There has been much controversy surrounding the RBS Global Restructuring Group (GRG) and its activities. The unit has now been disbanded and RBS has announced that it will be:
- Setting up a complaints review process for certain SME customers who were placed into its Global Restructuring Group between 2008 and 2013; and
- Automatically refunding complex fees which were charged to SME customers in GRG.
RBS has reportedly set aside £400 million in compensation for the SME businesses in question. The complaints procedure will be overseen by Sir William Blackburne, a retired High Court Judge.
It remains to be seen when this compensation scheme and refund process will begin. And indeed which SMEs will be eligible to take part in the scheme. There are reports that the compensation will only cover what are referred to as ‘complex fees’ charged to SMEs by GRG. This will no doubt be far from the whole story for businesses who have been affected. Some of the 12,000 or so businesses referred to GRG between 2008 and 2013 lost considerable amounts. Many people lost their livelihoods.
What issues have RBS faced with their Global Restructuring Group?
GRG was supposed to be the RBS business support/turnaround unit. RBS has been accused of engineering breaches in order to place otherwise profitable businesses into GRG. By doing this it would have imposed fees and new facility terms on the businesses with a view to ultimately taking the business’ assets.
The report of the Financial Conduct Authority into the activities of GRG is long awaited. A summary of its findings was published on 8 November 2016. This referred to inappropriate treatment of customer elements which should be considered to be systematic.
What does this mean for your business?
If your business had been affected it is important to collate any relevant documentation and consider the position of your business as a result. We do not know how long it will be before the details of the compensation scheme are announced or which businesses will be eligible to take part. Whilst we wait for further information, it is possible that any legal claims you have may become time-barred. It is key to note that, even if you are eligible to take part in the compensation scheme, it may not cover all your losses. Early preparation will be vital to be able to put in a detailed submission as to the losses your business has suffered.