Bank Bank Lending Practices -- Is / Was this allowed ?

M

mercman

Guest
A number of years ago I attended a presentation from an Irish Bank where they were marketing an Investment Product.

I reluctantly sat through the presentation but at the time declined the invitation to invest, as the funds available at the time did not meet the required level for Investment. Senior Management (Directors) of the Bank told me that there was a minimum entry level and same could not be reduced under any circumstances.

The following day the Manager contacted me and advised he was coming to my house that evening. He arrived and after small talk, took out a loan offer for a large amount of money. The matter was discussed with him, my wife and self and when I declared that the Investment product was satisfactory for the times we were in at the time.

He then handed us the loan offer, which was signed. He then asked us to deliver the offer to a different branch miles away, which was done.

At no time was an offer ever requested verbally or in writing but on his arrival at the house was the only time that the Investment was discussed as he was fully aware of the idle amount in our account.

The loan in the main was repaid other than approx 20% at the end of the term which was then charged at penal interest.

The question is if the Banks are allowed sell their Investment product by arranging non requested loans and then arriving at ones home to sign for something that was never requested and then to deliver same to a different office, (some 50 miles away).

The loan was repaid and the Investment did not do very well at all.

Looking for an opinion as to whether a Bank can mis-sell loans and Investment product in this manner.
 
Hi mercman

I think you have been around long enough to be able to assess loans and investment opportunities.

I reluctantly sat through the presentation ....

The following day the Manager contacted me and advised he was coming to my house that evening.

This makes you seem like a passenger in the process. As if you had no say in the matter. You could have left the presentation. You could have told the manager not to call.

He arrived and after small talk, took out a loan offer for a large amount of money. The matter was discussed with him, my wife and self and when I declared that the Investment product was satisfactory for the times we were in at the time.

So you considered the investment product satisfactory?
And you and your wife signed the loan agreement.

The question is if the Banks are allowed sell their Investment product by arranging non requested loans and then arriving at ones home to sign for something that was never requested and then to deliver same to a different office, (some 50 miles away).

It's all a bit unusual, although I can't see where it breaks the Consumer Protection Code in any way. There may be a cooling off period for loans these days, but I doubt if it was in effect back then.

Asking you to deliver it to a different office, is a bit odd. Having said that, it did give you overnight to think about whether you wanted to make this investment or not. You must have slept on it overnight and made the journey the next day.

I would certainly complain if this happened to an elderly or otherwise vulnerable customer sold a product on her own without anyone present. But you are not vulnerable. And your wife was present.
 
Brendan;

Not in aggrement with your take on this , maybe what was done scraps by on a (legal) test .
But?

1. Unsolicitated loan;
Surely this conflicts with General Principles Chapter 2 . Consumer Protection Code .
{2.2 acts with due skill,care and diligence in the best interest of its customers}

I agree Mercman was not a {passenger} in this process, but in life we do listen to professionals and take on board their perceived knowledge and accept their integrity.
Surely Mercman can rely on {2.7 seeks to avoid conflict of interest} Clealy Bank had conflict of interest here .
Most Laymen were vulnerable .
The only sure winner was always going to be the lender ,so surely 2.7 comes in.
 
Brendan & Gerry, thank you both sincerely for answering my inquiry. Gerry your precise description would be along with my thoughts (although I do not have access to the details you have quoted.

Regardless, the Bank's legal department will have to decide if they wish to settle with me on this careless and irregular banking and investment mis-selling.

Thanks again.
 
Regardless, the Bank's legal department will have to decide if they wish to settle with me on this careless and irregular banking and investment mis-selling.

.

I don't see mis-selling in what you've written.

As Burgess wrote, you are a well experienced investor, you had plenty of time to think the investment over, you didn't have to, nor were you forced, nor coerced into signing the loan documentation. You could have walked away at any moment.

It seems this investment went sour, and this is where your grievence lies, not in a potential mis-selling.
 
It seems this investment went sour, and this is where your grievence lies, not in a potential mis-selling.

No No, I did wish to make an Investment in this Financial Product but was told that the amount I did wish to invest was too small. They were unable to allow a smaller investment, but I since learned from other Investors that they invested smaller amounts before I was cohersed into making the Investment.

I'm in agreement with the points you have made but without full and truthful set of facts and information been prompted to an investor, then this is a definite case of mis-selling. Moreover, I paid interest n a loan which I did not have to have in the first place and instead of repaying a loan I missed out on Interest which I could have received if the money had of been left alone.
 
Steven, the Original Investment was made in February 2007. I understand the point you make concerning the protection but the people selling the product were only interested in earning commissions and making up the numbers in the fund.
 
