Retail banks can’t be sued

beggar

To be honest, that title is a bit of an exaggeration. If you’ve got half a million pounds to gamble, you’re free to risk it in court. For the rest of us, who have to rely on no-win-no-fee solicitors, there’s no chance. It’s a stitch-up.

Imagine the unthinkable. Your bank’s software is so inadequate that thieves and unscrupulous employees can help themselves to your money with ease. You point this out to the bank, and they tell you that you must have been careless with your security details, so you’ve lost the lot.

It’s possible that you might disagree, and think that the quality of the bank’s systems had something to do with your cash disappearing. You might think that the bank has been negligent.

Or perhaps your bank has sold you PPI without telling you that you will never be able to claim on it, or coerced you into taking on an interest rate swap, and not explained it to you. This type of mis-selling may have caused you actual loss. You may have had to close a perfectly viable business because of cash-flow difficulties brought on by having to pour unforeseen amounts of money into the bank’s yawning coffers.

You might make the mistake of considering the bank to be a professional organisation, rather than a collection of shysters. This misconception could make you think that a disregard of your financial well-being as blatant as this amounts to professional negligence.

Off you go to a solicitor, and they soon put you straight. Courts don’t want to hear negligence cases against banks, because there is a regulatory body for this business sector, and the Financial Ombudsman exists to adjudicate in cases of this kind. If you insist on going to court, it’s likely that it will find against you, to teach you a lesson.

This is a sensible attitude, because litigation is very expensive and agencies are already in place to protect bank customers. (Stop laughing, at the back!) As the solicitor is taking the risk, you’re not going to court.

Suitably chastened, you take your complaint to the Ombudsman. I’m afraid that you’ll get a nasty surprise. The Ombudsman can’t do anything about the quality of a bank’s systems. It has no power. No bank is required to use fraud-detection software, or to monitor your transactions for suspicious activity, so if they’ve failed to detect an obvious fraud they can’t be blamed.

I know that they told you, when they signed you up, that you could be confident to leave your money with them, because they performed just those checks. It doesn’t matter. Banks are allowed to lie to you.

On the subject of mis-selling, the FCA has asked the banks politely to stop doing it. You  took on these products voluntarily, so tough luck.

So a bank, unlike the rest of us mere humans, can never be negligent. How wonderful, never to be held to account. Don’t you feel jealous?

Whenever we deal with financial service providers, we enter a kind of parallel existence, and are transported back to feudal times. The law is not to be evenly applied to all, but exists only to protect the rich from the poor. We have no rights, but have to rely on the munificence or otherwise of those whom God has placed above us.

Best practice your forelock tugging.

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