Bad Business Karma Barclays Style

Yesterday we heard that Barclays Bank has been fined £290million by the FSA for rigging interest rates. Not just a massive fine but another major blow to the Barclays brand.

Those of you who have heard the Red Letter Days story will know we were forced into administration by Barclays Bank back in 2005- despite the fact we had £3.3million cash at bank. The bank had bonded the company’s credit card takings on the basis there were contingent liabilities on vouchers sold via credit card. 12 months later (when all the vouchers had either been redeemed or had expired) the cost of fulfilling them was just over £1million. £2.5 million of the £3.3million was given to the company that acquired Red Letter Days out of administration (which it bought for the princely sum of £250k), £300k went to liquidators Kroll as their fees and £500k was kept by Barclays as their ‘bonus’ for administering the situation.

It was clear that what Barclays had done was both unlawful and unethical. At the time I took legal advice on what could be done.

A very wise lawyer said to me ‘Rachel, do you want to spend all your remaining money plus a few years fighting Barclays or do you want to get on and live your life?’

I’ve since told this story at probably over 300 business events and it never fails to draw similar horror stories from other people who have suffered at the hands of ‘Barcslays’ (as I now call them). As well as feedback from many ex-‘Barcslays’ employees who felt compelled to leave because of the bank’s ruthless, dog-eat-dog culture.

In business many short term wins are to be had through greed combined with abuse of power.

In the long term, however, (as we have seen with RBS, BP and News International to name but a few) these businesses eventually collapse and crumble under the sheer weight of their negative karma.

The message is, if you are unethical in business you may think you have got away with it, but the negative energy you create will always come back to bite you in the end.

Worth thinking about next time you are tempted to stitch someone up.

Rachel

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8 thoughts on “Bad Business Karma Barclays Style

  1. Thanks for sharing this story Rachel – it’s really encouraging. That must have been such a tough call at the time when you had so much time, effort, money and emotion no doubt invested in your ‘baby.’ Must have all felt so unfair!!

    I love the wisdom of making a call like that though – it’s a kind of meekness I guess. Real strength and tenacity demonstrated without fighting it out in the traditional and quite understandable way. Having such a clarity of purpose and values that you’d rather divert your efforts and resources to getting on with the life you want to live – than being further dragged down by ruthless others who deserved to be brought to account at the time.

    It was a timely read. I listened to an audiobook recently that gave me a similar boost for similar reasons – won’t mention it here in case it looks like I’m promoting it – but happy to share it if you’d like to know. (I’ve got no connection to the author)

    Thanks again, Luke

  2. If everything is energy, then the 3.3 million couldnt have vanished.

    Maybe it will come back to you? But in another form? I am thinking in terms of the 9 ki cycle, and tollowing the spiral.

    I wrote this after the talk yesterday when I got back home

    “Isnt it weird how the thing’s you thought were going to happen first, didnt, and the thing’s you thought would arrive later, arrived sooner. Then the thing’s you only dreamed at, happen immediately, and the other thing’s you’ve been thinking about all week – have to happen another time.

    Everything run’s according to a pattern, but it will not unravel exactly how you imagine, but it will unravel, as and when you least expect it.”

  3. Rachel,
    Thanks for sharing this great post! I love your honesty and unwavering determination to succeed but not at the cost of your health,family and rest of your life. Good you took the advice from your lawyers.
    As a female entrepreneur single parent I’ve been at the throes of money issues in my life and only know too well how tough as well as rewarding managing your own business can be.
    The universe knows what we need and has everything in store for us and as the saying goes, ‘what goes around comes around, which is the same as ‘you’ll reap what you sow’
    Barclays is now reaping the effects of its mis-judgements but it’s the public that will pay the price.
    Let’s hope that the other banks will learn from Barclays costly mistakes and do more to help small businessess survive and thrive.
    Stay blessed

  4. Just read your Blog Rachel re: Barclays. I had a similar unethical experience with Bank of Scotland who royally scuppered my business in 2006/2007 (smaller numbers!). I still pay the price today for their actions and will for some time to come.

  5. i had a similar experiance with barclays
    my gripe was their is no complaints procedure if you turnover over one million or more.this has to be addressed by the fsa

    barclays actually called the police to my door for daring to ask them what the complaint procedure was and how i should go about it

    police officers rea my emails and thought it was hilarious even commenting how barclays had stitched them up personally too ha.

    their actions destroying a succesful company led to serious mental health issues.i only wish i had had rachels lawyers to tell me to get on with my life instead of fighting people who obviousley know the govt need them

    great post rachel.always feel a bit more positive when i speak to you

  6. I approached Barclays for a small business loan and they were thoroughly unprofessional and if I’m completely honest, rip off merchants. They are so out of touch with small businesses it’s shocking and their customer service is appaulingly rude, ignorant and blase.

    I agree when you say “if you are unethical in business you may think you have got away with it, but the negative energy you create will always come back to bite you in the end” as I have given advice to fellow start-up business owners and people looking for personal accounts, to avoid Barclays in every circumstance. That’s at least 10 people I have sent away from Barclays Imagine how many other people have done the same. They must be losing a fair amount of business.

    Great blog and very interesting to read.

  7. Why does Barclays continue to get away with such despicable, unlawful, unethical behaviour though? Despite all the negative energy, they have so far suffered little consequence because no-one is prepared (or big enough) to take them on.
    The Red Letter Days story reflects my own experiences at the hands of Barclays Merchant Services when, early in 2008, they used similar spurious arguments about ‘contingent liabilities’ based upon some internal, secret ratio calculations to force my business into administration. Without warning, without fear of scrutiny and whilst all along purporting to ‘support’ the business!
    I’m sure you are right when you say that you have met many people with similar horror stories. Greed and abuse of power often leaves a long trail of devastation.
    Although I took the same pragmatic decision to ‘get on with my life’, I will never forget the horrific, painful and costly experience of being bullied into receivership by such a ruthless, heartless, unscrupulous ‘bunch of bankers’!
    The BIG question is… When IS someone going to take them on? Don’t we need to take a collective stand? The revolution required to change the balance of power between banks and businesses surely can’t be just left to ‘karma’.

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