‘Phantom phone call’ haunts mis-selling case

The Times James Hurley 4-11-2015

Bob Hamblin

Bob Hamblin feels let down by the system after failing to win his case for redress Andrew Fox/The Times
Company boss disputes Royal Bank of Scotland email evidence in his fight for compensationLike thousands of his peers, Bob Hamblin, the owner of a small business in Leicestershire, was mis-sold an interest rate swap by his bank — a derivatives product that, he argues, has had “disastrous” consequences for his company.

Swaps were marketed as offering businesses protection from changes in the cost of borrowing, but when interest rates fell companies such as Mr Hamblin’s commercial property concern were left nursing losses. Banks, which made huge profits from the sales, typically failed to explain the risks.

Having been let down once by Royal Bank of Scotland, he had hoped that the Financial Conduct Authority’s compensation scheme would repair some of the damage. Now he feels that such faith has been abused. The redress scheme found that the sale “may not have complied” with regulatory standards, but Mr Hamblin was told that he would have bought the product even if proper sales standards had been observed.

When he attended an official meeting to discuss how this conclusion had been reached, he discovered that a key piece of evidence was a record of a “telephone call” that supposedly took place on February 8, 2006. Mr Hamblin’s solicitors were accidentally sent the document recording this alleged call, which RBS said was a contemporaneous sales record. Mr Hamblin said that no such call had taken place and, remarkably for a record said to have been created on the same day, it included a “client contact” who did not exist.

RBS recorded the contact for the phantom call as an “Andrew Shore”. When Mr Hamblin said that he had never heard of this individual, he was told that the record was a “typo” and that it should have read “Michael Shore”. Michael Shore had been a director of Hybeck Estates, Mr Hamblin’s business, but Companies House records show that he resigned as a director in 2002, four years before the mis-sale.

Mr Hamblin was told that the call was a “mis-categorisation” of a physical meeting that took place in a pub owned by Mr Hamblin — yet the true participants are not recorded. Mr Hamblin’s solicitors argue that the document is so flawed that “it cannot be considered an accurate account of what occurred”.

The bank, the Financial Conduct Authority and the independent reviewers who oversee redress outcomes knocked back the complaint, despite acknowledging that the flawed call document “may have caused some confusion”.

Dismissing concerns aired by Sir Edward Garnier, Mr Hamblin’s MP, over the false record, Karina McTeague, the regulator’s director of retail banking supervision, wrote: “There will inevitably be weaknesses and gaps in sales records.”

RBS says that it has a time-stamped version of the document that proves it was created contemporaneously and that the call document was far from the only piece of evidence that was used in the redress decision.

Mr Hamblin is among several RBS customers who contacted The Times with concerns over the accuracy of the bank’s records and how they may have influenced the review process. These complaints are despite the fact that only a fraction of the tens of thousands of mis-selling victims saw the documents that the bank provided to the reviewers to determine compensation outcomes.

Guto Bebb, the MP who has fought for justice for victims of the swaps mis-selling scandal, said that a next step “would be to provide customers at the very least with the information used to make the redress decisions”.

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