Ulster Bank to close SME redress scheme as complainants up the ante
Businesses impacted by bank’s restructuring unit have until year end to seek compensation
Ulster Bank will give new complainants up until the end of the year to seek compensation from a scheme that was set up for companies whose businesses were impacted by being put into a controversial restructuring unit during the financial crisis.
The lender is currently issuing a follow-up letter to about 2,000 Irish customers who were put into the group’s now-defunct global restructuring group (GRG), informing them that they have until December 31st to file a complaint about their treatment in the division.
The bank’s UK parent, Royal Bank of Scotland (RBS), set aside £400 million (€449 million) two years’ ago to cover redress and compensation after the Financial Conduct Authority in London concluded the group was guilty of “systemic” mistreatment of distressed firms that came to it for help.
However, the authority cleared RBS of the allegation that it had forced businesses into default for its own benefit while in the GRG unit.
“Since the GRG complaints process was opened to customers in the Republic of Ireland in January 2017, we have received 69 complaints and have worked hard to ensure fair decisions have been reached in response to the issues raised,” a spokeswoman for Ulster Bank said.
Of the 2,000 Irish small- to medium-sized enterprises (SMEs) that went into GRG, about 100 went out of business and a similar number recovered while within the division. Some 1,800 borrowers’ loans were sold on mainly to overseas-based investment firms.
There has been no appetite on the part of policing and regulatory authorities to investigate
Businessman Bill Cullen launched a multimillion-euro legal action earlier this year against Ulster Bank and the receivers of his Glencullen Group, alleging that the bank and its GRG unit targeted his business.
Mr Cullen’s partner, Jackie Lavin, and a group of other borrowers whose facilities were moved to the GRG during the crisis plan to file complaints with An Garda Síochána in Harcourt Square in Dublin and the Police Service of Northern Ireland on Wednesday.
“To date, there has been no appetite on the part of policing and regulatory authorities to investigate,” said Kevin Winters, managing partner of Belfast-based law firm KRW Law Advocates, who says that he is acting on behalf of 50 former GRG clients.
Mr Winters said that the RBS/Ulster Bank compensation scheme “falls way short of expectations in terms of addressing what’s at the root” of the matter.
A spokeswoman for Ulster Bank declined to comment on Mr Winters’ statement.
RBS is set to close its compensation scheme to new complaints in the UK on October 22nd.
Of the 69 complaints received by Ulster Bank, 53 have been deemed to fall within the scope of the GRG complaints process, of which 36 have been assessed, according to sources. The bank has upheld 15 complaints in full or in part.
Customers who wish to make a complaint once the scheme has closed will be able to use the bank’s usual complaints procedure but will not be able to appeal to an independent third party currently involved in the process.