26 January 2010

A Bunch Of Bankers

I’ve commented before on French Banks. How they don’t really allow overdrafts (how does J do it though?) and the charges they levy for just running a current account including charges for having a debit card! Apart from that they seem to work just like UK banks, trying to sell you every financial services product under the sun. Getting loans is no real problem although you do have to prove that you have the salary to pay it back but even then, any bit of note-headed paper with some numbers on it will do. Paying in cheques though has always been a bit ‘iffy’ with the bank clerk quite happy to credit any old cheques, no matter who they're made out to, just as long you sign the back in front of him or her.

I was quite interested to read then of a bit of a scandal with some ex-pats over in the Dordogne who bank with Société Générale (Soc Gen is the common abbreviation) who whilst enjoying the sun, the foie gras and the scenery, lost tens of thousands of pounds, and sometimes hundreds of thousands of pounds, to a British swindler.

It appears that this conman actually signed up with Soc Gen to sell some investment fund or other but when his unwitting victims, many of whom were retired, wrote their cheques out he paid them into his own account and did a runner with the cash.

So what’s new about this – it happens all the time, but in this case the cheques were actually made out to Société Générale, hence the victims were not suspicious at all about where their hard earned money was going. Unfortunately, the lax banking system, whilst protecting their money by being really stingy when agreeing to loans from their own cogffers, allowed the conman to pay the cheques into his own account and do the proverbial runner.

Now his mainly elderly victims are suing Société Générale for what they say was negligence over the fraud that cost them their life savings. They blame the French bank for failing to spot and stop the scam, which has left one British couple living in poverty in a caravan.

The case has exposed the obvious loophole in French banking rules and is generating more controversy for Soc Gen . This remember was the bank who lost billions of euros as it let an unsupervised trader, Jérôme Kerviel, make huge bets in the market when the sub-prime mortgage crisis was at its height. Jérôme Kerviel was caught, unlike our other ‘rogue trader’.

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