Auditors block clients from reclaiming money from Swiss banks

Conflicted accountants are blocking thousands of clients from reclaiming significant sums of money from Swiss banks, it has been claimed.

Some of the UK’s largest accountancy firms – including Deloitte, EY, KPMG and PwC, which together make up the Big Four – could be helping private clients claw back money they are owed by major financial institutions such as UBS, Credit Suisse and Julius Baer Group. 

But they are reluctant to do so, it is believed, due to fears this will ruin their relationships with the banks and put a stop to the lucrative work which the banks hand them.

Credit Suisse, which is already reeling from a spying scandal which saw its boss Tidjane Thiam ousted earlier this month, is audited by KPMG. So is Julius Baer, while UBS counts EY as its auditor. 

Because this work pays well, it is claimed that major accountancy firms are wary of doing anything which might anger the Swiss titans.

Switzerland’s big-name financial institutions are often used by wealthier British savers who want to invest their money through the country’s world-renowned private banking system. 

They hold around £320billion of UK clients’ money, according to the Swiss National Bank. But they are sitting on an estimated £3billion which should have been handed back to British customers.

This is because when these banks put their clients’ money in an investment fund in the past, they received commissions from the fund manager as a thanks for bringing new business. 

This practice, known as retrocession, is illegal in the UK and was also found to be unfair by Swiss courts in 2006.

They ruled that any commissions should belong to the investor. So banks must hand any they received back to their customers, plus a 5 per cent interest rate for late payment.

But they must only stump up the cash if they receive a demand for it – and most British clients are unaware that they are owed anything.

Many accountants who help these British customers file tax documents do know that they should be helping their clients reclaim the money. 

But because some value their relationship with the powerful Swiss banks, they are unwilling to cross them.

An email from a UK-based partner at Big Four accountant, seen by the Mail, highlights this tension. 

When queried about whether his firm would help clients claim the cash they were owed, the partner said: ‘Our Swiss firm said no to the subject. We have to respect that.’

Although this issue has been raised with the Financial Reporting Council (FRC), the accounting regulator, it has yet to take any decisive action. 

And claims may only date back ten years under Swiss law, so savers are missing out on more money every day.

Liti-Link, a Swiss litigation funding firm, has been raising awareness of the retrocessions issue among UK customers, and is offering to buy claims from banking clients, pursue the case and pay for the lawyers, in return for a 40 per cent cut of any winnings.

PwC, Deloitte, EY and KPMG declined to comment.