorced.

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They could have been opened by parents or grandparents.

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So consider that when you make an application

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and it might be their names that you need to submit.

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In your efforts to try and chase down a dormant account

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no doubt there will be companies claiming they can do this for you

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but bear in mind there are proven routes to getting matched up to your account

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and they are free of charge, that's the important thing.

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Either go to the website or go to your bank or building society

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but do not pay a fee.

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Now that we've seen the launch of the Big Society

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and the monies from dormant accounts have been put to good use,

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that doesn't mean it's lost forever, you always have the rights to access

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these accounts as long as you can prove you are the rightful owner.

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It's not just the reputation of our banks that's been transformed in recent years.

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The way we bank is now completely different from the days

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when a handshake from your local branch manager

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was all you needed to be sure your finances were being looked after.

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Today, many of us have our only contact with the bank

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through machines, disembodied voices or even our own computer screen.

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While that changed relationship isn't the cause of the bank's problems

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it may explain why there aren't more people rushing to their defence.

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It's been a summer of scandal for British banks.

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Hardly a week went by without them hitting the headlines

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and for all the wrong reasons.

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From allegations of money laundering

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to revelations of a global rate-rigging scandal.

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The Deputy Governor of the Bank of England

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compared parts of the industry to a 'cesspit'.

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So when you add to all of that to the ongoing debate

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over bosses' bonuses, and the continuing concern

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over mis-sold payment protection insurance,

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is it any wonder that these once respected institutions

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seem to have become the villains of the High Street?

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

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no interest at all, yet they're still paying salaries

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which are outrageous in my view.

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

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I'm of the opinion that they're a load of rogues.

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They give you no confidence whatsoever.

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

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They're not interested in you, they're just interested in their bank

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and you putting in their bank, that's all.

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Perhaps the biggest banking scandal to instantly affect customers came in June.

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17 million people were left without access to their cash

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after a computer glitch left the RBS Group,

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which takes in the Royal Bank of Scotland, NatWest and Ulster Bank,

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unable to send or receive payments between customers' accounts.

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For one long week, businesses right across the country ground to a halt,

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mortgages didn't get paid, and families were forced to borrow cash just to buy food.

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The banks were forced to say sorry.

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The computer meltdown was, of course, a bad period

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and, I did then and I do again, apologise to our customers who were affected.

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The banks moved quickly to try and put things right

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with extended opening hours into the night

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and over the weekend to help clear the backlog.

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But while the problems were sorted relatively quickly

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at the NatWest and the Royal Bank of Scotland,

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at the Ulster Bank things dragged on quite a lot longer.

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And our next story shows the impact that had on ordinary families.

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After months of saving, Eoghan McElhinney and a group of mates

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from County Derry were gearing up for the holiday of a lifetime.

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It was planned for months before, we just couldn't wait.

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We were just so excited, first lads' holiday, no parents, nothing.

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We booked it about three, four months before we went.

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We were saving, talking about it all the time,

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really excited about getting away for a week.

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No problems or nothing just a bit of a craic of a week.

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And across the Irish Sea in Edinburgh,

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although he didn't know it yet, Eoghan's brother, Sean,

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would soon end up having to make a journey of his own.

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Eoghan and his friends had saved for months for their holiday

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and little did I know that their holiday was going to cost me

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hundreds of pounds myself.

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Hundreds of pounds that I would have preferred not to have had to spend.

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On June 19th, the night before the boys were due to travel,

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there was a failed computer software upgrade to the RBS Group's computer systems.

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But with no idea of that yet, next morning, before Eoghan set off,

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his dad Paddy took him to their local branch of the Ulster Bank.

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On the day that they were leaving, I took Eoghan round to the bank

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to put his, to put his holiday money into his account

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so he would have access to it through the hole on the wall.

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And the lady in the bank told me and explained to Eoghan that

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that was the best way to do it, so he wouldn't have to carry cash.

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With Eoghan's money safely in the bank, the boys flew in to Portugal

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in time to see the country crash out of the European Championships.

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Next day their holiday spirits would face a crash as well

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and the first sign of that came in a text Eoghan sent to his brother, Sean.

