Alleged £33 billion fraud could increase House Repossession

By December 18, 2008House Repossession

Recently there has been so much news about house repossession being caused by the declining economy. If you house is repossessed it would be a very emotional situation and journalists love emotion.

Our goal is to provide practical help to avoid house repossession. When I read the following article about an alleged £33 billion world wide fraud potentially inccreasing house repossession, I had to write a post to alert all our readers. I wont go into detail about this article as it has been well covered by the DailyMail.co.uk.

In summary it appears that Bernard Madoff who is a highly respected “Wall Street deal maker” has set up a scam or glorified pyramid scheme.

It was set up so people who left the scheme early would be paid out by new investors, rather than the profit generated by the business. But this all backfired when there was not enough money to pay out major investors who wanted to get out of the scheme.

It is reported that Bernard Madoff said to his children that he had lost £33 billion through questionable business dealings, they in turn reported the matter to the police.

UK companies lost at least £3.5 billion pounds and these are some of the UK banks which invested in the scheme and what they reportedly lost:

  • HSBC – £653 million
  • RBS – £388 million
  • Santander – 2.03 billion

The unfortunate reality is many people are already struggling to avoid house repossession and banks who lost money may increase their fees.

Do you think banks affected by this alleged scam will increase bank fees to offset the lost money?

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