RBS admits misleading court to repossess customer’s home – Financial Times


Lawyers representing Royal Bank of Scotland falsely denied the existence of a customer complaint in a court hearing to repossess a borrower’s home.

The case will fuel concerns that banks continue to mistreat customers despite claiming to have transformed their culture after a series of scandals.

Richard, a longtime RBS customer who did not wish to give his full name, initially fell into arrears on a NatWest-branded mortgage when the bank paid some property management fees levied by a third party that he thought were unfair.

He complained about his treatment to the Financial Ombudsman Service in May. However the bank initiated court proceedings to repossess the property in June, and its lawyers said on August 15 that it had “no knowledge” of any FOS complaint, according to a witness statement prepared for the hearing.

“Consequently, the claimant [RBS] asks that the court will refuse the defendant’s request to dismiss [or] adjourn the hearing”, added the lawyers.

The court agreed and ordered Richard to hand back his property to NatWest.

However, the FOS had told NatWest about the complaint by at least early July, according to correspondence seen by the Financial Times.

The bank’s claim to have no knowledge of the issue was also directly contradicted by the office of chief executive Ross McEwan one week after the court hearing. A representative from his office told the customer’s local MP that RBS could not discuss his case because of an “ongoing complaint” with the FOS.

After being contacted by the FT, RBS acknowledged that there had been an error in its witness statement.

“We are aware of [Richard’s] situation, and understand that the Financial Ombudsman Service have reopened their investigation. We will not take any further action against [Richard] at this time and await the outcome of their independent investigation,” said a spokesperson.

The case comes as the taxpayer-owned bank is battling to improve customers’ perceptions after largely completing its decade-long restructuring.

RBS was ranked the country’s least popular bank brand in an official ranking published by competition regulators this year, while NatWest was tenth of 16. Executives have made customer satisfaction a priority after admitting the bank had been “distracted” with internal problems in recent years.

It came under particular fire for the behaviour of its Global Restructuring Group, which was accused of “widespread and systematic” mistreatment of struggling small businesses after the financial crisis.

RBS has pledged changes to ensure “past mistakes cannot be repeated”, but has nonetheless faced accusations of being overly aggressive towards individual customers. This month, for example, the BBC reported that RBS refused to compensate a customer who was defrauded of £20,000 after a violent mugging until it was contacted by reporters.

In addition to the witness statement, Richard said RBS had repeatedly refused to engage with his efforts to arrange a way to repay his arrears, and pushed him into further debt by reneging on agreements to renew the fixed rate on the rest of his mortgage.



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