Politicians “Misled” By RBS
It has been found that politicians were “misled” by the Royal Bank of Scotland’s (RBS) former bank subsidiary, Global Restructuring Group (GRG), when informed of the financial status of many of its customers.
13th November 2017
RBS has long stated that less than 10 per cent of businesses who went into the Global Restructuring Group went into insolvency, but this has now been found to be a gross understatement. According to recent research carried out by the Financial Conduct Authority (FCA), it looks like the companies were three times were likely to go bust than the lender suggested.
The FCA recently published a report on the restructuring group, with findings pointing to the “intentional” mistreatment of customers through unfair fees and costs rather than efforts to revive companies into financial health.
Parliament was informed by RBS, through a number of different independent reviews and reports, that only a small amount of their companies went bust. The number of businesses that the Global Restructuring Group returned to conventional banking was also fiercely overstated.
The bank found loopholes when defining a company as ‘insolvent’. Companies gone insolvent but stuck in a review over other lending issues was described by the bank as ‘remaining’, while the appointment of an insolvency practitioner led to a recording of an “exit” rather than insolvency.
Promontory who carried out the research, along with FCA, pointed out that any of the data pointing to the revival, or insolvency of a company within GRG, was “not an appropriate representation of customer outcomes”.
Furthermore the research discovered the bank’s use of “leverage”, that is the use of threats, such as threatening to withdraw an overdraft if the company didn’t agree to their terms.
RBS encourages any people or companies affected by GRG should use the complaints process it has established.
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