RBS Business Banking | About the review

About the review Interest Rate Hedging Products: Sales review process

09 August 2013

The review process

We are progressing the review process as quickly as possible and are prioritising those customers who we know are in financial difficulties and those who were part of the pilot. The first stage we are looking to confirm is that a customer is, for the purposes of this review, classified as ‘non-sophisticated’. We will write to customers to confirm this to them and advise them of the next steps. We will also write to customers who are classified as ‘Sophisticated’, using the criteria laid down by the FCA*, to let them know that those sales do not fall within the scope of this review. More information about ‘Sophistication’ can be found on the FCA’s website.

Sales to ‘non-Sophisticated’ customers will be reviewed in order to establish:

  • whether the sale met the required regulatory requirements;
  • whether any redress is due; and
  • if redress is due, a fair and reasonable redress outcome.

For certain more complex products it has been agreed with the FCA that redress may be due. If you purchased one of these more complex products you will be advised. Please see the FAQ’s about redress, below, for more information.

More information about the relevant products and the FCA’s criteria can be found on the FCA’s website.

The Independent Reviewer

An Independent Reviewer, whose appointment was approved by the FCA, is supervising all aspects of the review. All decisions and conclusions reached in the review will be overseen by and agreed with the Independent Reviewer. You can find more information about the role of the Independent Reviewer on the FCA’s website.

Having your say

Customer participation is an important element of this review. For this reason, when we contact you, we will be encouraging you to provide us with any information you think might be relevant to your IRHP sale(s). This might be providing us with your recollection of events or any relevant documents. This can be done by letter, e-mail, telephone, or face-to-face.

Sharing information with us will give us a fuller information base and help ensure we reach a fair and reasonable outcome in light of your individual circumstances. We will write to you to let you know the outcome of the Sophistication test and if you are assessed as non-sophisticated we will ask if there is any information you would like to provide to us.

Should you decide to provide information by telephone or in a face-to-face meeting, you can request for it to be in the presence of the Independent Reviewer. If you have advisors who you would like to attend this meeting, they will be welcome.

Sharing information with us will give us a fuller information base and help ensure we reach a fair and reasonable outcome in light of your individual circumstances. We will write to you to let you know the outcome of the Sophistication test and if you are assessed as non-sophisticated we will ask if there is any information you would like to provide to us.

An accurate record

We hope that you take the opportunity to provide us with any additional information. If you decide to tell us about the sale(s) by telephone, or in a meeting, we will record the conversation. This will ensure that we capture a full and accurate record of everything you tell us. We will provide you with access to the recording. If you prefer, you can choose to have a note-taker present rather than having the meeting recorded. However, during our pilot review, we found some customers felt that notes were not detailed enough to capture all their points across accurately, and therefore we would prefer to record the conversation.

Prioritisation of customers in financial difficulty

We have agreed with the FCA to prioritise customers who are experiencing financial difficulties. Customers who consider they are in financial difficulty but are not currently receiving specialist support from the bank should contact their Relationship Manager so that appropriate support can be arranged.

If you no longer bank with us, you will need to provide us with information to show that your situation requires us to prioritise your case on the grounds of financial difficulty.

Factors we will take into consideration include:

  • Severe risk of insolvency
  • Severe creditor pressure
  • Serious cash flow issues
  • Receivers have been appointed

Information in relation to any financial difficulty can include:

  • A letter from your current bank explaining any specialist support you are currently receiving and that you are in financial difficulty.
  • Any recent accounts that indicate cash flow pressure or similar
  • Correspondence from any Liquidators, Receivers, Administrators or similar

More information about prioritisation can be found on the FCA’s website.

Suspension of Payments

We have also agreed with the FCA that where we have established a customer is in financial difficulty we will, at the customer’s request, consider whether to suspend the collection of hedging payments until the review is complete.

Please note that depending on the outcome of the review any outstanding payments may still be due.

What will happen next?

We will write to customers involved in the review at each stage of the process to explain our findings and discuss next steps.

If at the end of the review you are dissatisfied with the outcome

You may be able to take your complaint to the Financial Ombudsman Service (FOS), but there are eligibility criteria for doing so. Please refer to the FOS website for further details. If you are not eligible for the FOS you may wish to consider seeking legal advice.