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The first that I heard that there had been a problem in Portugal

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was on the Thursday which was the day after Eoghan had left.

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He had sent me a text message and said, my bank card isn't working,

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can you contact the Ulster Bank fraud department for me.

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I excused myself from work, and rang the Ulster Bank fraud desk

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who advised me that there was absolutely no problem with his card,

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there was no problem with his account and what he should do

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is try different bank machines in the resort where he was staying.

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But later that day, Sean realised what was really at the root

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of his brother's problems.

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When I got home on Thursday evening, I turned on the TV

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and it was headlines in the news that a number of banks

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had suffered, as it was described at the time, a technical glitch.

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It became apparent very quickly this was more likely to be the reason

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that Eoghan couldn't withdraw money from his account

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and sending him from bank machine to bank machine around the resort

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that he was unfamiliar with was unlikely to end up with him getting any money.

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In the UK, the RBS Group was attempting to reassure

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the millions of other affected customers

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that their money was safe even if they couldn't access it

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and they were extending their banks' opening hours into the night to try to help.

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But that was no use to the boys in Portugal.

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Over the weekend, one by one, they all realized

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they were unable to get hold of their own money.

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So we were aware that they were bad but we weren't aware just how bad they were,

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and Sunday morning I then contacted Eoghan to ask him

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how the holiday was going, how he was getting on, was he enjoying it?

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And the response I got was from a very despondent 18-year-old.

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The fact was that the boys were in Portugal, in their apartment

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with only a loaf of bread, a tin of beans

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and someone had taken the notion to buy a tin of sausages

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because they were particularly cheap.

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That was all the food that they had, they had one bottle of water

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and no more money that they could spend.

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Even before they went on holidays,

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we were worrying, but we were excited for him.

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But, once we found out that they had no money, there was just,

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there was very little sleep, I can assure you,

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there was very little sleep. It was all worry from that moment onwards.

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With no idea how long the situation might continue,

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and with the bank unable to transfer any money at all to the boys abroad

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the families could think of no other option but to pool together their cash and take some drastic action.

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At half four on the Sunday evening we realised

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that I was going to have to fly to Portugal.

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Over the course of the next half an hour I had to find flights.

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I found them, they flew from Derry which was close by.

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Erm, they were expensive

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but to be honest, at this point, that was the least of my worries.

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I had to get in touch with the parents of each one of the other four boys

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to ask them all to get some money to me if they wanted to send it out to the boys.

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Within about two hours,

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I had gone from having my feet up, ready to eat my Sunday dinner

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before flying back to Edinburgh for work on the Monday,

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to packing a bag to fly to Portugal, with all this money.

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It was surreal at that point but it was absolutely manic, it was hectic.

0:19:120:19:16

In Portugal, Sean was given a hero's welcome.

0:19:170:19:21

But such an unexpected expense because of trouble at the bank

0:19:210:19:24

isn't something that he felt he should have had to pay.

0:19:240:19:26

So in the weeks since he got back, he's been left wondering

0:19:260:19:29

whether he'll ever get his money back.

0:19:290:19:32

I stayed out for three days because the flights were cheapest that way

0:19:320:19:37

and it certainly wasn't a holiday,

0:19:370:19:39

it wasn't money that I would otherwise have spent.

0:19:390:19:43

To be very clear, I'm not asking for any sustenance for most of like,

0:19:430:19:48

I'm only looking what I believe is a fair amount which is the flights.

0:19:480:19:54

Meanwhile, while the rest of the RBS Group was getting things back on track

0:19:540:19:59

Ulster Bank announced it would be several further weeks

0:19:590:20:02

before their service would return to normal

0:20:020:20:05

leaving Sean facing his own problems back in Edinburgh.

0:20:050:20:08

I obviously arrived back from Portugal expecting to be able to go to the bank myself

0:20:080:20:12

and I soon found out that certainly wasn't going to be the case.

0:20:120:20:16

Ulster Bank hadn't processed my own salary.

0:20:160:20:19

I had a number of direct debits and standing orders

0:20:190:20:22

that had to be paid for rent, Scottish Power, gas and electricity

0:20:220:20:26

and the one that probably affected me the most

0:20:260:20:30

was my Orange phone bill.

