Once upon a time I believed that my bank, Barclays, would always give me sound advice, support me, deal with me fairly but at the very least treat me with some respect as a long-standing customer. As a middle-aged businessman I should have realised that fairy tales are just for kids!
I realised I had a problem with the Bank in 1994. For three years my fireplace business ‘Hearth & Home’ had been slowly sinking under the weight of repayments to Barclays for two property loans – reaching £3000 a month plus bank charges from a small family business! – And all during the ‘Recession’!
That was bad enough but it was a meeting in Derby with my Barclays Business Manager in 1994 that really ‘scared’ me. He told me that the Bank was pleased with the way that I was handling my accounts and that given the current level of repayments I would clear my debt in 2007! I left the meeting feeling both relieved and shocked. Relieved that I had ‘survived’ another meeting but shocked and angry that the “Business Manager” thought that my business could stand another 13 years of such repayments! Did he really know so little about business?
It was then that I decided to put ‘everything’ up for sale – I knew capital had to be realised, the business could not continue for much longer making this level of payment to Barclays. I and my wife owned three properties (two of them bought with the Barclays’ loans), all would be put on the market – just one minor problem – the housing market was still ‘dead’!
By the middle of 1995 the three properties were still unsold and the business was under more pressure. Between July and September I had three meetings with my ‘Business Manager’ at Barclays Business Centre, Derby
Originally I had agreed to the bank taking the monthly repayments against interest only on the loans but by July 1995 I had overpaid’ interest to the tune £20000. I asked Barclays to pay that amount back into the business bank account – Barclays refused.
I then asked Barclays to suspend the loan repayments for a couple of months to help the business recover – request refused.
I then asked the ‘Barclays Business Manager’ if I could raise a £125,000 mortgage on one of the properties through a building society – and repay part of the loan. He agreed that the Bank would release its charge on the property and the deeds for £125,000 but continued that he did not believe that I would be able to get a mortgage.
He was wrong! I did get the offer of a mortgage. I waited and waited for the mortgage, nothing – I rang my broker – eventually I discovered that the building society had decided not to proceed because my ‘Barclays Business Manager’ had told them that the property in question was mortgaged to for £195,000!
That was the ‘final straw’
By this time I had looked back to try to find out how in five years I had come to be over a quarter of a million pounds in debt. My business was not the problem – no, it was the two loans made in 1989/90 that had drained the ‘life-blood’ out of it.
I felt that I had taken as much as anyone could. I took my business banking to another bank, reflected on everything that had happened and wrote an “Official Letter of Complaint” to Barclays. I believed that Barclays would at least honour the promises of a proper “Complaints Procedure” made in its own “Code of Business Banking” – I was to be proved wrong!
EXHIBIT A - Barclays Code of Business Banking
‘Business Managers at banks only know one business – Banking Business! They are just simply trying to sell you something – don’t trust their judgement, trust your own! And don’t forget banks don’t give overdrafts and loans – they sell them!
can you afford the real cost? – I couldn’t.