berg have recently released a series of articles in which we discussed the various allegations made against RBS’s Specialist Turnaround Division, the Global Restructuring
Group (“GRG”). These allegations include complaints that the bank mistreated its customers in GRG by:
- exposing them to increased fees and interest rates;
- threatening or causing actual insolvency of businesses;
- selling business assets at an undervalue;
- obtaining substantial fees for the bank’s subsidiary “West Register” by asking businesses to enter into Property Participation Fee Agreement (“PPFAs”)
- “artificially engineering" defaults of facilities to justify customers transferring to GRG.
- This list is far from exhaustive.
The FCA are currently investigating the RBS’s treatment of its customers in financial difficulty and the results of this investigation are due to be released
towards the end of 2015, although the publication of the FCA’s finding regarding RBS’ conduct has already been delayed on a number of occasions.
However, the issues that customers have experienced in GRG, are not limited to the RBS Group.
berg has identified a number of similar issues amongst ex-customers of Barclays Business Support, Lloyds’ Business Support Unit (“BSU”) and other major banks
“Specialist Turnaround Divisions”.
If you are a customer or ex-customer of any of the banks’ “Specialist Turnaround Divisions” and identify at least some of the examples highlighted above to how your business
has been treated, please do contact us.
As with RBS customers, we are recommending that if customers are concerned about how they have been treated by departments who claim to be designed to help
business “turnaround”, they should instruct lawyers to consider any potential claims the business (or potentially the owners) may have against their bank or ex-bank.
It is hoped that the FCA will, when they release their report on GRG, seek to create some form of redress scheme to assist customers affected by GRG (although
whether such a scheme is intended is currently unknown). However, we are not aware of any plans for any such proposed scheme to extend to customers affected by other banks who may need to consider seeking recourse via the court system to recover their losses.
Customers have a limited amount of time to seek redress through the courts and limitation can be an issue with some prospective claims. It
is therefore important to assess the merits of any potential claims at the earliest opportunity.
For further information in relation to berg’s investigations of clients’ experiences whilst in Specialist Turnaround Divisions, please see our
Banking Report 2015 which can be found here.
For more information about any of the above or for practical advice on this or any other aspect of banking and financial disputes, please contact our Banking & Financial Regulation Team on 0161 829 2599 or email firstname.lastname@example.org
(The information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by berg or any of its partners or employees. Professional legal advice
should be obtained before taking, or refraining from taking, any action as a result of this article.)