HSBC has refused to disclose its internal targets to repossess houses when owners become victims of serious crime. As part of a wider investigation around victims of serious crime, David Gale has asked HSBC to provide details of its internal targets for mortgage defaults. Insurance policies held by banks, sometimes called credit default swaps, are often a quick means for mortgage lenders to improve their short term balance sheet but they depend on the lender formally defaulting the loan. Gale has received a number of complaints that victims of crime are being unfairly targeted for repossession, as bank employees chase internal incentives and bonuses.
Gale said, “We’ve seen instances of banks offering employees cases of wine and other incentives to hit their default targets. Sometimes repossession can be justified but I’m seeing instances of victims of serious crime not being given the required time to get back on their feet. In circumstances where customers are clearly not a long term risk to the bank, you would have to conclude that the banks are ignoring their wider duty of care and once again abusing their powers for short term financial gain.”
In 2002, Gale flagged up the complicity of the UK courts in concealing evidence of data breaches within banks. “Over a decade ago, I warned of what appeared to me to be a very cosy relationship between the banks, the courts and the regulator. I said then that if the regulator didn’t get a grip of the rogue practices within the financial services sector, the banks would be running out of control. Sadly, my words turned out to be prophetic and still no one has gone to trial.”
In 2012, US authorities defended their decision not to prosecute HSBC for laundering money for drugs cartels and rogue states, insisting that a record $1.9bn fine for a litany of offences was preferable to the “collateral consequences” of taking the bank to court.
Neither the Financial Conduct Authority, the body responsible for regulating UK banks, nor the House of Commons Treasury Select Committee have responded to detailed documentary evidence provided to them by Gale on ‘Repossessions for Profit’. Gale said, “If this is an example of the impact of the new regulatory culture, I think there is some way to go before anyone can say that the banks are being properly held to account.”
19th February 2014
UPDATE – February 2016: We passed our evidence to the US authorities in July 2014
HSBC fined $470m for ‘abusive mortgage practices’. The UK regulators have done nothing…
FOR FURTHER INFORMATION PLEASE CONTACT:
David Gale | Interim Chief Executive | Kids for Cash UK | w:http://www.KidsForCashUK.org
Kids for Cash UK – protecting vulnerable children by exposing paedophiles and investigating criminal corruption in the family justice and social care systems