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Interest Rate Scandal Puts Local Care Homes At Risk

Friday June 22 2012


MP John Healey MP John Healey


A CARE company which runs two homes in Barnsley says it has lost £12 million after it claimed it was missold interest rate swaps by its bank.

MP John Healey has stepped in to help Guardian Care Homes (GCH) - which runs Dearne Valley Care Centre in Bolton-on-Dearne and The Grove Care Centre, Thurnscoe - which alleges the bank wrongly sold it interest rate ‘swaps’ which have cost the company £12 million when interest rates plummeted to 0.5 per cent.

Guardian Care Homes is now preparing a to present its case in the High Court but fears the bank may recall the £70 million it has loaned to the group.

John said: "Guardian Care Homes employs 73 staff in the Dearne and has 55 residents – mostly elderly and vulnerable.

“It is extremely concerning that jobs and people’s homes may have been put at risk by mis-selling.”

Mr Healey spoke during a Parliamentary debate, when Labour MPs called for action to ensure protection for businesses – mostly small firms – caught up in the interest rate swap mis-selling scandal.

Mr Healey told Parliament that small companies were often afraid to complain in case the banks pulled their loans, putting them out of business.

He said: “A moratorium is needed following complaints, and firms should be able to make collective challenges for redress.”

Gary Hartland, GCH chief executive, said: “We are hugely grateful to John and his parliamentary colleagues for their support over recent weeks.

“Today is a wake-up call for the major lending banks who for years made millions of pounds by selling these toxic products at the expense of small businesses.

“There is now cross party support for swift and decisive action to be taken by the FSA which will ensure that the banks compensate these businesses, while guaranteeing the practice can never happen again.

“To date SMEs have been unable or too afraid to complain but I hope now they will shout out and secure the redress they need and deserve.”

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