0:20:300:20:32

Because my bill hadn't been paid I was actually then cut off

0:20:320:20:36

for the subsequent week.

0:20:360:20:38

To be honest I was starting to get a little bit worried.

0:20:380:20:41

If I'd run out of money, who's going to fly out with anything for me

0:20:410:20:46

and what was going to happen if my well ran dry?

0:20:460:20:50

Countless other families will have their own stories to tell

0:20:510:20:54

not to mention extra costs as a result of the problems at Ulster Bank.

0:20:540:20:58

But the bank does seem determined to put things right.

0:20:580:21:01

They've just announced details of how they will be refunding customers

0:21:010:21:05

for any money lost,

0:21:050:21:07

telling us that...

0:21:070:21:08

They are already refunding all fee charges and interest incurred

0:21:140:21:17

and expect to have completed that process by the end of October.

0:21:170:21:21

They also say they will be...

0:21:210:21:25

..and they are working with Sean to...

0:21:250:21:28

They also say they did find ways to help people access cash abroad

0:21:320:21:35

for example, by increasing limits on credit cards,

0:21:350:21:38

or using a money transfer service.

0:21:380:21:42

But Eoghan's family say that was not their experience

0:21:420:21:45

and they don't feel they were given help where they needed it.

0:21:450:21:49

Basically, they really let us down so, as soon as,

0:21:510:21:53

as soon as everything's sorted, as soon as our accounts are up to date,

0:21:530:21:56

this is three weeks on and my account still isn't up to date,

0:21:560:21:59

once it's up to date we're definitely going to leave, 100%.

0:21:590:22:03

Things did go wrong and whereas that can happen anywhere,

0:22:030:22:06

I think that the mistakes on Ulster Bank's behalf,

0:22:060:22:11

came with how they dealt with things.

0:22:110:22:14

Still to come on Rip-Off Britain -

0:22:160:22:18

We take the bankers to task. How do they explain themselves?

0:22:180:22:22

When you go to a party and someone says what do you do for a living?

0:22:220:22:25

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

0:22:250:22:27

Well, I think I think it is very regretful that you would

0:22:270:22:30

probably think twice about admitting that you were a banker.

0:22:300:22:33

Rip-Off Britain is on the road again.

0:22:430:22:44

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

0:22:440:22:48

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

0:22:480:22:50

and see what you had to say face to face.

0:22:500:22:53

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

0:22:530:22:56

and we have put inside a whole team of experts,

0:22:560:22:59

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

0:22:590:23:02

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

0:23:020:23:05

Personal finance expert Sarah Pennell's next case, Jill,

0:23:070:23:12

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

0:23:120:23:16

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

0:23:160:23:19

I mean, he's getting on a bit and he is not very well

0:23:190:23:22

and the last thing he needs is most of his pension going on bank charges

0:23:220:23:25

which is what's happening, so I'm trying to help him.

0:23:250:23:29

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

0:23:290:23:34

About £1,300 now over 18 months.

0:23:340:23:38

Having had a look your father's bank statements,

0:23:380:23:40

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

0:23:400:23:43

and tried to look at the overall situation

0:23:430:23:45

rather than just applying charges month in month out.

0:23:450:23:48

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

0:23:480:23:52

and tell them that you would like them to consider

0:23:520:23:55

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

0:23:550:23:58

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

0:23:580:24:01

and then go to the Financial Ombudsman Service

0:24:010:24:04

which is a free-to-use complaints service and they will look into the complaint for you.

0:24:040:24:08

I would recommend that you ask your father

0:24:080:24:11

if you can be added on as a second name

0:24:110:24:13

-so you become a joint account holder.

-Oh, that's a good idea.

0:24:130:24:16

In the longer term, it might be worth your while

0:24:160:24:19

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

0:24:190:24:22

The point of it is if at some point in the future

0:24:220:24:25

he isn't capable of making decisions then you can not only deal with this bank account

0:24:250:24:30

-but other ones as well and any other bills.

-That's really good advice. Thank you.

0:24:300:24:34

Consumers have been popping in all weekend to see our experts

0:24:360:24:40

who are only too happy to help.

0:24:400:24:41

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

0:24:430:24:46

You sound excited or worried. One or the other.

