Ramesh and Rana Parmar claim they were not able to understand the complex products sold to them in 2009, which were unsuitable for their circumstances and designed to protect against future interest rate rises.
It’s thought to be the first such case brought by private individuals against a high street bank.
The couple allege they were exposed to losses of £300,000 through the ‘breakage’ mechanism of the products but Barclays estimated and outlined a substantially lower risk of £77,000.
It is also claimed Barclays then secretly used the Parmar’s credit rating to cover the £300,000 of risk and failed to inform the Parmars of the ‘credit equivalent exposure’ under the swap and the effect on the claimants’ creditworthiness.
As a result, it is alleged the couple later had an important property purchase fall through.
Ali Akram, a Lexlaw partner representing the couple said: “The mis-selling was particularly egregious as the bank calculated the full likely risks at an estimated £300,000, and remarkably secretly used up the customer’s credit limit in that sum, but only told the customer the risks could be around £70,000.
“This conduct was in spite of Barclays owing a duty to sell in a clear, fair and not misleading manner as per the FCA’s Conduct of Business Sourcebook rules.”
He added that the case will finally provide an opportunity for the courts to determine the rights of private persons where financial services institutions fail to sell complex financial instruments in accordance with the FCA’s COB/s rules.
Barclays declined to comment.
If the Parmars win Mr Akram believes tens of thousands of individuals could have similar cases.
