YOU NEED TO LET CUSTOMERS HANG THEMSELVES...
As RBS is accused of betraying taxpayers over branch closures, leaked memo shows bank’s sickening greed during financial crisis
RUTHLESS bankers ordered staff to let struggling customers ‘hang themselves’ in an effort to squeeze out every last penny of profit during the financial crisis. A damning memo by a manager at royal Bank of scotland sheds new light on the cut-throat culture at a turnaround unit designed to save failing firms from collapse.
rBs’s Global restructuring Group (GrG) has long been accused of deliberately wrecking firms it was supposed to rescue and seizing their assets.
The note – released by the bailed-out NatWest owner after pressure from MPs – came as rBs bosses were grilled at Parliament over plans to shut vital rural branches across scotland, and shows the extent to which some staff were prepared to go.
entitled Just hit Budget!, it lists a set of principles employees should follow to grab as much cash as possible.
One section reads: ‘rope: sometimes you need to let customers hang themselves. You
have gained their trust and they know what’s coming if they fail to deliver.’
The letter is sure to reignite a row over the GRG, which RBS bosses insist was not systematically trying to destroy customers.
It was only made public after demands from the Treasury Select Committee chairman Nick Morgan, a Tory MP.
Labour MP Wes Streeting, a committee member, said: ‘Most people would be horrified a previously respected brand would behave like a bunch of sharks showing no duty of care to their customers.
‘It’s appalling, and no wonder the committee had to doggedly drag this information out of them.’
The note dates from 2009, after the bank had been handed £46billion of taxpayers’ money to keep it afloat. Thousands of small companies were struggling at the time as the country was mired in recession following a financial meltdown caused by RBS and other banks.
Any businesses struggling to pay back debts to the lender were dumped into the GRG, theoretically with the aim of helping them get back on their feet and protecting the jobs of their workforce.
But the memo tells a very different story.
The author urged workers to lumber companies with sanctions which ratchet up fees if firms in difficulty are unable to pay their bills. Staff were told they must ‘deliver monthly fees or else’, and to sign up customers for deals ‘they cannot afford’ so penalty costs could be imposed.
The memo said that ‘missed opportunities will mean missed bonuses’ and added that business owners should always be pressured into signing documents as ‘if they sign, they can’t complain’.
The author adds that if on one side managers are unhappy fees are not high enough, and on the other the level of charges means the ‘customer’s unhappy, you probably have the balance right’.
The document outlined ‘16 ways to generate income’ but does not mention customers’ welfare once.
Details included avoiding ‘round number fees’ as these may not sound convincing as ‘£5,300 sounds as if you have thought about it, £5,000 sounds like you haven’t’.
It says all customers must be charged a minimum monthly £500 fee and suggests that a customer with debts of £2million who is already struggling should be charged fees of £16,000 a month, for example, as ‘they normally cannot afford this and you can leverage an upside’.
RBS’s present chief executive Ross McEwan said the note was written by a junior manager who no longer works for the lender and was only circulated in three GRG offices.
In a letter to Mr Morgan, he said: ‘The language used in the document was completely unacceptable and the bank does not condone it. It does not reflect bank policy or guidance, either at the time it was written or today.’
The bank, whose current chief executive for personal and business banking is Les Matheson, has set up a £400million compensation scheme for GRG customers who can prove they were mistreated, and is refunding complex fees.
A study by the City watchdog found that 92 per cent of viable businesses which ended up in the GRG were hit by ‘inappropriate action’ at the bank.
At its peak, the unit handled 16,000 companies, which means thousands of entrepreneurs and family owners will have been affected by these mistakes.
The Financial Conduct Authority has refused to publish a full version of its report, which is thought to give details of which management personnel knew what about the scandal.
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