0:24:460:24:48

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

0:24:480:24:51

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

0:24:510:24:54

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

0:24:540:24:57

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

0:24:570:25:02

Three hotel stays in Cheltenham,

0:25:020:25:03

quite a long way from Bishop Auckland where they live.

0:25:030:25:07

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

0:25:070:25:11

Yeah, I just couldn't believe it.

0:25:110:25:14

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

0:25:140:25:18

and said we've had a look at these transactions

0:25:180:25:20

and we actually now think that you did carry them out

0:25:200:25:23

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

0:25:230:25:27

On what basis did they say that they felt you guys had been in Cheltenham

0:25:290:25:33

and that you had actually had the use of this hotel?

0:25:330:25:36

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

0:25:360:25:42

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

0:25:420:25:45

Would Terry and Anne actually have to prove that they were never near Cheltenham?

0:25:450:25:50

No, they don't actually have to prove that.

0:25:500:25:53

It's up to the bank to prove that Anne and Terry did carry out those transactions.

0:25:530:25:56

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

0:25:560:25:59

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

0:25:590:26:03

and they've sent them through the credit card receipts for those payments.

0:26:030:26:07

But if you look at them closely here

0:26:070:26:09

-what it actually says is customer not present.

-Oooh.

0:26:090:26:11

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

0:26:110:26:16

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

0:26:160:26:20

What kind of redress do they have in this case?

0:26:200:26:22

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

0:26:220:26:25

Insist that they refund you first and investigate later.

0:26:250:26:29

But then if they do accuse you of fraud you just need to

0:26:290:26:32

stick with your guns and say no we weren't there, this is a fraud

0:26:320:26:35

and make a formal complaint to them.

0:26:350:26:37

If they still won't refund you at that point,

0:26:370:26:40

then you take that complaint on to the Financial Ombudsman Service.

0:26:400:26:43

It's totally free to take your claim on to them.

0:26:430:26:45

If you know you're in the right, then almost certainly your case will be upheld.

0:26:450:26:49

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

0:26:490:26:53

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

0:26:530:26:56

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

0:26:560:27:00

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

0:27:020:27:06

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

0:27:060:27:09

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

0:27:090:27:12

Countless businesses have found themselves saddled

0:27:120:27:15

with costs of tens of thousands of pounds

0:27:150:27:17

and in many cases, sadly, face going under

0:27:170:27:20

thanks to something which the bank has talked them into.

0:27:200:27:23

And even when the disastrous consequences became clear

0:27:230:27:26

the solution offered by the bank, unbelievably,

0:27:260:27:29

was to ask for even more cash.

0:27:290:27:31

Like many across the country,

0:27:330:27:36

the high street in the market town of Watton in Norfolk

0:27:360:27:39

has its share of struggling businesses.

0:27:390:27:41

But things are particularly bad for the family

0:27:410:27:43

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

0:27:430:27:48

This is my great-grandfather, Earnest Adcock.

0:27:480:27:51

It's been a thriving business for four generations

0:27:510:27:55

but all that's changed.

0:27:550:27:56

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

0:27:560:28:00

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

0:28:000:28:03

that we have this horrendous product that's brought us to our knees.

0:28:030:28:07

The Adcocks' troubles are down to a financial product

0:28:090:28:12

Paul was sold five years ago by Barclays Capital,

0:28:120:28:14

the investment arm of the family's trusted bank.

0:28:140:28:17

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

0:28:190:28:22

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

0:28:220:28:27

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

0:28:270:28:31

Whilst the expansion was underway

0:28:310:28:35

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

0:28:350:28:38

that suggested we consider some kind of interest rate protection.

0:28:380:28:41

He declined the offer, but a year later

0:28:430:28:45

Barclay's Capital started to call again and again.

0:28:450:28:49

We were getting sort of phone calls fairly regularly, you know,

0:28:490:28:53

suggesting it would be good for us, it wouldn't cost us anything.

0:28:530:28:57

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

0:28:570:29:00

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

0:29:000:29:03

because I didn't want to upset the bank.

0:29:030:29:05

But Paul didn't realize how complicated this product was

0:29:050:29:08

and that in fact it worked rather like a bet.

