LONDON (Reuters) - Royal Bank of Scotland (RBS.L) said a scheme to compensate small firms hurt by its restructuring unit will close to new complaints after it paid out just 10 million pounds so far for direct losses.
RBS announced the scheme in November 2016 and set aside 400 million pounds to compensate thousands of small businesses that say they were mistreated by RBS’s Global Restructuring Group (GRG).
The bank said on Friday that it was closing the unit to new claims after hearing from a fraction of the firms eligible, some of whom have said their firms were pushed into bankruptcy GRG and stripped of their assets.
RBS Chairman Howard Davies said with the number of complaints continuing to decline, it was the “appropriate” time to give customers notice of its closure.
From the 16,000 firms eligible, RBS said it had received just 1,230 complaints as well as a further 165 from customers outside of the scheme’s scope. The rate of complaints has fallen to six per week from a peak of 35 in December 2016, it said.
In addition to the 10 million pounds compensation for direct losses, the bank said it has offered 115 million pounds in automatic refunds for fees charged by GRG.
While RBS rejects the most serious allegations against the unit, it has accepted some wrongdoing.
The scandal still dogs the British lender’s efforts to reform its reputation almost a decade on.
“From the outset, the GRG redress process has moved at a snail’s pace. A decade on from many of these cases arising, we still have a situation where a third of claims are unresolved,” said Mike Cherry, chairman of the Federation of Small Businesses.
The bank had set no timeframe on how long the scheme would run.
GRG handled some 12,000 troubled small firms between 2007 and 2012 alone.
In May, RBS extended the remit of the redress scheme to consider appeals for indirect losses following criticism of its handling of complaints from former customers and politicians.
RBS said it would write on Friday to all remaining eligible customers to inform them of the scheme’s closure to new complaints on Oct. 22. After that date, customers’ only recourse will be the bank’s usual complaints’ procedure.
Of the complaints it has received, RBS said it had concluded 803 cases, upholding in full or in part just under half of that figure. A retired judge that oversees the scheme, William Blackburne, has received 169 appeals against the bank’s compensation decisions. Of the 55 he has concluded, 15 were upheld.
The bank has received four claims for consequential losses so far, it said.
Additional reporting by Lawrence White; Editing by Emelia Sithole-Matarise and Susan Fenton