Company - - Feb 04,2019
Seven local English councils have sued Barclays over debatable bank loans which were sanctioned before the financial crisis.
It has been revealed that between 2004 and 2010, the seven councils dragged out 49 Lender-Option Borrower-Option or Lobo loans with Barclays. The concern is related to these complex high-cost loans that had variable interest rates which could be altered by the lender.
The local authorities cite the banking giant influenced the interest rates associated with the products.
The seven local English councils placing the charges are Manchester, Leeds, Newcastle, Nottingham, Oldham, North East Lincolnshire, and Sheffield.
As per the data collected by the campaign group UK Debt Resistance, it highlights that the seven councils initiating this combined action disclosed Lobo loans worth £550m.
The councils have not specified the value they are seeking, but they want the High Court to terminate the existing loans minus the penalties. Further, they also request the reimbursement of the amount paid concerned to the Lobo loans.
According to financial expert, Abhishek Sachdev, the Lobos enclosed “huge quantifiable risk at the outset".
Interestingly, Mr. Sachdev was the person who presented evidence related to Lobos to the Communities & Local Government Select Committee in 2015. He added, "There is a reason why none of our large PLC corporate clients would ever enter into such a loan."
A Barclays’ spokesman said the organization wouldn’t not commenting anything about the current legal case.