Northumberland MP Ian Lavery calls for review after specialist bank is accused

Originally featured in Chronicle Live

MP Ian Lavery is calling for a review of a specialist bank following claims it forced many of its customers into financial ruin.

The Wansbeck MP said he is out to highlight how Dunbar Bank has treated “hard working ordinary people” while a bankrupted couple from Whitley Bay have set up their own action group to look at similar cases.

Dunbar Bank – property lending subsidiary of Swiss insurance giant Zurich – is at the heart of an investigation by the BBC Inside Out team.

Monday night’s episode of the current affairs series looks at forced bankruptcy claims involving the bank which has spent the past five years running down its loan book after its parent company decided to cease new lending in 2010.

Viewers will hear claims that Dunbar bankrupted customers in its haste to recover money on properties bought with their loans.

Small businesses and property developers say it withdrew customer support in order to retrieve its money as quickly as possible.

Ian Lavery has said he will raise the matter with the Treasury Select Committee.

“It appears to me as if there’s a financial scam, albeit legal, which has been allowed to progress with Zurich and with Dunbar which needs close scrutiny,” he said.

“That’s why I’ve brought it to the attention of the Treasury Select Committee chairman Andrew Tyree in the Commons.”

He added: “I’ve also arranged to have a meeting with MPs who have constituents who were involved in this.

“Everyone needs to know how these organisations have acted; how they’ve acted against hard-working ordinary people.”

The programme speaks to Ben and Coryn Warren, customers of Dunbar Bank who have formed an action group to highlight the bank’s “extreme” debt enforcement policies.

The pair ran a successful building company in Whitley Bay but were made bankrupt after the financial crash of 2008.

They have formed the Dunbar Action Group and among the cases they are examining is one of Ric Francis and his late wife Pauline who were with Dunbar for more than 20 years and borrowed money to fund development projects such as the Hartford Marina in Cambridgeshire.

Following the crash, Mr Francis said their bank account was frozen without warning, bankruptcy proceedings followed and the bank demanded full repayment of the loan of more than £10m.

Mr Warren said: “There was a high number in the North East who were being served papers by Dunbar bank which we sort of thought was unusual.”

Financial services lawyer Alison Loveday of BERG solicitors said “the enforcement action that we understand Dunbar has taken is at the most extreme”.

Dunbar was set up in 1960s by a consortium that included actor Sir Sean Connery. It began financing property development and was bought by Zurich.

With Zurich apparently winding down all lending via Dunbar Bank, the bank shifted its policy on chasing debts.

A former Dunbar insider tells BBC Inside Out North East and Cumbria: “Zurich sent in accountants to get all its money back. There was a very clear strategy. They got their money back as quickly as possible.”

The insider added: “There was nothing orderly about the wind down. They took them for everything.”

Monday’s episode is presented by George Gently actor Lee Ingleby.

Zurich declined to be interviewed, strongly rejected all of the allegations and said it could not comment on individual cases.

It accepted debt recovery can be difficult and distressing. It said the bank always acted lawfully and fairly and strongly rejected claims it has ever acted inappropriately.

It uses standard methods employed in the industry and expected all insolvency professionals to maintain the highest standards of integrity.

http://www.chroniclelive.co.uk/news/north-east-news/northumberland-mp-ian-lavery-calls-10047130

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