John Lewis Financial Services (HSBC) reported to the FCA for fraud

Screen Shot 2015-09-15 at 11.10.55Those familiar with this site will know that the Financial Conduct Authority (FCA) have declined to take any action against HSBC (HFC) for large scale fraud which took place between 2003-2010. I have concentrated previously on HFC because the Office of Fair Trading made an order against the bank in 2010, telling them to stop adding the charges.

One of the reasons the FCA has declined to take action is because HSBC surrendered HFC’s banking licence prior to April 2014 when the FCA assumed the responsibilities of the OFT, so that HFC could not be ordered to pay redress to consumers, because they were no longer regulated. The FCA were also complicit in covering up the fraud and that is the subject of an outstanding complaint to the Complaints Commissioner

However, no order by the OFT was made against John Lewis Financial Services (HSBC) who are still trading. So far as I know they may even still be adding the charges. Here is an example of a charge:

2010The FCA have already told the Treasury Select Committee that they have powers to investigate and order redress in matters that occurred before their remit. I have therefore reported John Lewis Financial Services to the FCA today, in the hope that they will now order HSBC to repay all the John Lewis customers who were defrauded. Here is my email to the FCA:

Dear Sirs

I wish to report a large scale fraud by John Lewis Financial Services Limited (HSBC).

You will no doubt be familiar with who I am and my allegations. But briefly, John Lewis (for whom I acted as a lawyer for over 20 years) sold their store accounts business to HSBC in 2003/4. I worked at Weightmans solicitors and we had a contract with HSBC for recovery of debts due to John Lewis. The contract provided for the addition of unlawful contingency fees to debts, amounting to 16.4% of the debt, immediately on being instructed, which was in breach of the Consumer Credit Agreements. The same contract was also operated by Restons, in Warrington. Besides being an unlawful contingency fee the charges also breach solicitors rules in claiming for charges which are not legally due.

This is my complaint to the Law Society (SRA) about the practice and here is the SRA’s adjudication against Andrew Cox of Weightmans, confirming that the charges in question were forbidden contingency fees and therefore in breach of the rules – You will see that the SRA declined to take any further action.

I have previously reported HSBC (HFC) to you and you have declined to take any action, despite having admitted to the Treasury Select Committee that you had copied and pasted a response from HSBC to my enquiry. In view of your letter to the TSC ( it is quite clear that you have jurisdiction to investigate and order redress in matters that occurred before you assumed the functions of the OFT in 2014. You also state that you have powers to prosecute fraud.

Since all the matters relating to this complaint have been well rehearsed, and the FCA has admitted that the statement you and HSBC made concerning the OFT order against HFC was incorrect I imagine it would not be a particularly lengthy or costly exercise in investigating the fraud. Whilst I know that the OFT order was made against HFC, the same solicitors were engaged in exactly the same practice for John Lewis Financial Services Limited, I have seen the contract Restons had with the bank and was involved in drafting Weightman’s own contract in the same terms.

Furthermore, I told Duncan Hamilton, HFC’s solicitor at a meeting at the bank’s head office in Windsor in 2003 that the charges were illegal. Hamilton, on the acquisition of John Lewis, went on to be be employed directly by HSBC, so it cannot be argued that HSBC had no knowledge of the charges, although it appears they dismissed Hamilton following my report to the SRA concerning his behaviour. Here is a contemporaneous note of my being informed of the terms of the illegal contract where you can see that throughout my interest was, at that stage, John Lewis Partnership (JLP) –

Please do not hesitate to contact me should you require any further information. I will be posting a copy of this report on my website because as you know, there is a great deal of public and media interest in this matter.

I look forward to hearing from you.

Nicholas Wilson