Small businesses due refunds from RBS’s £400m compensation bill

Banks’s small businesses customers to receive automatic refunds and able to make fresh complaints of treatment between 2008 and 2013

Royal Bank of Scotland (RBS) has been hit with a £400m bill to compensate its small business customers for poor treatment during the financial crisis.

The compensation scheme, developed in partnership with the Financial Conduct Authority (FCA), will see small businesses automatically issued refunds of any complex fees they paid and able to make complaints about how they were treated between 2008 and 2013.

Unfair treatment was first exposed in 2013 when businessman, and adviser to then business secretary Vince Cable, Lawrence Tomlinson alleged that small businesses transferred to the bank’s now defunct Global Restructuring Group (GRG) had their properties sold to its specialist property arm West Register in order for RBS to make a profit.

The FCA found that around 4,000 of the 12,000 customers put into the GRG were not viable, with most of the potentially viable small businesses expected to have experienced inappropriate action by RBS – though most were not thought to have been hit by “material financial distress”.

While the FCA concluded that there had been “isolated examples of poor practice”, accusations that RBS deliberately wrecked small businesses to make profits for itself were dismissed.

Ross McEwan, the chief executive of RBS, commented: “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. I am very sorry that we did not provide the level of service and understanding we should have done.”

Tomlinson said: “I’m pleased that RBS has established a new complaints process and put a compensation scheme in motion for fees, but this is the most easily quantifiable part of the FCA’s findings.

“Whilst they say that West Register alone did not give rise to financial loss, taken with the impact of increased fees and lack of safeguards, the FCA will have to give further consideration as to the impact on businesses’ viability and subsequent administration as a result and whether the bank inappropriately benefitted as a result.

“Today’s announcement is an important first step but it appears there are more conclusions needed on these most damning elements on the bank’s behaviour.”


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