Letter: Tricks of the banking trade

Mike Winfield

The man had never been in anything other than PAYE employment and was found to have a special current account with the National Westminster Bank, namely a Small Traders Current Account (no interest paid or bank charges).

This client was offered that account as a safe haven for a deposit of more than £58,000 at the age of approximately 58. He had no banking, finance or investment skills. When I investigated, the account balance had expanded over 40 years to exceed £135,000 through further deposits.

The case was presented to the Financial Ombudsman Service, on the basis that the client had been mis-sold an inappropriate account.

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The bank claimed that the client had been offered financial advice and rejected the claim.

The financial advice was in the following form: client at bank counter is asked whether any commission-bearing regulated and unregulated financial producer were needed. If the answer was “yes” a meeting with the appropriate bank staff was arranged. However, if the answer was “no” the bank clerk, by pressing the appropriate button, recorded on the client’s file that the client had refused financial advice, when there was no advice, simply a sales pitch aimed at the client. The false finance advice was used as a defence and accepted by Fos.

The Fos found in favour of the bank. An appeal is ongoing.

Mike Winfield

M J Winfield Financial Advisers