Barclays admits 'inevitable' mistakes

By THIS IS MONEY
Updated:

 

Barclays, like other banks, says 'mistakes are inevitable' because it has so many customers. Maybe.

Eileen Lamb

Eileen Lamb lost £38,000 on her investment account

But how does the bank explain why it is so poor at rectifying its wrongdoings once they have been brought to its attention?

Take the case of Eileen Lamb, 85, who lives in sheltered housing near Bedford. A lifelong customer of Barclays, and inclined to trust the bank, in late 2007 she accepted advice from branch staff to cash in two with-profits policies.

She was then told to invest the proceeds and further savings, totalling £110,000, into a single, risky investment fund where most of the underlying investments would be shares.

Barclays made about £5,000 commission on the deal. Stock markets fell and Eileen's investment crumbled, at one point losing more than 40 per cent of its value. She enlisted the help of son-in-law Peter Holden, who complained to the bank last October.

After 11 weeks - far exceeding the period laid down by the watchdog --Barclays admitted the mis-sale, but instead of paying back the lost money, the bank said it would pay £13,794 in compensation towards her £38,000 loss.

The bank's view is that Eileen should have been advised to put all her money into another, supposedly less risky, investment fund, where it would also have slumped, but by less.

The matter might have ended there if Peter, a lifelong conservationist who was awarded an MBE last year, had not contacted Financial Mail.

Senior Barclays staff have not been keen to comment on the many similar mis-selling cases we have reported on previously. So in this case, Financial Mail tackled Antony Jenkins, Barclays Global boss of Retail Banking, after his appearance at the commission to ask him if he would be happy for a member of his family to have been treated the way Eileen had been.

He promised to look at the case and a week later the compensation offer was increased to £21,000, which will put Eileen back in the position she would have been had she never taken the bank's appalling 'advice'. She and Peter are delighted with the outcome, but their confidence in the bank is destroyed.

Independent adviser Richard Davis of Park House Financial Services in Westerham, Kent, helped Peter make the complaint.

Davis says: 'The original mis-sale is terrible enough, but what this case shows is that even when a complaint is supposedly investigated, the bank is unable to recognise or correct what has gone wrong.'

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