For years I warned people in the UK about the dodgy practices of British banks, in particular the use of excessive fees to bankrupt individuals and businesses so that the self-same banks could in turn buy the assets back on the cheap. Then sell them for a huge profit later. There were a few stories about this when I lived in the UK in the mainstream media and I had heard of excessive fees being used to punish people who without the fees would have been perfectly ok. Now after years of passing this message around it is official, Royal Bank of Scotland has been ripping off it’s customers for years (allegedly) by putting perfectly healthy businesses in to it’s Global Restructuring Group so that it can either extract massive fees from them or so even less ethically it can sell the assets on the cheap to one of it’s own subsidiaries. In one case a senior RBS executive sat on the committees of both its restructuring unit (designed to help) and the property unit (which later bought up the assets). Of course when your annual bonus benefits from such decisions who can blame him?
According to leaked emails on Buzzfeed and an investigation by BBC Newsnight the practice was widespread and involved more than 16,000 businesses. Of these 16,000 less than 6% were returned to normal banking facilities. It should be said the aim of this unit of RBS was officially to help companies return to financial strength and not make a profit. It was never there to make a profit, until leaked documents from an insider pointed to it being a core profit centre for the bank. You can also hear a first hand account of the actions of Royal Bank of Scotland in the above episode of Kaiser Report. Why one should always take the Kaiser Report with a pinch of salt, most of the time the underlying stories are spot on! So well done to Max and Stacy for banging on the corrupt drum for some years!
On the face of it this may sound like nothing but the effect for many people was the loss of their home, marriage and in some cases their lives. The GRG behaviour sadly resulted in suicides. But as any UK Bank executive will tell you death can also lead to a profit for the bank!
Bank of Scotland, I suspect you are next… better get those document shredders going!