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Ulster Bank customers among thousands due for RBS compensation

By John Mulgrew

Published 09/11/2016

Ulster Bank's parent company, RBS, showed systematic failings, says report
Ulster Bank's parent company, RBS, showed systematic failings, says report

Hundreds of former Ulster Bank customers could be due compensation after a report from the regulator on parent company RBS showed "systematic" failings in its dealings with struggling firms.

But a £400m package "comes too late" for dozens of companies and businesses which were forced to close their doors following their time in the so-called global restructuring group (GRG), according to one financial advisor.

Royal Bank of Scotland - which is majority-owned by the taxpayer - is putting aside the money to help compensate as many as 4,000 small and medium-sized businesses following allegations that they were mistreated by the bank's GRG after the financial crisis.

While the long-awaited and lengthy report from the Financial Conduct Authority (FCA) said the bank's "inappropriate treatment" of small business customers included poor and in some cases "misleading" communication, it stopped short of confirming reports and allegations that the bank intentionally pushed businesses towards failure in the hope of picking up their assets on the cheap.

However, for those businesses which have gone under after being in GRG, it will be the administrators or those handling the insolvency which will decide whether they are entitled to any compensation over fees.

Conor Devine of Belfast debt advisory firm GDP Partnership told the Belfast Telegraph: "(The FCA report) is very contradictory in terms of the points it has made. I think this will run and run. The issue is, we have had many clients who have been unfortunate enough to experience GRG. The challenge is, how many of those businesses are still in existence?

"It's going to be too late for many businesses which have been closed down.

"Anyone who was in GRG now needs to be looking at how they were treated."

RBS has said over £300m will be put towards an "automatic refund of complex fees" paid by such firms between 2008 and 2013, while just under £100m will apply to operational costs.

RBS secretly tried to profit from struggling businesses, according to leaked documents released last month.

Documents leaked to the BBC and Buzzfeed accused RBS of exploiting some vulnerable business customers in the UK after the crash in a so-called 'dash for cash'.

That includes businessmen such as Sean Daly, who subsequently had his loans sold off to vulture fund Cerberus, forcing him to close his Omagh businesses.

And in 2014, Northern Ireland developers Brian Polly and Michael Taggart blamed the bank for forcing their firms under.

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."

Belfast Telegraph

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