East Mids councils to sue bank over £550m loans

Two East Midlands councils are part of seven nationwide who are suing Barclays Bank over loans they claim were sold fraudulently to them.

North East Lincolnshire Council and Nottingham City Council say the bank manipulated the interest rates on “lobo” loans, says the BBC.

The Lender-Option-Borrow-Option (lobo) loans were taken out between 2004 ad 2010. They had variable interest tates that could be altered by the lender.]

Now, the councils are trying to persuade the High Court to let them exit the loan agreements because of Barclays’ involvement in the Libor case, which saw London banks setting interest rates at fraudulent levels.

Pressure group Debt Resistance UK acquired the information via a freedom of information request and says the seven councils took out lobos worth £550m.

Barclays declined to comments.