Simon Read: Action means people power
Saturday 20 November 2010
There are a growing number of consumer action groups being set up to help people who have lost out through dealings with financial companies.
The latest is for victims of Crown Currency, the foreign exchange firm that went bust in October, leaving thousands of people out of pocket. Previous groups have been set up for seething shareholders of privatised banks such as Northern Rock, Bradford & Bingley and Lloyds TSB, who saw their holdings shrink or become worthless.
The Crown Currency group – you'll find it online at www.crowncurrencyactiongroup.org – is asking people for an initial £10 contribution to its costs but, if the fight continues, then it will have to go back to ask for more. The Lloyds group – online at lloydsactionnow.com – is a lot further down the fighting road and is currently asking members for almost £300.
That begs the question of whether these action groups do any good, or are you just throwing good money after bad? It's a good question. If the Lloyds group wins its legal battle, in some cases members stand to be thousands of pounds better off . If it loses, then that's £300 gone, which can be a lot of money, especially for older people living on a fixed income.
But if you're a victim of a financial failure, then you will want to do whatever you can to either get your money back or to ensure that those responsible for losing your cash are brought to justice. And, frankly, one person alone has very little chance of doing either against the weight of lawyers, accountants, auditors and regulators who are always found crawling around when a financial firm fails or gets into problems.
For that reason, I would urge everyone to join action groups. A collective can have much more power than an individual. Look at Equitable Life. The action group – at www.emag.org.uk – has 23,000 members and has been fighting for years for justice for policyholders who lost vast chunks of their pensions through the firm. And the battle still goes on.
I don't know whether anyone who has lost money with Crown Currency will ever be compensated, but the action group is likely to be the only body working on behalf of victims and therefore the only chance they have.
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