Royal Bank of Scotland said it will set up a £400 million complaints and refund scheme for customers who allege they were mistreated by its “global restructuring group” small business (SME) division between 2008 and 2013.
RBS denies its global restructuring group (GRG) forced some companies into bankruptcy so it could pick up their assets on the cheap.
But on Tuesday RBS said: “As the bank has acknowledged, in some areas, it could have done better for SME customers in GRG.
“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 that 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.”
RBS said that as a result of the historical issues identified, it was taking two steps for those SMEs that were customers in GRG during the period between 2008 and 2013.
The two steps are a new complaints process overseen by retired High Court Judge Sir William Blackburne and “an automatic refund of complex fees paid by SMEs” that were customers in GRG during the relevant period.
RBS said this will save customers from further delay and ensure that the bank can start refunding fees more quickly and demonstrate its commitment to addressing issues of the past.
Ross McEwan, CEO 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. I am very sorry that we did not provide the level of service and understanding we should have done.
“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.
“I am pleased that with the agreement of the FCA (Financial Conduct Authority), we are able to announce a new complaints process overseen by Sir William Blackburne, alongside an automatic refund of complex fees paid by SME customers who were in GRG between 2008 – 2013.
“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.”
RBS estimated the costs associated with the new complaints review process and the automatic refund of complex fees will be about £400 million, “to be provided in Q4 2016.”
“This includes the operational costs of both the fee refund and the new complaints process, together with the refund of complex fees and additional estimated redress costs arising from the new complaints process,” said the company.
“It is important to remember that the period in question, between 2008 – 2013, was a very challenging time for the bank and its customers,” RBS added.
“In 2008, there was an unprecedented increase in SMEs falling into financial distress and the number moving into GRG increased by around 400%.
“RBS lost more than £2 billion from lending to SME customers.
“RBS continues to cooperate fully with the FCA and remains keen to understand, and learn lessons from, any conclusions that the FCA draws in its review.
“It would not be appropriate to comment further on that review until those conclusions have been published.”