LIBOR Manipulation and Repossession proceedings?

[res123]

Hi All,

 

As a business, we borrowed funds from Barclay's by pledging property as security. We fell behind on payments as a result of cash flow issues. I have not seen the clause, but I am sure Barclay's is within their rights to demand that we pay the entire loan off. A sum we cannot afford to pay in its entirety.

 

I had concerns that our loan may have been affected due to LIBOR manipulation. I wrote a detailed letter to the bank manager after receiving their demand letter that I need a detailed explanation of any part that LIBOR may have played in calculating interest rates, early repayment penalties, any origination fee collected up front or paid to third party in commissions as we used a commercial mortgage for this loan.

 

3 weeks later, Barclay's responded that their internal investigations have discovered that our loan was not affected by LIBOR fiasco as they don't use to LIBOR in all of their loan products. They added that this is their final letter and included information on how to get in touch with Financial Ombudsman.

 

They also added that as part of their settlement with authority they cannot add any further on the details. I assume that includes the detailed information that I requested, they also added that this is their only and final correspondence on the matter.

 

Now, I am sure they will start repossession proceedings at some time in future (I assume they will be swift). How does one really know if Barclay's is representing the right picture? Does one take their word for it? I was actually planning to use this as a defense if we were to reach the courts, a reality we have to face at some point.

 

Any suggestions on this?

 

Thanks,

Res

[slick132]

Hi Res,

 

I think we will have to wait and see whether the LIBOR scandal is found to have affected personal and business customers directly and, if so, to what degree. Also, whether such customers have any form of redress on an individual level.

 

Until such matters are clarified, I think you would be lucky to have any repossession avoided or delayed on the basis of the LIBOR scandal.

 

[res123]

I have received correspondence from Barclays. I was surprised as the response was sent efficiently. In essence, they state their internal investigation suggest that we weren't affected as they don't use LIBOR to set all loan. I suppose they are suggesting that LIBOR wasn't used to calculate any of our interest rates. Furthermore, the response points out that this is their final letter and they cannot say anymore about the subject including their findings or anything of that sort as part of their agreement with authorities.

 

It gives me option of taking the matter to Ombudsman. I do plan to take this to Ombudsman, as I think it isn't enough to take Barclays word for it, especially that they accepted liability to authorities and they accept they took part in manipulating LIBOR, in the letter they sent.

 

I had asked them to provide details of mechanism as to how they calculated and quoted interest rates and if that had anything to do with ERP, commissions or any up front fee. They are quite brief in saying that our loan wasn't affected.

 

Now, there is a very high chance that Barclays is correct in its finding. However, the issue remains of credibility. In the past, they represented to their counter parties that their reporting of LIBOR was correct, which wasn't the case. Now they represent that our loan wasn't affected. Though they may be right, I am taken back a bit that they wouldn't reveal any more information.

 

Let's see if Ombudsman can get me the answers I require. I am prepared to accept that in the end Barclays is probably right, but I think they should be more transparent especially after the LIBOR affair.

[slick132]

Hi Res,

 

I think contacting the FOS about this will be a total waste of your time and effort.

 

The FOS will take forever to tell you they agree with the bank and there's nothing they can do.