Timeshare – Barclays Partner Finance.
One of Britain’s biggest sub-prime banks ‘Barclays Partner Finance’ [BPF] has been told to compensate the customers who were mis-sold loans. The loans were sold as “buy now, pay later” loans sold by the Timeshare resorts without proper oversight.
“Where any customer detriment is discovered, BPF have stated they will act swiftly to identify and fix the root cause and learn how we can prevent it from happening again”.
This announcement comes after a swath of claims presented against then by consumer assisted by TESS and others. Because of an internal investigation into Barclays BPF, which is the consumer lending arm of Barclays Bank, they reportedly have identified a lack of supervision over timeshare resorts who in a lot of cases have been selling loans, whilst not authorised to do so.
The damming news is that in a lot of cases, it’s not just timeshare loans that were mis-sold but also cars, furniture, satellite dishes, insolation, home improvements and furniture. BPF knew or ought to have known that retailer and resort merchants must be regulated to sell the loans they provided, however, they (in many cases) have turned a ‘blind eye’ to the laws causing alarm and the descent of the courts who have ruled that should a loan be sold by an unauthorised merchant, it will be deemed unlawful if ‘detriment’ can be established.
This potentially means consumers saddled with debt, who could not afford the loans in the first place or the victims could, have their loans ‘written off’ and returned to the position they were in before they bought the financial product, which means, all your money back including the interest you have paid and statutory applied interest at 8%, as in some cases consumers were subjected to the pressure tactics of salespeople.
The Financial Conduct Authority (FCA) has asked this banking giant to overhaul its lending practices when it learnt of the shortcomings, which were set out in a report in 2016.
A spokesman for the FCA said it expected firms to offer “redress when appropriate” and it would “take appropriate action” if this did not happen.
Where any customer detriment is discovered, we will act swiftly to identify and fix the root cause and learn how we can prevent it from happening again says BPF however, how true is this statement?
Investigators at TESS and others have found that BFP has failed to effectively scrutinise; the product they supported with loans, the required authorisation of the timeshare resorts sellers (to sell the BPF loans) and a lack of ‘due diligence’ when carrying of the test of ‘irresponsible lending’ which has resulted in, significant mis-selling of the loans.
The mis-selling of the loans forced customers to pay for timeshare over a prolonged period and allowing a timeshare salesperson to sell both the timeshare and the loan in the same sales. When the selling was performed, the loans and the Timeshares the sales were in the confines of highly charged boiler rooms were added pressure and urgency were introduced.
Five firms selling BPF loans reportedly had more than one in 10 customers in arrears for their monthly repayments and another retailer had more than half of its customers falling behind on their debts.
In cases flagged up to our pre-action investigators, one client has been mis-sold, up-sold and repeatedly been sold supporting loans, by BFP leaving them in financial difficulties. In all 6 transactions, they were pressured into taking out loans which totalled circa £300,000. This mounting indebtedness caused our clients to lose all their prized savings and were required to take out a mortgage to pay of the subprime loans BPF sold.
A Barclays spokeswoman said: “Since commissioning this report, we have maintained an open and cooperative dialogue with the FCA and have taken significant steps to review and improve our systems, processes and training to ensure that we meet our regulatory obligations and policy commitments.
“Where any customer detriment is discovered, we will act swiftly to identify and fix the root cause and learn how we can prevent it from happening again.”
The investigation was said to have been launched after the FCA, raised concerns with Barclays when the bank tried to expand its loan book.
An FCA spokesman said:
“We use information from a number of sources to assess the potential for firms to cause consumer harm.
“Where consumer harm is identified, we expect firms to treat all impacted customers fairly, including offering redress where appropriate.
“We will take appropriate action where we judge that firms are not sufficiently fulfilling these obligations.
“We were aware of the issues identified and raised concerns with Barclays at the time. We requested that they make changes to their processes and Barclays committed to fixing them.
“We continue to supervise the firm closely, which includes ongoing dialogue with Barclays about its lending practices. We are monitoring the situation, and should any new information become available we will consider further regulatory measures.”
Barclays is facing many 10’s of millions in damages claims, are required to compensate households over loan mis-selling and other failings by businesses that brokered its finance deals.
Barclays Partner Finance, a subsidiary of the banking giant, has reported a 15-fold increase in cash set aside for customer redress after commissioning external solicitors to review its liabilities.
The Times revealed in May that Barclays had found itself on the hook for compensation after salesman misled consumers into taking out its loans to fund consumer purchases.
The Financial Ombudsman Service continue to receive a deluge of complaints and its service is frustrated by the sheer volume of claims accordingly, we at TESS are moving the cases through the courts to ensure our clients receive the justice they deserve.
As we head to the close of 2018, TESS has reported that its clients have won in excess of £2 million in claims this year. The claims have been made against Banks and the Timeshare industry and for the mis-selling of timeshares loans, credit and related products including claims against Barclays.
This shows that potentially many 10,000’s of consumers has been saddled with debt they could not afford to repay, were subjected to pressure tactics by salespeople who were not qualified or authorised to sell the BPF financial products.
Posted on: 10th December 2018