Couple to contest £400,000 overdraft charges

The Sunday Times Mark Macaskill Published: 31 May 2015

Clydesdale Bank granted Tweed Homes a £2.5m overdraft

Clydesdale Bank granted Tweed Homes a £2.5m overdraft

ONE of Scotland’s largest banks is being sued by a couple who claim they were charged fees of more than £400,000 for an overdraft they were blocked from using.

Andy and Moira Anne Pearson, who run Tweed Homes, an award-winning property developers, were granted a £2.5m overdraft in 2007 by Clydesdale bank.

The money was supposed to finance the construction of new homes on land owned by the Duke of Roxburghe in the Scottish Borders but after using about half the fund, the Pearsons claim they were refused further access, without explanation.

They claim that over the following seven years they endured years of “anguish, anxiety and stress” and insist that they were powerless to prevent massive charges – which appeared on statements as arrangement fees, exit fees and security fees – being levied against their account. On top of the fees, which they claim totalled about £400,000 – more than a third the sum of money they actually borrowed – interest of £700,000 also accrued.

On Friday, lawyers acting for the couple lodged legal action against Clydesdale bank in Edinburgh’s court of session. They claim the bank breached its contract with them and are seeking damages of £2.3m.

The legal action is the latest in a catalogue of claims against high street banks which have been accused of destroying customers’ businesses. The Royal Bank of Scotland is facing multi-million pound class actions from potentially hundreds of entrepreneurs who insist they were mistreated by Global Restructuring Group, a division of the bank. GRG was set up to nurse troubled companies back to health, but it is accused instead of pushing them towards failure.

Court papers lodged by the Pearsons state that in April 2014, Clydesdale informed them that it no longer intended to support their property development plans and that the overdraft facility agreed in 2007 will expire next month. The charges levied make it possibly one of the most expensive overdraft facilities to be granted by a high street bank.

“Tweed Homes has been trying to settle matters amicably with Clydesdale for quite some time, however our case has been passed from pillar to post for too long. We have finally lost patience with the bank and now find it necessary to try and achieve satisfaction through the courts,” said Andy Pearson, who is a former chairman of Homes for Scotland.

Cat Maclean, a partner at Edinburgh-based MBM Commercial, said: “I am deeply sympathetic to the situation my clients find themselves in: they have been committed to resolving matters with the bank since 2008, and have worked hard to achieve resolution. They have been consistently rebuffed and so it is disappointing, but perhaps not surprising, that things have come to this, and proceedings have now been raised. If there is a willingness on the part of the bank to resolve matters through discussion my clients are still prepared to do so, but equally they are now entirely prepared to see litigation through to conclusion.”

A spokesman for Clydesdale bank said it would not be appropriate to comment on the case.

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