If you feel dissatisfied about the way you were treated whilst in GRG, regardless of whether it is in relation to one of the failings outlined in the FCA’s announcement, you should consider making a complaint.
We recognise that some customers may not be sure whether to complain about what happened to them because they have nothing to benchmark their experience against. We have therefore set out below some points that you may find useful if you are trying to work out whether or not you should make a complaint.
We would suggest that you think about a complaint arising either as a result of:
- The actions of the bank – ‘what the bank did’
- The conduct or behaviour of bank employees – ‘how the bank acted’
The FCA, in its announcement on 8 November 2016, referred to the eight areas in which the inappropriate treatment of SME customers by RBS was identified in the Skilled Person’s report as being widespread. Points 1-7 below relate to the actions of the bank and point 8 relates to the conduct of bank employees.
We would encourage you to read these carefully as you consider whether to raise a complaint. We have set out below how these may give rise to customers feeling they have cause for complaint.
1. Communications about transfer from mainstream banking into GRG
If the bank was concerned about a customer’s ability to repay its debt or the underlying financial position of the business then transferring the customer to GRG was in line with the bank’s policy, even if the customer remained confident about their ability to repay the debt in future.
However, a customer should always have received clear communications that set out the reason(s) they were being transferred to GRG. If you were unclear about the reasons for your account’s transfer, or the implications of transferring your account, or the process of being transferred then you may wish to consider making a complaint.
We understand that some customers may disagree with our decision to transfer them to GRG, but this decision was based on defined criteria. Therefore, a complaint solely about the fact you were transferred is unlikely to be upheld unless you can demonstrate that your account did not need to be transferred. If any inappropriate treatment then occurred whilst you were in GRG you may like to consider the following points.
2. Turnaround practice
The bank has to consider a number of factors, including its lending risk appetite and capital prudential requirements, when deciding who to lend money to or whether to continue to support a customer who may be in breach of their existing facilities.
However, the bank should always act reasonably and consider the impact on the customer’s business. It should properly consider any realistic proposals presented by a customer. If you feel that the bank acted unreasonably or rejected realistic proposals to support your business whilst it was in financial distress, without due consideration, then you should consider making a complaint.
Providing any support to a business in financial distress may result in additional fees or increases in the cost of borrowing being charged by the bank. These should be reasonable and should be clearly explained to a customer. If you feel this was not the case you should also consider making a complaint.
When considering your complaint, please note that disagreeing with the bank’s final decision on whether to provide you with additional time (‘forbearance’), additional lending or a debt write-off will not necessarily be sufficient grounds for a complaint to be upheld in its own right.
3. Communicating decisions
The bank used a variety of different fees or pricing tools to reflect the increased cost of risk associated with customers in financial difficulty, and sometimes charged fees that our SME customers were not familiar with, either because they were not of a type commonly used, or because they were a bespoke pricing instrument.
The bank should have always made sure that the reason for, and level of, any pricing changes or fees charged were clearly explained. If you were unclear about the reasons for any price changes or fees charged then you may wish to consider making a complaint. You may also wish to complain if you believe there were other significant decisions made by the bank that were not well explained.
We are automatically refunding the complex fees that were paid by SME customers in GRG during the period 2008-2013. For customers who are eligible for the automatic fee refund process there is no need to make a complaint in order to receive this refund. Please refer to the FAQ’s on complex fees.
Valuations were undertaken by the bank for a number of reasons, for example:
- to ensure the property valuation complied with any loan requirement set out in loan covenants
- to assess the bank’s risk position for its lending exposure against its loan security profile, and
- to determine pricing and/or strategy in accordance with the bank’s risk profile.
If you believe the bank inappropriately carried out a valuation of your property, or used the basis of that revised valuation in an inappropriate way in dealing with your account, then you may wish to consider making a complaint. If the bank based a decision on an internal valuation which you had challenged, without giving you an opportunity to carry out an independent valuation, and you can demonstrate that the valuation used was inaccurate then this may also be grounds for complaint.
Where the valuation process and result was poorly communicated, but the resulting valuation is seen to be reasonable, your complaint is unlikely to be upheld in respect of the consequences arising from the valuation process.
5. Handling complaints
The Financial Conduct Authority*, has set out clear guidance on how banks should deal with complaints promptly and fairly, including relevant complaints that could be referred to the Financial Ombudsman Service (FOS)*. The bank is committed to adhering to this best practice guidance to ensure that it deals with all complaints fairly, with integrity, and with rigorous standards and timescales.
The bank has acknowledged that it did not always handle customer complaints well, for example it did not always identify when a complaint was being made and so did not record it as a complaint or respond to it. It didn’t always advise customers of their rights to complain (where eligible) to the FOS*. If you have complained previously and do not consider that your complaint was dealt with fairly (or at all), then you may wish to resubmit your complaint.
However, we will not reconsider any complaints that have already been the subject of:
- a full and final settlement of litigation or litigation threatened in a letter before claim
- a decision by the FOS*, or
- a decision of the courts.
*For customers in the Republic of Ireland, the relevant guidance will be from the Central Bank of Ireland and the Financial Services Ombudsman (FSO).
6. West Register
The bank has acknowledged for some time now that there existed a perception that the bank had a conflict of interest when it purchased a property as part of a restructuring process. If you had a property acquired by West Register and believe the process was not managed appropriately, or that the actions of West Register were unfair, then you should consider making a complaint.
7. Use of complex instruments
The bank used a variety of different fees or pricing tools to reflect the increased cost of risk associated with customers in financial difficulty, or as a means to restructure borrowing for customers. In some cases this included the use of:
- Equity Participation Agreements (EPA) where the bank received an equity stake in the business in return for providing equity risk finance or taking equity risk, and
- Property Participation Fee Agreements (PPFA) where the bank received a share in the value of a property in return for providing support by way of forbearance, debt forgiveness and/or additional facilities.
The intention of these instruments was to align the objectives of the bank and the customer so that both could share any future value created when the customer returned to financial health. However, for SME customers in GRG during the crisis, some of these upside instruments were not always properly communicated or were not explained clearly enough.
We are proactively contacting SME customers who were in GRG during the period 2008-2013, to discuss releasing them from their obligations under any EPA or PPFA. We will also refund any complex fees that may have been charged in relation to these products. For customers who are eligible for the automatic fee refund process there is no need to make a complaint in order to start this process.
While we have not conducted a review of the specific circumstances of each fee charged and therefore the automatic fee refund is made on a voluntary basis, please note that receiving an automatic fee refund does not prevent you from making a complaint if you feel that a specific fee should not have been charged in the first instance.
The bank expects its staff to behave appropriately and treat customers fairly at all times. The standard approach to record keeping, however, is to record ‘what’ actions were taken and not ‘how’ these actions were carried out. So it is likely that we will need to rely on customers providing supporting evidence for any complaint they wish to make about staff conduct.
If you believe that any of our staff behaved inappropriately or treated you badly you should consider making a complaint. Please include any relevant evidence, such as correspondence via email or post.
Our complaint form includes an area for you to tell us what you would like the bank to do if your complaint is upheld. This is important because, provided the actions of the bank were not inappropriate, it is unlikely that you will have suffered any financial impact as a result. Given this, the likely outcome where this kind of complaint is upheld is that the bank will apologise for how its actions made you feel, but that you will not receive any financial offer.