The Royal Bank of Scotland has been tangled in a scandal that may cost the bank billions of dollars in fines — and it doesn’t seem to be letting up anytime soon.
Reports from The Telegraph on Monday (March 14) said RBS is facing billions more in damages stemming from allegations that it misled and mishandled its small business customers.
New legal claims have emerged against the financial institution as a group of lawyers is encouraging SMEs to come forward with fresh allegations. The RBS GRG Litigation (RGL) group launched Monday to represent businesses impacted by RBS’ Global Restructuring Group, the unit accused of forcing small firms to go out of business.
RBS is under investigation by the U.K.’s Serious Fraud Office and the Financial Conduct Authority and, last year, faced a renewed wave of criticism after media reports concluded that the Global Restructuring Group “piles on fees, revalues property that loans are secured against, triggers defaults and takes over assets” of small business clients.
Soon after, RBS was said to have hired a group of third-party advisors to combat the allegations amid internal probes.
With the launch of the RGL, it appears the scandal will carry on well into 2016, too.
“RBS’ actions have destroyed businesses, livelihoods and, in many cases, the lives of their owners, so I am delighted we have funding in place to begin the process towards taking action against those responsible,” said RGL Chief Executive James Hayward. According to reports, RGL said it raised funding and has deposited with lawyers to investigate these claims.
RGL said it hopes to bring the bank to court as soon as this year, reports added.
The publication said RBS declined to comment on the matter. The bank’s chief executive, Ross McEwan, commissioned a report by law firm Clifford Chance in 2014, concluding that the firm found “no evidence” to back up the claims against the bank, instead finding that there are areas in which RBS could improve its services to SMEs.
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