Royal Bank of Scotland has apologised to 12,000 small business customers after admitting it faced a £400m bill to compensate them for poor treatment during the banking crisis.
After at least three years of complaining of bad service from the bailed-out bank, small businesses will automatically receive refunds of the fees charged and allowed to make fresh complaints about their treatment between 2008 and 2013.
Ross McEwan, the chief executive of RBS, said: “We have acknowledged for some time that mistakes were made. Some of our customers went through what was a traumatic and painful experience as a result of the crisis. I am very sorry that we did not provide the level of service and understanding we should have done.”
Confirmation of the compensation for small businesses came as Andrew Bailey, the chief executive of the Financial Conduct Authority, prepared to appear before the Treasury select committee.
Ahead of Bailey’s evidence, the FCA produced an update on a much-delayed report into what went wrong in RBS’s now-defunct global restructuring group (GRG) but did not publish the long-delayed report.
Allegations surfaced in 2013 when Lawrence Tomlinson, a businessman who was an adviser to the then business secretary, Sir Vince Cable, compiled a dossier of allegations that RBS was deliberately wrecking small businesses to make profits for itself. At the time, Tomlinson said he been approached by businesses which had ended up in GRG and had their properties sold to the bank’s specialist property arm, West Register.
John Mann, a Labour MP who sits on the committee, said: “A £400m compensation scheme simply isn’t enough, we the taxpayers and part owners of RBS along with their customers need to know why this was allowed to happen.”