More information

General information regarding the review can be found on the FCA’s website.

* The Financial Services Authority has been replaced by the Financial Conduct Authority and Prudential RegulationAuthority as required by the Financial Services Act 2012. The Financial Conduct Authority became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority

Having your say

 

What is having your say?

When we write to you, you will have the opportunity to provide any information you may wish to share about the sale of your IRHP. This can be provided in writing, over the telephone or face to face.

You are actively encouraged to provide this information and can do this at any stage.

 

Should I give the Review Team more information?

An important part of reviewing each IRHP is understanding the sale from the customer’s perspective. As such, we actively encourage you to provide more information.

The FCA also states in its Report, ‘Interest Rate Hedging Products - Pilot Findings’, that it would encourage all customers to take advantage of the opportunity to engage in the review. The FCA reports that they have received positive feedback from customers on the engagement process, and that they have seen a number of cases where customers’ input into the process has affected the outcome of the review.

Information may be provided to the review team at any time, however we would suggest you do not do this until you have been advised of your inclusion in the review following the Sophistication test. We will advise you of the result of the test and invite you to have your say at that time.

 

Who can attend the meeting if I choose to provide more information?

If you would like to provide more information you can request for the Independent Reviewer and/or an appointed advisor to be present when you provide further details via phone or face to face.

The role of the FCA and the Independent Reviewer

 

What is the FCA saying about the review?

The latest FCA information is available on the FCA website.

 

Who is performing the review? How do we know that customers will be treated fairly?

The review will be performed by a separate and independent case team within Royal Bank of Scotland. This will be carried out under the scrutiny of an Independent Reviewer. The FCA has required the Independent Reviewer to be appointed so that customers who bought IRHPs can be confident that their case will be reviewed objectively and consistently.

We are committed to ensuring that all customers are treated fairly. In all cases, full and final decisions will be reviewed by the Independent Reviewer to ensure that the proposed outcome is fair and reasonable.

 

Who are the Independent Reviewer and the case review team?

The Independent Reviewer is also known as the Skilled Person. There is information detailing the role of the Independent Reviewer on the FCA website.

The case review team comprises people who are independent from the relationship teams and who were not involved in the product sales process.

The case review team has been trained in line with FCA principles and all of the team are accredited. Notwithstanding this, in all cases their work is reviewed by the Independent Reviewer.

Should there be a conflict of interest at any point during the review there is a second Independent Reviewer in place to resolve this.

Complaints

 

I want to make a complaint about the review or aspects of the sale of my IRHP. How do I do this?

You can make a complaint by any of the following methods:-

 

I have made a complaint relating to IRHPs - what is happening with this?

All customer complaints are acknowledged upon receipt. Where you have made a complaint about your IRHP, this will be considered under the review, outside of the bank’s normal complaints process.

The response to any complaint will be included as part of the final outcome letter to you in relation to the review.

Where you are outside the scope of the review (or you fall outside the scope of the review following the sophistication test), your complaint will be investigated in line with the bank’s normal complaints process.

 

Can I use a Claims Management Company to deal with my case?

The review process has been approved by the FCA, it is not complicated and the review will be overseen by an Independent Reviewer, so you do not need to pay for specialist advice in order to achieve a fair and reasonable outcome.

Here is what the FCA has to say about claims management companies: “There are claims management companies who may offer to submit a customer’s complaint to the bank or the FOS. However, they will charge for using their services and this could involve the payment of a significant fee to a claims management company (relative to the amount of any redress received). Customers do not need to use a claims management company because the process is straightforward.”

 

What rights do I have under the Financial Ombudsman Service (FOS)?

If you are not satisfied with the outcome of the review you will have the opportunity to refer your complaint to the FOS, subject to meeting their eligibility criteria. Please refer to the FOS website for further details. If you are not eligible for the FOS you may wish to consider seeking legal advice.

Get in touch Contact us

How do I contact the review team?

Call us

0800 056 7100

Calls may recorded

Write to us

The IRD Review Team, PO BOX 70749, London EC2P 2LY

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