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RBS secretly charged 80% interest on loan
Georgia Warren, Banking and Jon Ungoed-Thomas
div#related-article-links p a, div#related-article-links p a:visited { color:#06c; } IN EARLY spring, a West Country businessman, Duncan Birch, and his wife Debbie feared they might be among the first victims of the credit crunch. A letter to the couple from their bank claimed they owed more than £100,000.
But what was particularly galling was that the large sum being claimed related to a debt of less than £25,000 in the 1990s which they believed had beenpaid off. They were baffled and concerned at the size of thedemand.
Two years earlier, RBS had been asking for £8,500 to settle their case, which they had been unable to afford. How on earth had this risen to more than£100,000?
According to internal banking documents obtained by the Birches, from Torrington, Devon, they claim to have found evidence that new accounts and loans were created in their name. At one stage, 80% was being charged on one account.
Related Links
It appears this weekend that the Birches stumbled upon a highly questionable practice in the debt collection branch of RBS in Telford, Shropshire, whereby new accounts and loans were systematically created without customers’ permission. In some cases, loan documents were even drawn up for the accounts.
According to RBS, these accounts were an internal bookkeeping device and the debts were never meant to be collected or even divulged to the customers. It seems a strange accounting practice, and last week the bank was unable to explain its exact purpose. “This is simply an administrative practice that has absolutely no impact on the [actual] debt or the liabilities,” said an RBS spokesman. John Healey, a former Treasury minister and now a local government minister, is to meet Stephen Hester, the new RBS chief executive, to establish the number of new loanaccounts created without customer consent and the number of customers who may have been wrongly pursued. “There are clearly questions for the bank to answer,” he said.
The Birches insist they are being pursued for the debts from these accounts. They have had legal charges put on their home by RBS at Barnstaple county court. They say it means when the home is sold, they will be liable to pay RBS about £70,000.
“They claim we owe this ridiculous amount and it’s almost ruined our lives,” said Birch, 46, last week. “They have certainly pursued us for money in these accounts which were created without our consent.”
In the 1990s, the Birches started a company which created printed T-shirts. The business was initially successful, but foundered when one of their main clients went bust, forcing them to close their business with about £24,000 of debts at the bank.
They agreed to pay back RBS at £300 a month, on the basis that interest and charges would be frozen. They paid back £7,500 but were then unable to make further payments.
After a county court judgment against them in 1999, they again started paying back £300 a month. By 2006, according to their own estimates, they had paid back £33,000.
At this point, RBS offered to settle the case for £8,500, but the couple could not afford the one-off payment.
Then in early 2008, the bank claimed the Birches owed more than £100,000 and put the legal charges on their home.
Armed with advice from online internet forums, the Birches made a data protection request to the bank. The documents they received detailed a fascinating trail showing the numbers on their accounts had been changed and three new “capital and interest” loans created without their consent.
While the couple thought they were paying back debts on which no interest was due, high rates were in fact being levied.
A bank statement for Debbie Birch’s account, which has been seen by The Sunday Times, shows that interest of £15,883 was charged in just one quarter in 2001.
According to another document, the Birches were being charged 80% interest when they were trying to pay back their debts. The bank claims the error was rectified.
There are other victims. Paul Walton, 41, from Rotherham, South Yorkshire, discovered that RBS had created different accounts in his name without his consent. He also demanded bank documents under data protection laws after being told in 2006 he owed £16,000 on a loan taken out eight years earlier for less than £9,800.
The documents showed his accounts had been changed and a previous overdraft with the bank converted to a “flexible capital and interest loan”. He was also sent two loan agreements that had been drawn up without his consent.
According to a letter sent to Walton’s MP, Healey, in November last year, a senior banking official said: “I confirm that Mr Walton has never signed or agreed to these loans. The loans have never existed. The forms were inaccurate and sent in error.”
RBS said the court judgment against the Birches governed the amount they owed and “this is all they have been asked to pay”.
The spokesman said the bank accepted it had made errors in regards to Walton. Significant interest had been charged on accounts in his name but this was an “administrative” process that had no bearing on the sum he owed.
This weekend, the bank was unable to say how much the Birches owed or how the debts had mounted up.
