Get a Grip of this Mess! RBS receives another fine, as the shambles continues

Aug 28, 2014   //   by Keith McDonald   //   Commentary / Editorial, Latest Updates  //  Comments Off on Get a Grip of this Mess! RBS receives another fine, as the shambles continues

RBS Branch Interior

Beggering hell. The Royal Bank of Scotland received its SIXTH fine in just four years this week after an investigation by the city regulator uncovered some shocking mortgage advice statistics.

The Financial Conduct Authority fined the bank £14.5 million after it discovered that just 2 out of a sample of 164 mortgage cases between 2011 and 2013 were handled suitably.

Despite being found culpable of inadequate advice a whopping 99% of the time, the bank even managed to negotiate a third off the original fine for owning up and paying early.

At £14.5 million, it feels a bit like a slap in the face compared to the £3 billion the bank put aside for PPI mis-selling during the first three months.

Despite being 80% owned by the taxpayer, the bank continued to run slipshod over its customers, with insufficient procedures in place to monitor the faults.

Issuing the fine, the regulator said the bank had been warned about mortgage advice issues in 2011, and that it had taken over a year for anything to be done about it.

Only when Ross McEwan replaced Stephen Hester as chief executive did systems begin to change.

RBS chief executive Ross McEwanResponding to the fine, Mr McEwan (pictured right) said: “When I joined the bank we completely overhauled our processes, and took all our mortgage advisers off the front line for an extensive period of time to get the training required.”

Yet, the bank’s staff continued to provide substandard mortgage advice for another seven months, according to the regulator’s findings.

Moving On…

Perhaps now we’d like to believe that this is the last stung palm of a blighted past. Is the future of RBS in safe hands? I’m not so sure.

The new chief’s philosophy is all about plain-Joe retail products. The bank has axed enticing offers – balance transfer credit cards, bonus-laden savings accounts, etc – preferring simple, transparent products instead.

Only, it’s debatable whether this is really helping the taxpaying customers that have kept the bank afloat.

As Barclaycard extends its balance transfer offer to 33 months and Halifax offers an unprecedented 20 months at 0% on purchases, competition is looking healthier than ever.

And let’s get it straight: whatever one may think about the ethics of ‘teaser rates’ on products, it’s healthy competition that is good for consumers, and that’s a race that RBS has purposefully withdrawn itself from.

What’s it offering instead? An ISA worth just 0.75% for savers with any less than £25,000, and a ‘clear’ low-rate credit card, which, as Martin Lewis has shown, is anything BUT as transparent as the marketing suggests. The bank cannot even stick to the basic principles it now claims to promote.

What is ‘clear’, however, is that somebody needs to get a grip of this shambles and get the damn bank to start serving rather than abusing the people who keep it afloat.

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