High flyer 'ruined' by bank error

A high-flying IT manager claims his health and career were ruined when his bank mistakenly posted a warning on an anti-fraud...

A high-flying IT manager claims his health and career were ruined when his bank mistakenly posted a warning on an anti-fraud database branding him as a potential crook. He has launched legal action against Abbey National, seeking damages expected to run to tens of thousands of pounds.

Michael Johnson claims he was sacked from top-level roles in the IT departments at Deutsche Bank, merchant bank UBS and supplier Perot Systems, after a processing error by Abbey National left his name tarnished in the financial services industry and resulted in him becoming almost unemployable.

Johnson is already suing his former employer, Perot Systems, for more than £10m, alleging that a member of the supplier's staff gave him a bad job reference that criticised his technical competence and suggested he had been fired from a job after fraudulently attempting to gain a mortgage.

Documents lodged in court claimed Abbey National mistakenly issued a warning about Johnson on the Credit Industry Fraud Avoidance database branding him and his wife potential fraudsters. The database is widely used by the finance industry to assess creditworthiness and conduct background checks on staff.

A damning assessment by the Office of the Information Commissioner subsequently found that Abbey National appeared to be guilty of several breaches of data protection principles, including holding inaccurate data and processing it unfairly. The bank's procedures for checking data and investigating fraud also appeared inadequate and unreliable, the office said.

After a year of protestations from Johnson, Abbey National wrote to him apologising for the mistake, which it said had been caused by having conflicting information in his file.

Johnson claimed in court documents that the episode has left him virtually unemployable in the finance sector, has excluded him from a range of financial services, and has forced him to seek medical and psychiatric help for stress and heart problems.

His troubles began in 1999 when he was a successful senior associate with Perot Systems, responsible for a team of 30 IT staff and a budget of £30m at Perot's client, merchant bank UBS Warburg Dillon Read.

Johnson claimed he was sacked from the job days after an Abbey National fraud investigator contacted his employer alleging that Johnson and his wife had attempted to make a fraudulent application to Abbey National for a joint bank account.

Court documents allege that Johnson subsequently found it impossible to find work in the finance sector and that he was advised by recruitment agencies that they no longer wanted to represent him.

Although Deutsche Bank hired him as a technical manager and assistant vice-president, Johnson was fired a year later, after prolonged sick leave, when the bank's vetting service raised questions about his background.

The vetting report by Zephon Employee Screening referred to an "off the record" conversation with Perot Systems' global manager Simon Hull. It claimed Hull said Johnson had been "kicked out of a bank" after leaving Perot Systems, and suggested it was "something to do with obtaining a mortgage from the bank fraudulently". Hull is also alleged to have questioned Johnson's technical ability and said that working with him had been "the most horrendous episode" in his working life.

Investigations by Johnson, who used the Data Protection Act to obtain credit records and other information about him held by Abbey National and others, revealed that the bank had erroneously filed an adverse fraud report against him, and had made repeated credit checks against him which, he claimed, adversely affected his credit rating.

A discrepancy in Johnson's application for a bank account, caused by a member of Abbey National staff mistyping the application, was picked up by the bank's Hunter anti-fraud software, sparking a formal fraud investigation by Abbey National officials, court documents said.

In a letter to the Information Commissioner, seen by Computer Weekly, the bank said it had introduced new procedures to prevent cases like this occurring in the future.

Johnson's case against Abbey National is expected to be heard later this year.

Abbey National, Johnson, UBS, Deutsche Bank, and Perot Systems have declined to comment.

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