Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Playboy Club wins £800k damages from bank over credit reference

Playboy Club wins £800k damages from bank over credit reference

The Playboy Club, a casino in London, has been awarded £800,000 in damages from a subsidiary of BNP Paribas over claims that it provided a ‘negligent’ credit reference for one of its clients.

A visitor to the casino, who was believed to be a high net worth individual, applied for £800,000 in credit.

The club sent a standard credit check request to his bank, Banca Nazionale di Lavoro, part of the BNP Paribas group. This sought confirmation from the bank as to the individual’s means, standing and trustworthiness to meet a financial commitment to the extent of £1.6 million.

The bank faxed back a response attesting that its client was ‘financially healthy and capable’ and was ‘trustworthy’ up to that amount.

The Italian bank did not admit that it sent the reply, but in his ruling on the matter His Honour Judge Mackie decided that despite certain inconsistencies ‘in the light of the documents disclosed recently it is clear that it did’.

The casino duly granted the individual a credit line.

However, the court found that in the three months that the client had an account with the bank, it never contained any money.

The bank employee who opened the account for the individual was the same one who had apparently faxed back the credit reference, and the judge established that this member of staff had subsequently been dismissed ‘for irregularities unrelated to this case but similar in kind’.

In awarding the damages, the judge concluded: ‘The bank owed a duty to exercise reasonable skill and care in preparing the reference. That it failed to do. The account had a nil balance. On any view, reasonable skill and care cannot have been exercised. But for the reference, the club would not have advanced a [credit line].’

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play JPM’s Negyal: Back divis to temper EM volatility

JPM’s Negyal: Back divis to temper EM volatility

Omar Negyal, co-manager of the JPMorgan Global Emerging Markets Income trust, says a dividend approach to emerging markets reduces the volatility of investing in the asset class.

Play WMR: Why Russia will lose this war

WMR: Why Russia will lose this war

Author and journalist Adam Lebor believes a perfect storm is brewing when it comes to the Russian economy. .

Play WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

Chief economic adviser to London mayor Boris Johnson outlines the geo-political risks in Asia and explains why the risk of another eurozone crisis must not be underestimated.

Your Business: Cover Star Club

Profile: The adviser that tempted Robin Minter-Kemp on board

Profile: The adviser that tempted Robin Minter-Kemp on board

It is rare to meet an impassioned individual who is willing to bang the drum for investment advisory right now

Wealth Manager on Twitter