RBS denies allegations it manipulated swaps compensation review
By Matt Scuffham
LONDON (Reuters) - Royal Bank of Scotland has denied allegations it manipulated evidence in order to pay lower compensation to small firms mis-sold complex interest rate hedging products.
A report in The Times newspaper said RBS had been accused of providing flawed documents to independent reviewers who oversaw compensation payouts to victims, including a record of a sales call that never took place.
"We categorically deny falsifying customer records to influence the outcome of the review process," an RBS spokesman said on Wednesday.
RBS was one of several British banks found by the country's financial regulator to have mis-sold the products, which were supposed to protect small firms against rising interest rates, but left them facing hefty charges when rates fell.
Businesses also complained they were not warned about the cost of breaking the agreements.
The Financial Conduct Authority (FCA) ordered banks to compensate affected customers and set up a scheme to compensate them overseen by independent assessors, often large accountancy firms. RBS faced more claims than any other bank and set aside 1.5 billion pounds ($2.31 billion) for compensation, more than any other lender.
The Times said it had discovered documents that indicate the bank supplied erroneous customer records to assessors during the review process. RBS said there had been "minor and non-consequential discrepancies" in historical records but the issues raised did not determine the findings of the review.
"An independent reviewer approved the final redress outcome after a review of any documentation deemed relevant by them. We have at all times worked in line with the FCA agreed process to ensure that all customers get fair and reasonable redress," the spokesman said.
The FCA said in June it would review how the redress scheme has operated.
The regulator said on Wednesday that it had received a number of allegations that banks had provided inaccurate or incomplete information to the independent reviewers but had found no evidence to support the claims.
"Based on the information provided to us, and by checking with the independent reviewers and bank records, we have, to date, not found evidence to suggest that the banks had been improperly failing to provide information, or interfered with information provided, to the independent reviewer," it said.
Britain's High Court gave permission in April for a judicial review of the scheme, a decision that could lead to it being overhauled with banks having to re-examine cases.
(Reporting by Matt Scuffham; editing by Adrian Croft)
