In advance of full publication of the report by Promontory, commissioned by the FCA into the treatment of customers within RBS’s Global Restructuring Division, RBS have today announced that they are commencing a new complaints procedure and fee refund, for SME customers. Full details are available on RBS’s website (http://www.rbs.com/news/2016/november/GRG.html) and affected businesses should review this link.
In summary, there are two elements to the process, the first being an automatic refund of certain categories of fees charged to customers within GRG. This is good news for customers charged these fees (which include the monthly management fees, asset sale fees, exit fees, risk fees, and some others) as the bank intends to write to affected customers within the next 4-5 weeks to offer a refund. Some fees charged by GRG, however, are not included within the automatic refund. These include facility fees, excess fees, security fees, commitment fees and breach fees and any concerns relating to those fees, or other issues connected with GRG will have to be dealt with in the second element of the process.
That is a new, specific complaints process, separate from the bank’s normal complaints process, which will look solely at concerns and complaints connected with GRG. To be eligible for this process a business must be an SME Customer and must have been referred to GRG between 2008 and 2013. RBS’s guidance states that this will exclude sizeable businesses with debt facilities and / or turnover of above £20 million.
Customers are invited to submit written complaints about their experiences within GRG. The bank will assess the complaint and provide a response. On receipt of that response, the customer will have an option to appeal the bank’s decision to an independent third party. Sir William Blackburne, a retired High Court Judge has been appointed as the independent third party.
RBS has agreed to be bound by decisions made by the independent third party, but only in relation to direct loss. Direct loss means specific financial costs incurred by reason of being in GRG, for example, fees charged by the bank and probably also costs of independent consultants required by the bank. Importantly, however, whilst RBS have said that they will consider complaints which contain claims for consequential losses, the independent third party will not have the authority to make binding decisions on consequential loss claims. The bank will have the final say on such claims.
This is a particularly important point for many businesses who will wish to argue that the actions of GRG forced them to take steps which they otherwise would not have taken, for example, selling assets, refinancing or entering into some form of insolvency arrangement. All of these losses will be categorised as consequential losses, not direct losses so the discretion as to whether they will be compensated will lie with RBS alone.
Whilst the scheme may not be perceived to perfect, it is a positive step and RBS customers who have complaints to make in relation to RBS are encouraged to participate in the process. It is not likely to be the case that RBS will routinely agree to pay legal fees for representation within the process and businesses should think carefully, and research their options, before deciding how to proceed. CCL has lengthy experience in dealing with complaints procedures in a cost-effective and proportionate way for clients and will provide representation for complaints within this process in a bespoke manner, taking account of the likely financial recovery and the time anticipated to be required to present the complaint. For a no-obligation discussion about the potential for pursuing a complaint within this process, contact either Claire Collinson or Helena Motherway on our usual number or email contacts, shown on our contact page.
