Martin Hannan: Call mis-selling what it is; fraud

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Tears flowed, I am told, when a friend’s young son went along to his local HMV store two days after the retail giant collapsed into administration.

The staff in the store were helpful, admirably so given that they are facing the likely loss of their jobs, but the order from on high from administrator Deloitte was stark – no vouchers were to be honoured, and anyone holding an HMV voucher must join the list of creditors.

To be fair, Deloitte has now reacted to a public backlash regarding this and performed a U-turn, enabling the vouchers to be used from today. But how was my friend supposed to tell an eight-year-old that he must join a queue, fill in a form, and hope that somewhere down the line, some nice record company will realise that losing a youngster’s custom at a time when the high street is in disarray is going to be bad for its business.

The fact is that the law of the land allowed the administrator to not honour the vouchers in the first place, and that is just plain wrong. Just like travel companies, retailers that operate gift voucher programmes should pay into an overall scheme that ensures gift vouchers are always honoured. It would be one way of ensuring that kids don’t get their Christmas ruined in future.

The voucher issue is just the latest attack on the public resulting from Britain’s corrupt and venal business culture. Someone at HMV must have known that the firm was on the brink of collapse. If the directors were not aware of just how perilous the situation was, then they were guilty of gross dereliction of duty.

If they were aware, and allowed vouchers to continue to be sold knowing that there was a very good chance that administration would be necessary just a few weeks down the line, then they are guilty of, at best, mis-selling (remember that word), and at worst, fraud.

No doubt it will be argued that no-one knew what administration would mean for HMV, but that is nonsense – there are plenty precedents to show that when a firm falls into the hands of the administrators, all deals are 
off.

The HMV scandal is the latest in a line of corporate skullduggery practiced upon the British public, of which the mis-selling of financial products is by far the worst. The Payment Protection Insurance (PPI) scandal in particular really gets my goat, not least because no-one, not a single 
person, has faced any criminal charges over the UK’s biggest scam yet.

Note how they call it mis-selling, as if it was just a small technical error. Far better to give it the correct name and description – fraud on a gigantic scale, perpetrated by some of our largest financial institutions which we now know were being run by a bunch of greedy bonus-seeking crooks. There’s no other word for them – PPI was stealing money because there was no real chance of the insurance element being used.

I speak from experience. I claimed on my PPI on a loan a number of years ago, and was refused a payout on technical grounds. I immediately lodged a complaint with my bank’s customer service people, and within a few weeks I was given back all my premiums and a sum in compensation for my inconvenience. I am a battle-hardened hack, however, who likes nothing better than dealing with obfuscation and dark practice on the part of corporate bureaucracy. What about elderly or infirm people who do not have the energy or the skills to argue with their bank?

Now there’s a whole industry out there which has sprung up to manage claims, with the banks having set aside billions to pay those customers who successfully claim against them for mis-selling.

Even that element of the scandal is outrageous. Every financial institution that mis-sold PPI knows perfectly well which client or customer was given insurance they did not need.

I believe they should be compelled by law to be pro-active in solving their customers’ problems, rather than the current situation where it is up to the customer to initiate a complaint.

The banks and other institutions should all be forced to write to every one of those customers to say: “We think we may have mis-sold you PPI, can you come in and see us, please?”

In every case, where it is even slightly possible that PPI was mis-sold, the customer should be given the benefit of the doubt and paid out in full immediately, with a suitable sum paid in compensation as well.

That would be one way of restoring faith in our banks, and regaining that trust is hugely important for Edinburgh, not least because we have the headquarters of RBS on the western edge of the city.

In the independent Scotland that I work for as a member of the SNP, I would hope that we would introduce genuinely tough laws that would put a stop to corporate crime. That won’t happen with David Cameron’s Tories in charge for, like Labour, they are in bed with the bankers.

Even now, however, we need to start seeing things like the HMV’s voucher scandal and PPI for what they are – criminal activities, to be subject to the justice system instead of excused as technicalities.