Royal Bank of Scotland have significantly, and without notice altered the terms and conditions to their Complaints Review Scheme. The change forces customers to accept the first compensation offer made by the bank, as if an appeal is lodged, the first offer will be made invalid.
In late 2016, secret files titled ‘Dash for Cash’ were exposed by BuzzFeed and BBC Newsnight. The documents showed that RBS/NatWest’s former turnaround division, Global Restructuring Group (GRG), stripped viable businesses of their assets and chased them of their profits to boost revenue for the Bank.
Seneca Banking Consultants have found that the Complaints Review Scheme, a redress programme for businesses affected by GRG, has been alarmingly altered by RBS without due notification to applicants, or any advisory parties involved.
If the outcome letter includes an offer, that offer will remain open for acceptance for 28 days from the date of the letter, after which, if not accepted in the meantime, it will lapse. It will also lapse immediately upon any appeal against a decision being made to the ITP (Independent third party).
If the Bank makes a partial offer of redress, the customer is faced with the dilemma of either accepting the offer or appealing the decision, which would result in the original decision no longer being valid.
This takes away the natural right of response that is championed by the FCA (Financial Conduct Authority). The customer is effectively forced to restart the process, with hopes that the ITP makes an award as favourable as the previous offer.
Common practise shows that the Bank would either accept such a response and make an improved offer or reject the response and maintain the original award. It is also strikingly different from the Common Law practise in which the original decision remains in the event of an unsuccessful appeal.
Daniel Fallows, Director at Seneca Banking Consultants, said,
“My concern is that the Bank’s policy in treating any appeal as a rejection of the original decision will force customers to reluctantly accept any offer made by the Bank in the first instance, regardless of the merits of an appeal to the ITP.”
Seneca Banking Consultants have raised concerns to Andrew Bailey, Chief Executive of the FCA, in an open letter outlining the shortcomings of the GRG Redress Scheme, and the lack of communication around the T&C changes, urging for a ‘just, prompt outcome’ for the businesses affected.
City AM recently found that the long-awaited report into RBS’s Global Restructuring Group cost the FCA £40,000 for the monitoring and preparation alone, the ongoing review was formally announced in 2014.
In February, it was also announced that RBS’s losses trebled to £7bn, following the mis-selling scandal.
Seneca Banking Consultants, have recovered £2.75 million relating to GRG losses and retrieved just under £100 million in total compensation for UK businesses.
If you think that you may have been affected by the Global Restructuring Group, give us a call on 01204 322 805, or use our contact form.