RBS may face further action by financial regulator

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The financial regulator has said it may take “further action” over the way Royal Bank of Scotland mistreated some small business customers.

The Financial Conduct Authority has published an interim report into failings by the RBS division that dealt with struggling businesses.

The Global Restructuring Group was found to have “widespread” mistreatment of customers in some areas.

RBS said it had acknowledged failings and again apologised for its mistakes.

The FCA report identified a number of failings, including that 92% of viable firms handled by GRG suffered “inappropriate action”, such as interest charges being raised or unnecessary fees added.

It was cleared in others, according to the report prepared for the regulator.

FCA chief executive Andrew Bailey said: “We are investigating the matters arising from the [report] and are focusing on whether there is any basis for further action within our powers.”

The bank has set aside £400m for compensation and paid out £115m, chief executive Ross McEwan said.

The BBC reported on a leaked copy of the report in August, leading to political pressure on the FCA to publish more of the findings.

The regulator was initially reluctant to do so, but gave in to pressure from MPs and campaigners.

GRG operated from 2005 to 2013 and at its peak handled 16,000 companies.

But Mr McEwan said the “most serious allegations made against the bank have not been upheld”.

That includes finding the bank did not set out to engineer ways of transferring customers to GRG, or make requests of directors that were “unnecessarily burdensome”.

“The culture, structure and way RBS operates today have all changed fundamentally since the period under review,” he said.

‘Not before time’

The bank has dealt with more than 900 complaints going back a decade, Mr McEwan added.

However, the report found that inappropriate treatment of small business customers was “widespread” in areas including:

  • A failure to support small businesses in ways consistent with good turnaround practice
  • Placing an undue focus on price increases and debt reduction without considering customers’ longer-term viability
  • A failure to handle customer complaints fairly and to deal with certain conflicts of interest

It also found senior GRG managers were encouraged to place “financial objectives first and emphasised the need for continuing financial performance”.

Nicky Morgan, who chairs the Treasury select committee, said: “It has taken the FCA too long to publish its summary of the skilled persons’ report, so this is not before time.”

Mr Bailey is due to appear before the committee on 31 October.

‘Incompetent or criminal’

Bill Esterson, Labour’s shadow business minister, called for a judge-led inquiry, adding: “Trust between small businesses and our financial institutions needs to be restored.”

The RGL management group, which represents some former business customers of RBS, said the FCA report appeared to be a whitewash.

“From what we understand, the FCA has failed to acknowledge the serious and deliberate harm caused to businesses through RBS’ Global Restructuring Group,” it said.

“The FCA is making excuses in its interim report as to why it cannot bring the bank to justice, which does nothing to help redress the devastation inflicted on business owners by RBS.”

Lawrence Tomlinson, author of a 2013 report into GRG, said: “Banks do not treat their customers inappropriately, bankers do.

“The authorities should look at whether these bankers’ behaviour is incompetent or criminal – either way, whoever allowed the scandal at GRG to occur should not be allowed to work in the sector or enable similar ethos and culture to enter other banking institutions.”


Ancestry.com denies exploiting users’ DNA

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A leading genealogy service, Ancestry.com, has denied exploiting users’ DNA following criticism of its terms and conditions.

The US company’s DNA testing service has included a right to grant Ancestry a “perpetual” licence to use customers’ genetic material.

A New York data protection lawyer spotted the clause and published a blogwarning about privacy implications.

Ancestry told BBC Radio 4’s You and Yours its terms were being changed.

Headquartered in Utah, Ancestry is among the world’s largest for-profit genealogy firms, with a DNA testing service available in more than 30 countries.

‘Perpetual’

The company, which uses customers’ saliva samples to predict their genetic ethnicity and find new family connections, claims to have more than 4 million DNA profiles in its database.

Ancestry also stores the profiles forever, unless users ask for them to be destroyed.

The company’s terms and conditions have stated that users grant the company a “perpetual, royalty-free, worldwide, sublicensable, transferable license” to their DNA data, for purposes including “personalised products and services”.

In a statement to You and Yours, an Ancestry spokesperson said the company “never takes ownership of a customer’s data” and would “remove the perpetuity clause”.

It added: “We will honour our commitment to delete user data or destroy their DNA sample if they request it. The user is in control.”

‘Unaware’

Joel Winston, a consumer rights lawyer and former New Jersey State deputy attorney-general, was one of the first to spot the legal wording and to warn of the possible implications.

“Ancestry.com takes ownership of your DNA forever; your ownership of your DNA, on the other hand, is limited in years,” he said.

He added: “How many people really read those contracts before clicking to agree? How many relatives of Ancestry.com customers are also reading?”

Mr Winston also warns that many consumers are unaware of the additional uses of the data.

In its terms and conditions Ancestry makes reference to “commercial products that may be developed by AncestryDNA using your genetic information”.

One customer, Richard Peace, used Ancestry DNA to learn more about his family history.

‘Not happy’

He told You and Yours he “knew nothing” about the commercial use when he signed up for the test.

“I’m not happy about it and today I will be emailing them to ask them not to use the information,” he said.

Ancestry told the BBC: “We do not share user data for research unless the user has voluntarily opted-in to that sharing.”

The company added: “We always de-identify data before it’s shared with researchers, meaning the data is stripped of any information that could tie it back to its owner.”

The ambitious scale of Ancestry’s plans does have support among some academics.

Debbie Kennett, a genetics researcher at University College London, welcomed the aim of building a large, global DNA database.

“For genealogy purposes we really want, and rely on, the power of these large data sets,” she told You and Yours. “A DNA test on its own doesn’t tell you anything at all.”