0:29:080:29:12

He'd signed up to what was effectively a huge gamble

0:29:120:29:16

that interest rates wouldn't fall below a certain point

0:29:160:29:19

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

0:29:190:29:22

It's a bit like being sold a time bomb because at the time

0:29:240:29:28

and for a year or so afterwards there was no affect

0:29:280:29:32

because interest rates were that bit higher.

0:29:320:29:35

So it wasn't until the end of 2008 when interest rates started to go down,

0:29:350:29:40

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

0:29:400:29:45

And from then on the super low interest rates

0:29:450:29:48

that the Bank of England engineered to support small businesses

0:29:480:29:51

had the opposite effect for Paul.

0:29:510:29:55

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

0:29:550:29:59

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

0:29:590:30:04

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

0:30:040:30:08

because we simply couldn't afford to keep them on

0:30:080:30:12

which is very difficult in this kind of business.

0:30:120:30:15

It's thought around 20,000 small businesses

0:30:160:30:19

may have fallen foul of these interest rate swap products

0:30:190:30:22

which have been sold by all the big four banks.

0:30:220:30:25

Another one is Darby's Glass and DIY Store

0:30:290:30:31

in Marske-by-the-Sea, Cleveland, run by Stephen Lilley and his daughter, Liz.

0:30:310:30:36

They insist their bank pushed them

0:30:360:30:38

into buying the product that has devastated their business.

0:30:380:30:41

We bought the business in 2006 as a general DIY store

0:30:430:30:48

and it's a family business.

0:30:480:30:50

We sell hardware, we sell timber,

0:30:500:30:53

we sell glass, we sell plants.

0:30:530:30:54

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

0:30:550:31:00

But the bank rang to persuade them into buying a product

0:31:020:31:05

to protect them from interest rate rises

0:31:050:31:07

and said the interest rate swap was the most 'appropriate' for them.

0:31:070:31:11

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

0:31:110:31:17

I'd like to see something in writing

0:31:170:31:20

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

0:31:200:31:23

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

0:31:240:31:28

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

0:31:280:31:32

The conversation with him on the mobile phone

0:31:320:31:34

to commit the shop to a ten year base rate swap,

0:31:340:31:38

was a three minute conversation.

0:31:380:31:40

The family only began to understand the implications

0:31:400:31:43

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

0:31:430:31:47

and the extra charges kicked in.

0:31:470:31:48

As interest rates have come down we're actually paying more money.

0:31:490:31:54

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

0:31:540:31:57

and we pay £200.

0:31:570:31:58

The interest rates have come down more and we pay £800.

0:31:580:32:03

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

0:32:030:32:07

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

0:32:070:32:11

to the Financial Ombudsman Service.

0:32:110:32:14

But they found in favour of the bank

0:32:140:32:16

and since then the product has continued to have a disastrous effect.

0:32:160:32:20

To be honest, I'm pretty tired because I have to work all the time.

0:32:200:32:25

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

0:32:250:32:29

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

0:32:300:32:35

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

0:32:350:32:39

and development of new ideas.

0:32:390:32:41

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

0:32:410:32:46

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

0:32:460:32:50

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

0:32:520:32:55

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

0:32:560:33:00

he could pay a fee to cancel.

0:33:000:33:02

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

0:33:020:33:07

Neither of these families, and plenty of others

0:33:070:33:09

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

0:33:090:33:13

something so that's proved to be so catastrophic.

0:33:130:33:15

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

0:33:150:33:19

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

0:33:190:33:22

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

0:33:220:33:25

In June, after a two month industry-wide review, the Financial Services Authority said it found

0:33:250:33:31

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

0:33:310:33:36

The regulator said in many cases the banks failed to disclose

0:33:360:33:38

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

0:33:380:33:42

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

0:33:420:33:45

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

0:33:450:33:50

Lloyds and RBS over providing redress

0:33:500:33:53

and that such products should no longer be marketed.

0:33:530:33:56

Barclays, which sold the interest rate swap to Paul Adcock

0:33:560:34:00

for his electrical store, told us they're 'finalising the detail'

0:34:000:34:03

of the FSA review, but 'welcome the clarity' it will bring.

