RBS are certainly consistent in their approach to reviewing their wrongdoings, if nothing else.
SMEs expecting a fresh approach to RBS’ internal review of the treatment of those businesses that suffered under the Bank’s GRG division are likely to be very disappointed. The negative experiences of many businesses who participated in the FCA led review into the sale of interest rate hedging products (“the Review”) are likely to be replicated with the appointment of Mr Mark Spurin, the same person who oversaw RBS’ controversial review redress scheme, Project Rosetta.
The failings of Project Rosetta are well-known and attempts have been made at a Parliamentary level, principally through the efforts of Guto Bebb MP, to challenge the fitness of the FCA with purported responsibility for running of the Review scheme. The well-aired grievances are as follows:-
- The prevalence of RBS offering alternative IRHP products, rather than full redress as has been offered by the other participant banks;
- Vague and unsubstantiated assertions that customers would have taken an IRHP product in any event, thereby conveniently justifying an outcome of “no redress”;
- The unreasonable exclusion of customers from the review;
- The rejection of a substantial number of consequential loss claims (the majority of claims paid out being under £10,000 in value) in a carte blanche fashion without proper consideration of clear and unequivocal evidence;
The Review’s stated intention was to provide “fair and appropriate redress” for the victims of mis-selling. The published Agreement by which the participant Banks agreed to abide, have been eroded by the existence of separate sub-agreements allowing the participant banks to “write their own rules” in the delivery of the Review scheme.
So what can we expect from Mr Spurin’s management of the GRG Review?
- The same harsh and unrealistic application of a hypothetical “counterfactual” case that bears no resemblance to the reality of what happened to customers. For example where misconduct is acknowledged, RBS will seek to argue it would have made no difference to the customer’s decision-making;
- The continued rejection of consequential loss claims with the same unjust approach
The factual complexities of a GRG review case make it even more imperative to seek legal advice at the outset. RBS will be fully equipped with an armoury of backroom staff and professional advisers to minimise the frequency and amount of redress payments. Businesses need to present an extremely robust submission if they are to succeed in a review and if appropriate pursue litigation.
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