RBS to pay back SME customers £400m

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Royal Bank of Scotland is to introduce a new complaints process and refund fees to business customers in its former Global Restructuring Group in a programme that is expected to cost the bank £400m.

The £400m covers operational costs, the refund of complex fees and redress costs from the new complaints process.

The automatic refund of fees applies to small and medium-sized enterprises that were customers of GRG between 2008 and 2013.

RBS today responded to the FCA-ordered review of those customers and admitted, in some areas, it could have “done better”.

The RBS statement says: “Specifically, the bank could have managed the transition to GRG better and should have better explained to customers any changes to the prices or complex fees it was charging. The bank accepts it did not always communicate as well or as clearly as it should have done. The bank also did not always handle customer complaints well.”

In a separate statement, the FCA summarises a report published by Promontory Financial Group, which was appointed as a skilled person to review RBS’s treatment of SME customers that were transferred to GRG between 2008 and 2013.

The report concludes RBS did not “artificially engineer” transfers of customers to GRG nor was there a widespread practice of transferring customers to GRG for their value rather than their level of distress.

RBS chief executive Ross McEwan has apologised that the bank did not provide the level of service it should have.

McEwan says: “Although the FCA review into the historical operation of GRG continues, we believe that now is the right time to deal with the areas where we accept some customers were let down in the past.

“The culture, structure and way RBS operates today is fundamentally different from the period under review. We have made significant changes to deal with the issues of the past, so that the bank can better support SME customers in financial difficulty whilst also protecting the bank’s capital.”