0:34:030:34:07

They say...

0:34:070:34:08

They will...

0:34:110:34:12

They say they have an on-going dialogue with Paul

0:34:140:34:17

utilising the expertise of their business support team to work with him.

0:34:170:34:21

Meanwhile, HSBC told us it would be inappropriate to comment

0:34:210:34:25

on Stephen and Liz's case as it's...

0:34:250:34:26

They insist the family's complaint has already been fully investigated

0:34:300:34:34

and rejected but they'll be contacting Stephen with details

0:34:340:34:38

of the FSA's process and hope that will enable them to reach a...

0:34:380:34:41

Both banks maintain that 'when sold properly'

0:34:440:34:48

interest rates swaps remain an appropriate and effective tool for businesses

0:34:480:34:52

wanting to...

0:34:520:34:56

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

0:35:000:35:04

So Paul Adcock has now started legal proceedings against Barclays Capital.

0:35:050:35:10

And Stephen and Liz have also got solicitors working on their behalf.

0:35:100:35:14

I feel very bitter towards the bank

0:35:160:35:18

because I don't think they're responding responsibly.

0:35:180:35:22

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

0:35:220:35:29

that the bank will take a responsible attitude

0:35:290:35:33

and resolve that situation because if they don't, there's no question,

0:35:330:35:37

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

0:35:370:35:41

That's the fear of other family businesses

0:35:410:35:44

who feel they've been let down by their banks the same way.

0:35:440:35:47

If the FSA's review can't help them

0:35:470:35:49

thousands face shutting up shop forever.

0:35:490:35:52

As you've heard, the Financial Services Authority

0:35:540:35:57

has been highly critical of the way many of these interest rate swaps were sold.

0:35:570:36:01

So let's hope that one way or another,

0:36:010:36:03

the businesses we came across, and the others in the same boat

0:36:030:36:07

can get their situations resolved.

0:36:070:36:09

Sometimes, when you feel ripped off,

0:36:120:36:15

it could be you that's made a mistake.

0:36:150:36:17

Perhaps you didn't read the small print

0:36:170:36:19

or realise the consequences of what you signed up to.

0:36:190:36:22

Whoever's at fault, you need to know what to do about it.

0:36:220:36:26

So, we've put together a new booklet full of tips and advice.

0:36:260:36:30

You can download it on our website.

0:36:300:36:35

Or to receive a copy in the post

0:36:350:36:37

send an A5 stamped and self-addressed envelope

0:36:370:36:40

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

0:36:400:36:43

At Rip-Off Britain we hear all the time the real anger there is

0:36:490:36:52

out there about the nation's banks.

0:36:520:36:55

We wanted to get some answers to the problems you've raised

0:36:550:36:58

from Eric Leenders of the British Bankers' Association

0:36:580:37:01

which represents all the big high street names.

0:37:010:37:05

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

0:37:050:37:07

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

0:37:070:37:11

Is there within the industry and bankers

0:37:110:37:13

a feeling at all of embarrassment or shame for that?

0:37:130:37:17

Absolutely, I think so.

0:37:170:37:19

I mean I've been in the industry now for some 30 years

0:37:190:37:22

and I think it's a very, very difficult period indeed.

0:37:220:37:25

I think the question is really how we respond

0:37:250:37:27

and what we can do to perhaps restore some of the trust.

0:37:270:37:31

When you go to a party and someone says what do you do for a living,

0:37:310:37:34

would you be embarrassed to admit I'm a banker.

0:37:340:37:36

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

0:37:360:37:40

think twice about admitting that you were a banker,

0:37:400:37:42

but what I'd like to think is that I'm a banker that's trying to make a difference

0:37:420:37:46

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

0:37:460:37:50

Well, let's talk about poor customer service

0:37:500:37:52

that's been associated with the meltdown that happened recently with banks,

0:37:520:37:57

when banks suddenly were unable to process individuals' money.

0:37:570:38:00

The Ulster Bank for instance,

0:38:000:38:02

it's taking them a month to be able to sort out the backlog.

0:38:020:38:05

In other words, your customer is suffering

0:38:050:38:07

because of the inadequacies and the lack of professionalism of the bank.