Wiganers’ ridiculous excuses for getting out of TV License payment

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“I’ve just escaped from jail. I’m due to do another three years, can you come back then?”

This is just one of the many ridiculous and flawed real-life excuses given to TV Licensing by people in Wigan caught watching TV or BBC iPlayer without a licence over the past year. Around 94 per cent of homes across the UK are correctly licensed, but a small minority of people continue to offer TV Licensing Enquiry Officers flimsy excuses as to why they don’t have a licence when caught evading. Top excuses in the area ranged from: “It’s only for the dog, it stops him howling when I’m out – I put it straight off when I come back in as there’s nowt on” to “I don’t need a TV licence, I have a shotgun.

” Dozens of tenuous excuses were collected from towns and hamlets across the UK. A woman from Wigan said: “I’m just looking after the goldfish and it can’t remember what it was watching on TV.” A man from the borough said: “I couldn’t get to the shop to pay as I’ve been constipated so missed a few payments.” Matthew Thompson, TV Licensing spokesperson in the North, said: “We make every effort to find evaders and although excuses we hear can be ingenious, those we catch still need to buy a licence. “We offer help to those struggling to buy and would much rather people buy a TV Licence in small weekly or monthly instalments, than face prosecution and a fine of up to £1,000.”

“A licence is needed not jut for watching and recording live television but for watching or downloading BBC programmes on iPlayer.”


RBS accused of fraud and forgery by customers and ex-employee

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Former business clients of the Royal Bank of Scotland are accusing the bank of systematically manipulating documents to cover up wrong doing.

In an exclusive interview with the BBC, a former RBS employee has come forward to support allegations of document manipulation within the bank. RBS says it categorically denies document manipulation and forgery. Mark Wright started working for NatWest Bank in 1988 and was still there in 2000 when it was taken over by RBS. In 2005, Mr Wright accused two former RBS colleagues of concocting bogus complaints purportedly from five of his customers. He says the employees were from the bank’s Group Compliance Unit established to deter misconduct and malpractice in RBS. He referred to the unit as the bank’s “police”. Mr Wright’s five customers later submitted statements contradicting the bogus complaints. The two accused compliance staff subsequently left the bank.   Mr Wright told the BBC that the bank failed to properly investigate the complaints or accord him the status of whistle-blower. “I had five individual customers who all came forward to me stating that the wording and conversations with this member of staff from group compliance were not their words, so effectively the telephone transcripts didn’t reflect what the customer was saying.” Mr Wright said as a senior manager he had a duty to report the falsifications. “I told my line manager this because he had been affected by the negative rating that Group Compliance had given me over these fictitious five customer complaints and falsifying the customer care calls so I decided to contact them all and the behaviour was the same with all five.”

‘I was suspicious’

Mr Wright said he learned later from colleagues that such misconduct was not uncommon in the bank’s Compliance Unit. “I discovered through a member of staff from Group Compliance that it would be common practice that they would falsify files if they needed to create a certain picture.” Mr Wright said he became increasingly concerned about the way the bank handled allegations of wrongdoing and had wanted a full external investigation because of the serious nature of his allegations. “I was suspicious of wrong doing from 2005 to 2012,” he said.

Mr Wright claims his standing within the bank suffered enormously as a result of his action. His employment status within RBS was changed to “undesirable” when previously he had been classed as “excellent”. Bonuses were also stopped. In 2013 Mr Wright finally took redundancy after his GP diagnosed him with long term mental health issues. The bank upheld one of his grievances. An RBS spokeswoman said the bank was aware of these concerns being raised previously and that they had been thoroughly investigated and responded to. She denied there had been systematic document tampering at the bank.  Mark Wright lives in the constituency of North Norfolk represented by former government minister, Liberal Democrat Norman Lamb. Mr Lamb said he has written to RBS five times to demand a meeting about Mr Wright’s allegations.

How high did this go?

He said: “My fear is that it appears to be more than a few rotten apples behaving badly. There appears to be an institutional culture here that facilitated this corrupt practice. That’s the allegation. “And the way in which they dealt with a whistle-blower, who ought to actually be respected and treated with the utmost seriousness, instead they pushed him through a very long process, the wrong process.” Mr Lamb said: “Treating it as a grievance not going through the proper whistle-blowing process and allowing that individual to be destroyed rather that treating seriously the allegations that he raised and that for me begs the question. How high did this go? Did it go to the very top of the bank? And why are the current leadership not prepared to examine these really serious allegations thoroughly?”  The BBC has also spoken to former business clients of RBS, who also claim fraud and document tampering. The RGL management group is representing many in a planned court action. At least 300 companies plan to sue the bank. James Hayward, chief executive of RGL, told the BBC that the companies were suing RBS on ten grounds of alleged malfeasance including document tampering. “In most cases the end result of what the bank did to their people was the total destruction of their businesses and people’s lives. “These people were intentionally financially and emotionally destroyed. Their only mistake was to trust the bank that they thought was there to help them succeed.” He said he had also seen evidence of document manipulation by the bank.

“If anybody manipulates documents or falsifies documents or forges documents it can only be for two reasons, and that’s to perpetuate a fraud or to cover up a fraud,” Mr Hayward said. “There’s no other reason for doing it. We have come across it. It’s just another instance of an unbelievably appalling sort of corporate conduct.” RBS says it takes any allegations of misconduct very seriously. It’s aware of specific allegations, which have been investigated thoroughly in the past by the bank and, in many instances, externally through bodies such as the Information Commissioner and the courts. The bank added that it had found no evidence to support these customers’ allegations and categorically denied manipulating or falsifying customer records to suit its purposes.


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