Banks swim in whisky galore from conned credit card users

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The Independent Online
THREE HIGH street banks have been landed with a pounds 70m whisky loch after credit card users were conned into buying the spirit as an investment by telesales companies.

As many as 6 million bottles are maturing in casks, known as hogsheads, across Scotland, and ended up on the banks' books because credit card users were misled when they "invested" at up to nine times the whisky's real value.

Potential investors received glossy brochures quoting articles in national newspapers promising returns of up to 18 per cent a year as their hogsheads matured.

People who bought their whisky on credit can pass their bills on to the banks because, under the Consumer Credit Act of 1974, lenders are responsible if the sale is clinched by misrepresenting the goods.

Brian Berry, a retired chemistry teacher from Herne Bay, Kent, said yesterday: "They phoned me and convinced me to buy a hogshead for pounds 1,000 - when I had it valued it turned out to be worth pounds 400."

His original purchase was made from Cavendish Wine Merchants. Months later he was telephoned by a firm based in Gibraltar, who claimed to be connected: "I should have got suspicious then," he said. He bought another hogshead for pounds 3,000. He also convinced his son to invest and was rewarded by the company with a free bottle of malt.

Alan Lundie, a respected whisky broker from Glasgow has been contacted by Barclays Bank. He said: "I wouldn't be surprised to find the banks have 15,000 casks." Each cask holds about 400 bottles.

The banks are hoping to cut their losses. A spokeswoman for Lloyds TSB refused to reveal how much whisky they owned, but said that as soon as it had matured they would be trying to get the best price possible for it.

The banks, including the NatWest, are in a worse position than they might be after a collapse of the Far East market, which once accounted for 20 per cent of the whisky trade.

Many of the whisky sales companies are reputed to be citing the credit card law as a fail-safe guarantee for their sceptical clients. But a spokeswoman for Barclays said yesterday that any evidence that this was taking place could "invalidate" any claims by Barclaycard holders.