London, Nov 13 (PTI) An Indian-origin couple have become the first private individuals to move court against a bank in the UK for allegedly mis-selling them a complicated mortgage, according to media reports today.
West London-based Ramesh and Rama Parmar have accused the bank of deliberately concealing a complex facility called the “credit limit utilisation” when selling the product to them.
The facility locked the couple into a higher interest deal just as rates fell to their lowest level on record in the UK after the global financial crash.
Judge Andrew Hochhauser at the business and property court at the High Court in London would hear the case this week.
It is believed to be the first time the court will consider whether a high street bank has complied with the Financial Conduct Authority’s conduct of business rules when selling complex financial instruments.
The bank in question contests the claim and has declined to comment.
Lawyers for the Parmars, Lex Law, will tell the judge that between 2006 and 2009 the bank “acted in its own interests” by “foisting entirely unsuitable interest rate swap products” on the couple.
The couple run a small family business of importing latex gloves from Malaysia used by doctors, dentists and medical clinics.
They had used the unnamed bank since 1970 to finance a property in Perivale, west London, which was the warehouse for the business.
“Despite having a statutory duty under the Financial Services and Markets Act to protect private customers interests, the bank placed the pursuit of its own profits above its duty to customers,” claimed their lawyer Ali Akram.
He added that the bank “pestered” the couple for three years with multiple presentations promoting a hedging swap product.
It is also alleged that the bank misled the Parmars by telling them in 2008-09 that interest rates were likely to rise again even though, according to Akram, “the bank’s own internal economic forecasters at the time were predicting that rates would go down”.
If the legal action is successful, it could lead to thousands of small businesses bringing similar claims.
This is published unedited from the PTI feed.