The Royal Bank of Scotland has announced it will refund complex fees for customers who were moved into the Global Restructuring Group (GRG) and set up a new complaints review process.
The BBC has reported that that the bank has set aside £400m for refunds to SMEs they allegedly mistreated in the wake of the financial crisis.
As many as 12,000 small businesses could be eligible for compensation although details of the complaints review process have yet to be announced.
The bank issued an apology saying: “We have acknowledged for some time that mistakes were made. Some of our customers went through what was a traumatic and painful experience as a result of the crisis.
"We did not provide the level of service and understanding we should have done."
The announcement has been welcomed by the Financial Conduct Authority (FCA) who have commended the involvement of an independent third party who will be providing oversight of the new complaints review process after establishing that RBS failed to identify customer complaints and handle them fairly.
The FCA released a statement which found that: “RBS did not set out to artificially engineer a position to cause or facilitate the transfer of a customer to GRG” and that “SME customers transferred to GRG were exhibiting clear signs of financial difficulty”.
The FCA statement fails to recognise that in hundreds of cases the ‘financial difficulty’ that companies moved to the GRG exhibited were cash flow problems caused by the bank trading inappropriate derivatives as conditions of lending, such as interest rate swaps.
Although the FCA has highlighted some of RBS’s failures failing to treat their customers fairly and providing poor communication and business support, overall the FCA conclusions are highly disappointing. This is because they do not reflect the behaviour we know banks to have been guilty of through our work representing hundreds of SMEs in claims against mis-sold derivative investments.
If you are a business owner who has been affected by the Royal Bank of Scotland Global Restructuring Group Scandal and are considering claiming compensation through the redress scheme I would urge you to get in touch with the financial litigation lawyers at Slater and Gordon to discuss your next steps.
Call us on freephone 0800 916 9015 or contact us online and we will call you.
Dispute resolution lawyer Craig McAdam has more than 12 years’ experience in commercial litigation and regulatory actions. He works from the Slater and Gordon Manchester office.