Muldoon Britton was instructed to consider the case of two owners of a hotel.  As has occurred across the board, the hotel owners had been sold an Interest Rate Hedging Product in 2007 by NatWest and in 2012 was moved into RBS’s Global Restructuring Group.  The business was stripped of assets and cash.  Along with tens of thousands of people, the hotel owners wish to understand their legal position, and take action in the High Court if possible.

RBS used GRG to strip NatWest and RBS customers of cash, increased interest costs, re-traded existing hedging for additional profit, sold assets to move lending down to c. 50 to 60% LTV whilst increasing cash intake for the bank, and allowed West Register companies to acquire the assets at bottom of market prices.  The FCA has been investigating GRG for almost three years.  Its final report was sent to the FCA this in October 2016.  However, in light of the disastrous leak of documents by BuzzFeed on 10^th October 2016, the FCA may be considering having to re-write the s. 166 report now that the unethical business practices are known.

However, you should be aware that a “review” similar to the FCA’s IRHP review is almost certainly not going to be possible.  Commercial lending is not regulated by the FCA in the way the sale of IRHPs was/is. The Property Participation Fee Agreements, preferential shares and similar fees imposed by West Register Companies are not only not regulated, but entered into by an entity that is not registered with the FCA.  As such, the FCA could suggest a review to RBS, but RBS is known to have abused the IRHP process by pushing alternative hedging on customers rather than cash redress.  It is likely that any voluntary review by RBS would be tinged with the same issue, and the FCA would have no powers to stop RBS abusing the review.  RBS might agree to a voluntary review process because customers would be unlikely to take legal action and would then be time barred by the end of their review.  RBS may find that attractive.  Contact Muldoon Britton today to consider how to protect yourself from RBS’s unfair treatment of its customers.