View from City Road: Fighting the banks is the best policy

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The Independent Online
Do not be too comforted by assurances from banks that the O'Brien case is already old

hat. The Law Lords blocked Barclays' attempts to take possession of the marital home after

Mrs Bridget O'Brien had guaranteed a small business overdraft based on the security of the house.

The banks say they have changed their procedures to avoid a recurrence, and it is of course true that this particular set of circumstances is unlikely to occur again. This is mainly because the judgment is so precise when read in tandem with the superficially similar Pitt case.

In this the Law Lords, pronouncing at the same time, turned down a wife's appeal against repossession of the family home by a bank, even though she had been persuaded by her husband's 'undue influence' to sign. The difference between the two cases turns mainly around the fact that Mrs O'Brien did not stand to gain financially by guaranteeing her husband's debts.

The wider point about the banks is a behavioural one. The case happened six years ago, but the rules under which wives and partners must have the full implications of signing a guarantee spelt out to them - so that there can be no misunderstanding - were formalised in the banking code only last year. (Incidentally, this is not husbands against wives, since it applies to any cohabitees with an emotional relationship.)

Why is it that banks' own relationships with customers always improve grindingly slowly, and under outside pressure? Think of personal overdrafts, faults in cash machines, collection of information on customers, small business loan terms, the treatment of firms in difficulties. Customers should be encouraged to fight, since it is the best way to change things.

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