The Royal Bank of Scotland (RBS) is establishing a new complaints process, overseen by a retired High Court Judge, and an automatic refund of complex fees paid by SME customers in its former Global Restructuring Group (GRG) between 2008 – 2013.
The process has been developed in conjunction with the Financial Conduct Authority (FCA).
RBS notes that the FCA’s update confirms that no evidence was found that the bank artificially engineered a position to cause or facilitate the transfer of a customer to GRG or identified customers for transfer for inappropriate reasons and that all SME customers transferred to GRG were exhibiting clear signs of financial difficulty.
There were no cases where the purchase of a property by West Register alone gave rise to a financial loss to the customer and that there was no evidence of intent for West Register to purchase assets being formed prior to the transfer to GRG. It also states that, in a significant majority of cases, it was likely that RBS’s actions did not result in material financial distress to these customers.
As a result of the historical issues identified, RBS is taking two steps for those SMEs in the UK and ROI that were customers in GRG during the period between 2008 – 2013. This activity is designed to address the bank’s failings.
- A New Complaints Process for those customers in scope, overseen by retired High Court Judge, Sir William Blackburne.
- An Automatic Refund of Complex Fees paid by SMEs in the UK and ROI that were customers in GRG during the relevant period.
The bank estimates the costs associated with the new complaints review process and the automatic refund of complex fees to be approximately £400m, to be provided in Q4 2016. This includes the operational costs of both the fee refund and the new complaints process, together with the refund of complex fees and additional estimated redress costs arising from the new complaints process.
Ross McEwan, CEO 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.
“Although the FCA review into the historical operation of GRG continues, we believe that now is the right time to deal with the areas where we accept some customers were let down in the past. I am pleased that with the agreement of the FCA, we are able to announce a new complaints process overseen by Sir William Blackburne, alongside an automatic refund of complex fees paid by SME customers who were in GRG between 2008 – 2013.
“The culture, structure and way RBS operates today is fundamentally different from the period under review. We have made significant changes to deal with the issues of the past, so that the bank can better support SME customers in financial difficulty whilst also protecting the bank’s capital.”