The Fraud Act 2006 and HSBC

Screen Shot 2016-06-13 at 20.18.12I have been urging City of London Police to investigate the fraud by HSBC. Not only has the bank defrauded consumers on a massive scale by adding illegal charges to debts, I now believe that they are deceiving regulators FCA and SRA by producing bogus statements, which allege to show that no charges were added.

The charges have already been outlawed by the Solicitors Regulation Authority and the Office of Fair Trading, (neither of whom had the power to make a finding in fraud) and have been discussed by the Treasury Select Committee in Parliament three times. Following a complaint the FCA has apologised to me for its previous inadequate handling of the matter, paid me compensation and agreed to reopen its investigation. The bank had previously set aside $1bn for the fraud, now reduced to $400m.

In response the City of London Police have sent a patronising email:

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And further:

Screen Shot 2016-06-05 at 11.38.00Let’s have a look at the Fraud Act 2006 to see if a fraud has been committed. Every single relevant section of the act has been breached.

 

2            Fraud by false representation

(1) A person is in breach of this section if he—

(a) dishonestly makes a false representation, and

(b) intends, by making the representation—

(i) to make a gain for himself or another, or

(ii) to cause loss to another or to expose another to a risk of loss.

The false representation is the bank stating, via its solicitors Restons and Weightmans, that it is entitled to add a “collection charge” to debts (In the case of Restons 16.6% of the debt, and Weightmans 16.4% of the debt) which sum was added to the debt in the solicitors’ first letter to the debtor. The Consumer Credit Act agreements between the bank and the debtors states that in the event of default the bank will charge reasonable costs, or costs on an indemnity basis, not a flat percentage of the debt, which was an unlawful contingency fee. The loss to another is the debtor paying, or being found liable to pay, charges which are unlawful. They are unlawful contingency fees and solicitors are not allowed to charge costs they are not entitled to. 

(2)  A representation is false if—

(a) it is untrue or misleading, and

(b) the person making it knows that it is, or might be, untrue or misleading.

(3) “Representation” means any representation as to fact or law, including a representation as to the state of mind of—

(a) the person making the representation, or

(b) any other person.

(4) A representation may be express or implied.

(5) For the purposes of this section a representation may be regarded as made if it (or anything implying it) is submitted in any form to any system or device designed to receive, convey or respond to communications (with or without human intervention).

Clearly the above section applies as the bank and solicitors knew that they were not entitled to add the charge and their implied representation of their right to do so was untrue. The charges were removed if any debtor objected.

3   Fraud by failing to disclose information

A person is in breach of this section if he—

(a) dishonestly fails to disclose to another person information which he is under a legal duty to disclose, and

(b) intends, by failing to disclose the information—

(i) to make a gain for himself or another, or

(ii) to cause loss to another or to expose another to a risk of loss.

This section applies because the bank failed to disclose to the debtor that in the event they defaulted on the loan they would be charged 16.6%/16.4% of the debt, regardless of how much, if any, legal work was undertaken by solicitors. The loss to the debtor was payment of the charge or a finding of liability for the charge via a county court judgment and/or a Charging Order on their property. 

 

4   Fraud by abuse of position

(1) A person is in breach of this section if he—

(a) occupies a position in which he is expected to safeguard, or not to act against, the financial interests of another person,

(b) dishonestly abuses that position, and

(c) intends, by means of the abuse of that position—

(i) to make a gain for himself or another, or

(ii) to cause loss to another or to expose another to a risk of loss.

(2) A person may be regarded as having abused his position even though his conduct consisted of an omission rather than an act.

This section applies particularly to the solicitors. The abuse of position is representing that the “collection charges” were payable by the debtors. Debtors, particularly sub-prime borrowers as the majority in this instance were, are not usual financially sophisticated or legally knowledgeable. Therefore a solicitors letter claiming the charges is likely to imply that the charges are properly due. This is abuse of position, against the financial interests of the debtor.

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