Mark Tami
Main Page: Mark Tami (Labour - Alyn and Deeside)Department Debates - View all Mark Tami's debates with the HM Treasury
(11 years, 11 months ago)
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Guto Bebb
That is an important point. As many of these products were sold from 2006 onwards, many affected businesses are now watching the clock run down on their opportunity to take action. That crucial point should resonate within the Chamber and outside.
In addition to the two duties I have mentioned, advisers must also take reasonable steps to show that the client understands the product and the risks involved. The bank must also take steps to ensure that the product is suitable. Mr Jones was sold a product by RBS. I wrote to RBS on his behalf, and was shocked that, in one transaction, I could highlight seven breaches of conduct of business sourcebook regulations. I cannot take the time to go through all seven examples, but I shall give a few. For one, RBS never sought to quantify the termination costs for the swap, which is a pretty severe piece of negligence, in my view. Neither did it take reasonable steps to ensure that it was in possession of sufficient personal financial information about Mr and Mrs Jones, which is also a big issue. It did not take reasonable steps to ensure that they understood the nature of the risks involved or provide a suitability letter. These are breaches of COBS rules and should be taken very seriously. To break seven such rules in one case raises the question: what were the banks doing?
I can highlight a number of general mis-selling examples. In some cases, businesses have been provided with a product not suitable for them and products have been described as similar to fixed rate mortgages, as I have already mentioned. There are also numerous examples of no opinion analysis being provided, meaning that a business was offered one product alone. I challenge the banks to state that that was not because of commission issues.
Mark Tami (Alyn and Deeside) (Lab)
That is the key. Many businesses have contacted me about that very point. It was a case of, “Take it or leave it.” Only one product was offered, and obviously people who needed finance for their businesses took it, with the dreadful consequences we have seen.