Mercman;

This is an awkward one .
I quoted Consumer Protection Code 2012.
The reason I suggest it was brought in was simply that providers had proven that they could not be trusted to act honourably ie different to whether you have a (legal) case.
Consumer Codes have little teeth, they sound good but are normally trumped (so far) by contract law ie you were an adult and you signed = tough!
Little cognisance is taken that seller was the professional who should act with honesty, integrity , clarity.

Since you took product in 2007 you are caught by Statute of Limitations ie too late!
M Mc Grath Fianna Fail spokesman is bringing in Legislation in Oct to give people the right to claim redress for 3 years after they believe they were wronged.

Unless the atitude of Central Bank/Government/Fso moves more towards the Uk models and less towards blanket Bank protection I am afraid you have no hope.

From memory , all Codes always had protection from {conflict of interest} so keep a watch out for cases when said {conflict} is shown.
From what you say , you were left with Risk , whilst Bank were left with a performing loan.
 
Gerry, thank you again. The FSOB has the power to deal with issues up to six years old. However and apparently Michael McGrath of FF is trying to have this time frame extended. I certainly thought t was longer than the three years you have mentioned.
 
Mercman;

What Mr Mc Grath is doing is permitting customers to claim for 3 years from once thy become aware of an issue.eg if today you felt you were wronged in 2004 you have until Aug 2017 to lodge a claim/legal, on your 2004 case.

Whilst this is an improvement ,unless the legal pendulum swings from (you signed = tough) to it was up to the Regulated Professional to ensure clarity etc , I do not see many successful claims.
I find it irksome that Banks defense , given that they are Regulated , that you signed as an adult = tough , is permitted.
Think about it , if we all had to fully read , understand every thing we signed , nothing could get done.
I contend that our consumer legislation protects us from faulty goods such as washing machines and cars , these sellers know we are covered,
yet we are not protected from Bankers , mad !!!

Rant over!
 
Steven, the Original Investment was made in February 2007. I understand the point you make concerning the protection but the people selling the product were only interested in earning commissions and making up the numbers in the fund.

I agree. While we all work to make money, you have to question the ways banks go about it. Orders come down from management of what they have to flog that week and the staff have weekly targets to meet if they want to do well. There is no long term view at all.

Pre the bank crash, if I was in competition with a bank, I had no chance of getting the business, even when giving better advice. People felt honour bound to give the bank the business as they'd helped him out with getting a mortgage etc.

Post crash, I win every time.


Steven
www.bluewaterfp.ie
 
No No, I did wish to make an Investment in this Financial Product but was told that the amount I did wish to invest was too small. They were unable to allow a smaller investment, but I since learned from other Investors that they invested smaller amounts before I was cohersed into making the Investment.

I'm in agreement with the points you have made but without full and truthful set of facts and information been prompted to an investor, then this is a definite case of mis-selling. Moreover, I paid interest n a loan which I did not have to have in the first place and instead of repaying a loan I missed out on Interest which I could have received if the money had of been left alone.

Well you didn't state this in your original post. So you didn't have enough money to invest, but you had a certain amount, and the bank loaned you enough to allow you to invest.

But you've since found out, others were allowed to invest, despite not having the required amount.

This still doesn't make it mis selling.

By the way, is borrowing to invest wise, particularly in an investment that was risky?
 
Steven, the Original Investment was made in February 2007. I understand the point you make concerning the protection but the people selling the product were only interested in earning commissions and making up the numbers in the fund.

Which is always the case, and these people are not to be trusted, as well you know. And they changed the rules when they couldn't get enough people to buy.

It's also a classic sales ploy, tell them this is only for big/rich/wealthy investors, not for mere bit players, you invest big with us and we'll give you big returns like the big boys always get.
 
I understand the point you make concerning the protection but the people selling the product were only interested in earning commissions and making up the numbers in the fund.
Why do people feel if they were sold something by a bank that the bank were dodgy sales people ? This is true for every business. If someone gets stuck with a dodgy mower from a door to door salesman it's no different. That's the nature of anything that someone wants your money in exchange for some gadget.
 
Why do people feel if they were sold something by a bank that the bank were dodgy sales people ? This is true for every business. If someone gets stuck with a dodgy mower from a door to door salesman it's no different. That's the nature of anything that someone wants your money in exchange for some gadget.

Because you're not allowed to talk about making money in this country. Listen to any American entrepreneurs and all they talk about is making money. They want you to listen to their podcasts, read blogs etc so they can sell you something later. You're not allowed say that in Ireland though. You'd swear we all worked for the St Vincent de Paul.


Steven
www.bluewaterfp.ie
 
Back
Top