There is a new Solicitors Regulation Authority cover-up of HSBC fraud. It is really quite extraordinary. The findings of their new “investigation” contradict their previously findings and cover-up, that the charges were unlawful contingency fees, and seem to be based entirely on the answers to a questionnaire sent to the solicitors. They don’t appear to have done any investigation at all.
Here are my responses to their main finding, with a copy of their letter below:
Dear Mr Armstrong.
Here are my responses to your shameful report on your actions. As stated previously this matter is with the Serious Fraud Office. No doubt they will wish to speak to you.
“Having obtained both firms responses, we understand that the collection charge was a charge that was added by the Banks and not by either firm you name within your report. This is a position which we understand has been agreed by both the FCA and the OFT”.
Not true. The charges were added by the firms’ software. I helped configure it at Weightmans. There was a contract between the solicitors and the bank allowing for the solicitors to add to charges in respect of their fees.
The following are salient points made by both firms in their responses which provide further context in respect of the matters which form your complaint:-
- The added collection charge was pursuant to the terms and conditions (a contractual charge) that the Banks had in place with their customer.
- Not true the contractual terms state either “costs on an indemnity basis” or “reasonable costs” – neither of which apply.
- The Banks (firms clients) ceased applying the collection charge in late 2009 which was prior the OFT ruling in 2010.
- Not true. I have a copy of a claim form on behalf of John Lewis, from January 2010 including the charge.
- All collection charges (following the OFT ruling in 2010) were reversed off by by the firms and sent back to the bank’s customers.
- Not true – I have recovered the sums for a number of people where the charges were not “sent back” – I also have correspondence from the bank post dating the alleged “charge back” stating that the customer was not entitled to any refund, or credit. Why did they not simply say the charge has already been paid back?
- Since 2010 no further collection charges have been added by the Banks.
- The firms charges on contentious matters were for the following aspects: fixed costs for issue of a claim, enforcement and entry of judgement.
- Irrelevant they were unlawful contingency fees AS ALREADY DETERMINED BY THE SRA.
- Where there was a contested case, the Bank would pay for the firms hourly rate.
- Not true. I was head of debt recovery at Weightmans, – their charges were 16.4% of any sums recovered. Time was not recorded.
- On non contentious matters the firms would charge a percentage of a debt and in respect of where the firms allocate/remit payments and make reports to the Bank.
- Totally meaningless.
- The Banks paid the firms on a monthly interval basis and there were no changes to these arrangements once the collection charge was removed.
- Not true – the banks didn’t pay the firms a penny – ALL of their costs and disbursements were paid via the 16.4% charge. Have you actually asked “the banks” for evidence of any payments?
In addition, the firms have both confirmed that the credits on customers accounts were applied pro-actively by running a script against their case management system and there was therefore no need for customers to contact them to obtain the credit.
Not true for reasons stated above.
With the removal of the collection charge and the evidence provided by both firms to demonstrate the steps taken to reimburse some customers (where added), there appears to be no ongoing regulatory risk for the SRA to deal with. Further, the charge itself (as added by the Banks) would in any event fall within the regulatory remit of the FCA (in terms of its validity).
Both untrue. I have told you I have county court judgment records which show that in the period in question in excess of £200m in illegal charges were added. It is not only a matter for the FCA – the solicitors entered into an illegal contract with the bank to allow for unlawful charges. AS ALREADY DETERMINED BY THE SRA.