PR firm Green shuts after bank missold interest rate product to sister business

Green, a Wakefield-based PR firm founded in 1993 by a current CIPR council member, has ceased trading after a sister business was missold an interest rate swap product.

Compensation: Green has attempted to claim £108,000. He was offered £850, which he turned down
Compensation: Green has attempted to claim £108,000. He was offered £850, which he turned down

The company is a previous winner at the PRWeek UK Awards and worked with clients including Asda and West Yorkshire Police.

Andy Green, the firm’s founder, told PRWeek that in 2002 he and co-director Ian Green – the two are not related – created the Wakefield Media and Creativity Centre, which provided office space and support services for creative industries, and housed a gallery, in the same premises as the PR firm.

In 2007, the media centre took out a loan of £356,000 with HSBC to refinance existing debt. The loan terms included an interest rate hedging agreement – also known as an interest rate swap. This effectively created an upper and lower cap on interest rate fluctuations, according to a 2012 decision by the Financial Ombudsman Service, which concluded that HSBC had sold an unsuitable product.

In 2009, when Green and the business decided they wanted to instead take advantage of lower interest rates to make repayments on the loan, the bank said it would cost an estimated total of £83,500 to exit the hedging agreement.

Green said: "We weren’t in a position to exercise the choice to exit the products as we couldn’t afford to, but at the same time this trapped us into a business that was unsustainable because of the swap – a real Catch-22 situation that has been a financial nightmare."

Green said that the extra financial burden on the media centre led to the PR centre having to subsidise it financially, which in turn prevented the PR firm from being able to invest in its own business. "The PR business was subsidising the rest of the centre and in the end it all proved too much," he said.

While the media centre is still going, with Green saying he was looking for new investors, Green PR ceased trading at the start of the year and was finally formally dissolved last week. Green said all creditors had been paid. "We’ve not left anyone high and dry," he said.

Green has since made a claim for £108,000 in ‘consequential losses’ to an independent reviewer of missold hedging schemes, but said that the reviewer "has proved less than satisfactory" – offering Green £850. He has rejected this and his fight for the full amount continues.

"Looking back, it feels incredibly stupid but then you realise there’s another 40,000-plus other able, intelligent business people who were also hit," says Green, who also became involved in the Bully-Banks campaign, which was created in December 2011 by a group of business owners who had been missold similar products.

Green also won a CIPR Award for his involvement in the campaign in 2013, and this success helped secure him election on to the industry body’s council for 2015. Andy Green is now a non-executive at Cardiff PR firm Working Word and Belfast’s Serious PR, in addition to lecturing and leading a social enterprise, while Ian Green has moved to an in-house marketing post at groceries exporter Ramsden International.

A spokesman for HSBC said the bank was "committed to ensuring fair outcomes for all customers sold interest rate products", including through that independent reviewer, but said he could not comment on individual cases. He said: "We have so far offered £354m in redress to 2,500 customers – an average of around £140,000 each – and have completed reviews of all but a small minority of cases."

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