Member Article

RBS slammed by law firm for whitewash response

Independent law firm, berg, has expressed its dissatisfaction with the response from Ross McEwan and RBS to Andrew Tyrie MP’s letter on GRG compensation.

The bank has claimed it does not need to increase the amount set aside for compensation of businesses put into financial distress by GRG, claiming in a letter to Andrew Tyrie that “It is highly unlikely that businesses suffered material financial distress as a result of the bank’s actions.”

Alison Loveday, chief executive of berg, who has represented hundreds of businesses damaged by GRG, said:

“It is unacceptable that even now, over 3 years since Lawrence Tomlinson first brought the wrongful actions of GRG to public attention, and the FCA commenced its Section 166 investigation, that RBS can still only say that it is “unlikely” that businesses suffered material financial distress as a result of the bank’s actions.

“Even the FCA’s own update report issued on 8th November 2016 admitted that two thirds of the businesses that went into GRG were not in financial distress. If that is the case, why were they transferred to GRG and given the thousands of complaints against RBS/GRG, how does the bank explain the financial distress that was clearly caused, if it was not as a result of the bank’s actions.

“In addition, the FCA can still not commit to a clear timetable for publishing a “full account of its findings”, and the terminology used by Andrew Bailey strongly suggests that an account is all that we will get - not the full Section 166 report itself.

“The failure to publish the Section 166 report only serves to help the bank, and those business owners who are involved in court litigation against RBS are unable to rely upon any of its findings.

“There has been no disclosure of the cost of undertaking the Section 166 report so far as I am aware, nor of the tax payers money that has been spent by RBS to effectively “defend the indefensible”. This is unacceptable.

“It seems to me that the bank’s belated creation of a limited compensation scheme which, according to RBS’s Chief Executive Ross McEwan is only intended to repay sales charges that should have been explained more clearly, is just a PR exercise, designed to “put a tick in a box”. It in no way reflects the true loss and damage caused to thousands of business owners, nor to the UK economy as a whole.

“It is important that RBS are brought to account, and not allowed to continue to minimise the devastating impact the bank has had.”

This was posted in Bdaily's Members' News section by Toby .