Couple Takes Barclays Bank to Court Over Mis-selling Mortgage in UK
An Indian-origin couple in the United Kingdom filed a case against a British bank for mis-selling two complex interest rate hedging products. Ramesh and Rama Parmar say that while they suffered substantial financial losses, the bank made around £50,000 in profit and secretly secured credit of about £300,000 over the customer’s assets. The case came into trial on Nov. 13, a statement by the elderly couple’s lawyer’s office said.
The Parmars, who live in west London, have been customers of the Barclays Bank for 50 years. The bank sold two complex derivatives, in the form of two 10-year interest rate swaps, to Mr and Mrs Parmar, Lex Law’s statement said. The couple run a small family business that sells gloves and other products.
The family business supports a Hindu temple — the Shree Jalaram Mandir in Perivale — where Parmar provides free yoga classes and also feeds over 2,000 people a week (from all communities and walks of life) for free, PTI reported.
The financial product was not suitable for their risk profile and Barclays Bank failed to inform them of the risks involved in “Credit limit utilization,” the couple alleged. Their credit limit was “secretly” used by the bank to protect itself against breakage costs.
Pointing out that many other customers of Barclays Bank have faced the similar situation, the lawyers said that the bank is required to give “fair and prominent information” and Barclays failed to do so. It is one of the “first cases to consider the practical meaning and effect of the FCA’s Conduct of Business Sourcebook rules governing the sale of interest rate hedging products and the extent of the duties owed by banks such as Barclays to customers when selling interest rate hedging products,” they added.