We are now heavily involved in pursuing
consequential loss claims arising from the
misselling of Interest Rate Hedging Products.
have settled the direct losses, but
there is now a long task to assess the
consequential losses incurred by the
family and their businesses.
These include a number of missed
opportunities and costs incurred as a
result of the businesses being forced
into RBS’s Global Restructuring
Group.
During the course of the swaps the
businesses were placed into GRG, as
many businesses Seneca Banking deals
with have been. The official line from
RBS is that GRG is a temporary place
for the business to sit while they sort
out problems – taking “positive and
active management” of the bank’s
problem lending portfolio. This
supposedly involves working with
clients facing, or potentially facing,
debt challenges.
But for many clients GRG isn’t
a lifeline at all, or a very positive
experience.
“It more or less destroyed me,
business wise. They were putting me
under extreme pressure. They wanted
me to sell properties, something I
wasn’t keen to do,” the client said.
Even though he is only half way
through the process, the intermediary
redress has been transformative to him.
“It means we can start doing business
again,” he says. “We can pay off loans,
get the company out of GRG and get
back to our relationship with our bank
on the High Street.”
Many businesses who suffer from
the strain of a Swap want to terminate
all dealings with the bank that got
them into such a situation. Not so in
this case, for his main concern was
simply to get out of the grasp of GRG
and back with his longstanding RBS
banking team, which apart from the
lapse in judgment in relation to the
swaps have been highly supportive of
his businesses and several of his new
ideas in construction and energy.
“The relationship with Seneca has
been so professional. I had started the
process of complaining to the bank, but
this route has worked out well for me.”
For Amy Cunningham at Seneca
Banking though, there are a number
of issues that arise out of this case.
Principally, the way that banks deal
with customer complaints on missold
Swap products.
“The banks still tell people they
don’t need representation, but they do.
We’ve seen situations where clients have
been made unreasonable and unfair
offers,” she says.
“Both the FCA and the Banks
continually advise customers that they
do not need representation due to the
review being a customer centric process.
Yet we see some banks lawyering up
for the verbal testimony meetings.
At no point have we seen any bank
alert a customer to the fact that they
should consider protecting their legal
position, and their right to litigate, in
case the review does not provide the
redress they believe they are entitled
to. Too often we get new clients where
limitation ran out only months, and in
some cases days, prior to contacting us.
“It is highly inappropriate for
the banks and in particular the FCA
to advise customers that representation
is not needed when no party involved
in the Review process is in a position
to independently advise the customer.
If the banks are able to revert to their
solicitors during the review and given
the large in house legal teams at their
disposal, it is inappropriate that they
advise customers such representation
is not needed,” she says.
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