Royal Bank of Scotland puts aside £400 million to compensate business owners mistreated by its Global Restructuring Group following FCA inquiry.
The Royal Bank Of Scotland (RBS) has put aside £400 million to cover the cost of a redress programme for small business customers of the bank’s Global Restructuring Group (GRG) between 2008 and 2013.
The activities of the GRG were investigated by the Financial Conduct Authority (FCA) after a number of former customers complained about the way they were treated.
Some of the most serious allegations suggested that RBS moved businesses to the GRG when they did not need support, and that RBS’s actions directly led to the collapse of these businesses.
While the FCA report found ‘no evidence’ to support the most serious allegations it did identify a number of failings from RBS. These failings included issues around customer complaints, communication and charges.
As a result of the report, RBS has set up a new compensation process for GRG customers. It will be led by retired High Court judge William Blackburne.
RBS will also automatically refund all complex fees paid by small business customers of GRG between 2008 and 2013. This includes all exit fees, asset sale fees and risk assessment fees.
The bank said it will put aside £400 million to cover the cost of this process.
Ross McEwan, chief executive of RBS, said: ‘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. I am very sorry that we did not provide the level of service and understanding we should have done.’
The FCA will publish a full account of its findings once it has considered whether it will take further action. However, it cautioned that as the actions carried out by the GRG were largely unregulated the FCA’s powers were ‘limited’.
Credited to: http://citywire.co.uk/money/rbs-apologises-to-small-firms-hurt-by-restructuring-unit/a966640