Investor was 'misled' by bank
THE Financial Services Ombudsman (FSO) and Ulster Bank are being sued in the High Court by a businessman who claims he was "coerced and misled" into a doomed property venture by the bank that cost him €300,000.
Affidavits relating to the case, lodged with the court and seen by the Sunday Independent, claim the businessman was the victim of predatory practices by agents of the bank who pressured him into the deal.
The deal related to the "holding" of a building in London, which ultimately failed.
The businessman, who had two similar previous deals with Ulster Bank, was approached in December 2007 by an agent of the bank to take part in the venture.
In the affidavit, it is claimed the businessman repeatedly signalled he was not interested but the bank proceeded with the investment without his consent or approval.
It is claimed that the businessman was coerced into signing investment documents despite clearly showing he was not suitable nor interested in the project.
The businessman and his lawyer claim he only agreed to accede to the creation of an overdraft from which the funds were taken because he feared his other business accounts would be at risk if he did not proceed.
It is also claimed that the bank's agent also falsified records on a Client Financial Profile and that the bank also misrepresented the terms of the deal to the client.
Specifically, it is claimed by the businessman that the bank had written on his CFP: "Mr X has €300,000 that he wishes to invest in a high-risk property . . ." The affidavit claims that such a statement was "blatantly not so, as he was experiencing severe financial difficulties".
It is also claimed that the information provided about the deal materially deviated from the actual investment.
The project ran aground and as a result, the businessman has been left paying off a €300,000 debt.
The FSO last year, in a ruling, found "serious flaws and failures in the Bank's sales practices" and made an award of €25,000 in favour of the businessman. However, he and his legal team have described that award as "derisory" and are seeking full redress in the High Court.
Ulster Bank, in response to detailed queries from the Sunday Independent, said it is unable to comment on a current legal case.
The FSO was too asked for a response but said it never comments on individual cases.
The businessman's case is being highlighted by Labour senator and barrister Lorraine Higgins.
She said that this case shows "how people are continuing to suffer as a result of Ulster Bank's failure to own up to the mistakes of the past".
Speaking to the Sunday Independent, she said: "It is high time the banks put up their hands when it comes to their wrongdoing and stop prolonging the pain for people and not put them through the hoops legally and otherwise."
The case is expected to be heard by the High Court shortly.
Earlier this month, the Central Bank revealed that 11 banks who aggressively mis-sold financial products were told to repay €67.4m to 77,000 customers.