Monday, 2 July 2012

Barclays mis-selling - been there, done that

Before the next bank takes over providing headlines for mis-selling financial products to its customers, let's just recap on what Barclays has been involved in over the years.

The list reads like a history of the scandals which have tarnished banking since the business started to turn into a sales and commissions machine in the 1980s.

1. Pensions mis-selling, 1988-94. Barclays was one of those implicated in this multi-billion pound payout. The misdemeanour was to persuade punters with rock solid company pensions to switch to much less reliable personal pensions.

2. Mortgage endowments. Remember how they told us endowment savings plans were the best way to pay off the mortgage, when - for people who bought in the late 1980s and early 90s - they weren't? Another big payout, to Barclays Life customers, though other providers had more to answer for.

3. PPI, a £1.3bn bill for Barclays. Payment Protection Insurance was sold to borrowers who didn't need it or couldn't use it. The compensation could exceed the pensions scandal as the biggest payout ever.

4. Mis-selling investment funds, 2006-8. Last year Barclays was told to pay investors £60m in compensation for selling them two Aviva funds without warning of the downside risks.

5. Interest rate swaps. Last week, a big telling off for getting small businesses entangled with complex arrangements which landed them with huge bills which interest rates plummeted after the financial crisis. Barclays one of banks which agreed to pay compensation.

The list doesn't include the furore over rigging the LIBOR interest rate, which didn't involve selling to the public. And some big scandals, such as the mis-selling of precipice bonds (so named because the fell of a cliff) weren't Barclays-specific.

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