Tuesday, 26 November 2013


Shock - Horror - OMG! Banks rip off their customers and steal their businesses.

This week's news that two Official Reports find that the Royal Bank of Scotland (RBS) sets up business customers to fail by imposing "complex" (complex = crooked) incomprehensible "Interest Rate Swap" agreements on loans; then pushes the business into bankruptcy; then sells their prime assets at knockdown prices to a disguised RBS subsidiary; would be shocking if it had not been UK banking practice since the beginning of time.

I suppose it is doubly shocking because RBS was bailed out by HM Government in the 2008/09 banking crash, which "lost" The City of London and Wall Street (in fact lost taxpayers) about $3 trillion (8 million jobs for ten years) - leaving RBS 80% owned by the British taxpayers.

It may be trebly shocking because the British Government (currently the Tory Trust Fund Babes and Liberal Democrat Private School - Alliance), as majority shareholder in RBS and in Lloyds Bank; banks which service 50% of the UK's SME's (small and medium sized enterprises); SMEs which in turn employ 60% of the UK workforce - have set targets for increased lending and support by RBS and Lloyds. Targets which are being ignored by the bankers - and in fact reversed, as RBS sees SME's as easy meat which it can isolate, destroy and consume - without reprisals.

So, it isn't surprising that Mark Carney, the new Governor of The Bank of England, is deeply concerned. But it isn't really news at all; because it isn't new. But the scurrilous, gutter practices may have, almost certainly have, increased ten or twenty fold in 30 years (since monetarist, Big-Bang, filthy rich, Thatcher). MARK CARNEY - MONEY-WARS

The rip-off system relies on having friends in low places, in dark dismal corners of disgrace, where decent people do not look. It works like this:

...Most SME's are essentially funded by and guaranteed by owner/managers; and need strong bankers to provide liquidity for survival and growth - for most of the lifetime of the business. The better the business, the more it is a beacon in the darkness that attracts financial sewer rats, maggots and diseased parasites. The crooks fit-up the business with unserviceable loans, tighten the screws, send in their pals to "rescue" the business - bent accountants, lawyers, non-exec directors, consultants and "experts" who gouge out monthly fees - often doubling the so called financing costs. The business is forced into liquidation with the bank as the major secured creditor; the accountants and lawyers reveal their true identities as (government licensed) official Liquidators. 

The owners are brow beaten into ignominious personal bankruptcy; are exhausted, strangled with red tape* and unable to fight back. All polite people walk away on the other side of the street. The (bank's) Liquidators fix all the creditors meetings - and push their more controversial scams through The Courts, where they have more co-conspirators (friends in low places) - and rapidly sell off all the valuable assets to the bank or other conspirators - all the while extracting large fees for themselves. When  everything has gone - they disappear.

* The UK's Companies Act is the longest, most complex law ever written. A cornucopia for bent lawyers.

Such scams in the past, were most often triggered - in the UK - by tax debts. More than 50% of all SME liquidations were forced by government tax collectors - who had and probably still have the same sorts of friends in low places - in the recovery units in banks - with dirty raincoat Liquidators - in the Court Houses - among Court Bailiffs. We had such a case last year where a profitable small hotel was forced by tax-collectors who "lost" all the payments the hotel made (credited to the  wrong account), into a fixed, high speed, knock-down price auction by the tax-collector's liquidator. The hotel owner's father, a skilled and determined colleague of mine, had the whole 2 year's tragedy reversed, got the hotel back from the conspirators and won substantial compensation from HM Tax Collectors. A one in a million success and triumph for honesty. Do not try this at home. 

The losses and costs are borne by the owner-managers who are generally ruined; by the firms' trade creditors and suppliers and by the redundant workforce. The banks, accountants, lawyers, auctioneers etc. make fortunes - from the years of hard work and risk taking of the owners. 

Best advice - Never do business with a firm where the executives gouge out millions for themselves - they have become habituated greedy crooks - and will screw you.  Read the loan /derivatives contract; if you don't understand it, it is crooked. Split up your banking so no single bank can salivate over your profits - don't let them easily see your success; and like all successful SME owners - be deeply paranoid - trust no-one; they are out to get you -  and they do have friends in low places.


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