0:38:070:38:12

I can only I think repeat the apology given by Stephen Hester,

0:38:120:38:17

the group chief executive of the Royal Bank of Scotland Group,

0:38:170:38:20

and I think it's laudable that he's also said that no customer,

0:38:200:38:23

RBS Group, NatWest, Ulster Bank,

0:38:230:38:26

or in fact any other customer of any other bank

0:38:260:38:30

will be out of pocket as a consequence

0:38:300:38:33

of the IT shortcomings at his bank.

0:38:330:38:37

What guarantee is there, it's not going to happen again?

0:38:370:38:40

The Royal Bank of Scotland Group has very generously suggested,

0:38:400:38:43

where there are lessons learned from the issue that they faced,

0:38:430:38:46

they are happy to share that with the industry

0:38:460:38:49

to make sure everyone can benefit from the lessons to be learned.

0:38:490:38:52

The Financial Services Authority, I understand,

0:38:520:38:55

has already been in touch with banks to ask for assurances

0:38:550:38:59

around the robustness of their systems to make sure

0:38:590:39:03

that wherever possible this won't happen again.

0:39:030:39:07

Finally, how can you improve the image of a profession,

0:39:070:39:10

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

0:39:100:39:13

was very happy to pay themselves large salaries

0:39:130:39:15

and large bonuses in the good times but then expect the consumer

0:39:150:39:20

and the taxpayer to bail them out when things go wrong?

0:39:200:39:24

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

0:39:240:39:28

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

0:39:280:39:33

you're confident that what they tell you,

0:39:330:39:35

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

0:39:350:39:39

How sad that we're even having to address these questions

0:39:390:39:42

that the banks allowed themselves to get into that position.

0:39:420:39:45

And from 30 years in banking I can only hope that actually,

0:39:450:39:49

in years to come, we get back to our place in society

0:39:490:39:52

where we are respected and trusted,

0:39:520:39:54

and I can assure you there are a lot of people

0:39:540:39:56

at all levels within the banks that are determined to achieve that.

0:39:560:40:01

Here at Rip-Off Britain we're always ready to investigate

0:40:020:40:05

more of your stories.

0:40:050:40:07

Confused over your bills?

0:40:070:40:08

Trying to wade your way through never ending small print?

0:40:080:40:13

You should read it but it's not in plain English.

0:40:130:40:15

It should be simple, you know, ABC, very basic stuff.

0:40:150:40:18

Unsure what to do when you discover you've lost out

0:40:180:40:21

and that great deal has ended up costing you money?

0:40:210:40:24

You get home and you get your bill and it's like £70 when it's meant to be £35

0:40:240:40:28

and basically you get ripped-off, don't you.

0:40:280:40:32

You might have a cautionary tale of your own

0:40:320:40:35

and want to share the mistakes you made with us, so other people don't do the same thing.

0:40:350:40:39

I feel angry, I feel stupid that I'd allowed this to happen to me.

0:40:410:40:45

You can write to us.

0:40:450:40:48

Or you can send us an email.

0:40:560:40:58

Don't forget, the Rip-Off team is ready and waiting

0:41:040:41:07

to investigate your stories.

0:41:070:41:09

Well, the banks' recent troubles

0:41:110:41:13

certainly seem to have been a bit of a wake-up call for them.

0:41:130:41:16

For too long some of them have rather taken for granted

0:41:160:41:19

the fact that most customers, once they've chosen their bank,

0:41:190:41:21

tend to stick with the same one for life.

0:41:210:41:24

And that's usually because the idea of unpicking

0:41:240:41:26

all those direct debits and standing orders makes moving your account

0:41:260:41:30

seem just that bit too difficult but it's quite straightforward.

0:41:300:41:34

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

0:41:340:41:37

then simply don't stand for it.

0:41:370:41:39

And why should you? Just switch somewhere else!

0:41:390:41:43

And there's evidence more and more people are starting to do that

0:41:430:41:47

and you can find out how to do it on our website.

0:41:470:41:53

There's lots of useful advice.

0:41:530:41:55

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

0:41:550:41:57

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

0:41:570:42:01

-Goodbye.

-Bye bye.

0:42:010:42:02

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