* Small companies allege deceit, misrepresentation
* Group claim has grown to 509 businesses - RGL
* Court hearings on TBL loans scheduled for December
* Claim is without substance-Clydesdale parent Virgin Money
LONDON, Oct 15 (Reuters) - Almost 370 businesses have joined a group action suing Clydesdale Bank and its former owner National Australia Bank in a dispute over small business loans that is set for its first day in London’s High Court in December.
The group, which alleges businesses were deceived between 2001 and 2012 when buying fixed rate Tailored Business Loans (TBLs), has snowballed since last year’s launch and now represents 509 smaller businesses and 867 individual loans, according to claims management company RGL Management.
RGL, which filed the latest tranche of claims on Thursday, alleges smaller businesses were wrongly told they faced hefty costs for terminating fixed-rate TBL loans early and that banks inflated interest rates without first informing customers.
RGL is alleging deceit, misrepresentation, breach of contract and unjust enrichment by the banks. It has not put a value to the legal claim.
Clydesdale parent Virgin Money UK dismissed the case as without substance or merit, adding it would continue to defend its position robustly.
“Over recent years we have worked hard to investigate all historic SME (small and medium-sized enterprise) conduct issues and we are confident we have done the right thing for those customers involved,” a spokesman said.
NAB said it did not comment on matters before the court.
A one-and-a-half day pre-trial hearing has been scheduled between Dec. 14 and 16.
More than 6,000 customers of Clydesdale and its Yorkshire Bank brand bought around 8,000 TBLs with embedded interest rate hedging features, classified as unregulated, commercial loans, that left customers facing heavy costs to unwind the hedge if they wanted to renegotiate the loan as interest rates fell.
RGL Management alleges that all fixed interest rate TBL borrowers have “unknowingly and unnecessarily” paid hundreds of millions of pounds of additional costs and interest.
The case is backed by litigation funder Bench Walk Advisers.
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