“We just can’t see any light at the end of the tunnel,” said Duncan Birch.
source: Couple stung by loan - Times Online
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Darn it, I bodged the first copy and past :o
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RBS secretly charged 80% interest on loan
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THe bloody link does not allow a copy and paste
It basically says that
ROYAL Bank of Scotland has secretly changed customers’ overdrafts into personal loans with up to 80% interest, generating debts of as much as £100,000, an investigation has revealed.
The bank, which was effectively nationalised 10 days ago, has admitted that its debt collection branch drew up new loan agreements and accounts for customers without their consent. MPs this weekend questioned whether the scheme was legal.
“Victims” of the changes claim the bank has demanded back money on loan accounts created without permission. The bank denies trying to claim the money and says the new loan accounts were “purely” for administration.
John Healey, a formerTreasury minister and now a local government minister, said the bank had demanded payments from one of his constituents on spurious debts built up through one of the loan accounts. “The bank says these accounts were for administration, although their exact purpose is unclear, but the system does not appear tight enough to prevent them becoming the basis of real debt demands and court action. It is deeply disturbing,” Healey said. Duncan and Debbie Birch believe they are being pursued for debt accumulated on new loans created without their permission. They say a £24,100 overdraft ballooned into a debt of £100,000, even though they say they had paid off £33,000.
Documents show that at one point the couple were being charged an interest rate of 80%, although the bank says this was rectified. Yet it has now obtained a legal charge of £70,000 on their home.
RBS said it was never intended that debts in internal accounts should be collected.
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I am not going to make any comment on the contents of the article about RBS and CMS in Telford.
Georgia Warren, Banking and Jon Ungoed-Thomas
div#related-article-links p a, div#related-article-links p a:visited { color:#06c; } IN EARLY spring, a West Country businessman, Duncan Birch, and his wife Debbie feared they might be among the first victims of the credit crunch. A letter to the couple from their bank claimed they owed more than £100,000.
But what was particularly galling was that the large sum being claimed related to a debt of less than £25,000 in the 1990s which they believed had beenpaid off. They were baffled and concerned at the size of thedemand.
Two years earlier, RBS had been asking for £8,500 to settle their case, which they had been unable to afford. How on earth had this risen to more than£100,000?
According to internal banking documents obtained by the Birches, from Torrington, Devon, they claim to have found evidence that new accounts and loans were created in their name. At one stage, 80% was being charged on one account.
Related Links
It appears this weekend that the Birches stumbled upon a highly questionable practice in the debt collection branch of RBS in Telford, Shropshire, whereby new accounts and loans were systematically created without customers’ permission. In some cases, loan documents were even drawn up for the accounts.
According to RBS, these accounts were an internal bookkeeping device and the debts were never meant to be collected or even divulged to the customers. It seems a strange accounting practice, and last week the bank was unable to explain its exact purpose. “This is simply an administrative practice that has absolutely no impact on the [actual] debt or the liabilities,” said an RBS spokesman. John Healey, a former Treasury minister and now a local government minister, is to meet Stephen Hester, the new RBS chief executive, to establish the number of new loanaccounts created without customer consent and the number of customers who may have been wrongly pursued. “There are clearly questions for the bank to answer,” he said.
The Birches insist they are being pursued for the debts from these accounts. They have had legal charges put on their home by RBS at Barnstaple county court. They say it means when the home is sold, they will be liable to pay RBS about £70,000.
“They claim we owe this ridiculous amount and it’s almost ruined our lives,” said Birch, 46, last week. “They have certainly pursued us for money in these accounts which were created without our consent.”
In the 1990s, the Birches started a company which created printed T-shirts. The business was initially successful, but foundered when one of their main clients went bust, forcing them to close their business with about £24,000 of debts at the bank.
They agreed to pay back RBS at £300 a month, on the basis that interest and charges would be frozen. They paid back £7,500 but were then unable to make further payments.
After a county court judgment against them in 1999, they again started paying back £300 a month. By 2006, according to their own estimates, they had paid back £33,000.
At this point, RBS offered to settle the case for £8,500, but the couple could not afford the one-off payment.
Then in early 2008, the bank claimed the Birches owed more than £100,000 and put the legal charges on their home.
Armed with advice from online internet forums, the Birches made a data protection request to the bank. The documents they received detailed a fascinating trail showing the numbers on their accounts had been changed and three new “capital and interest” loans created without their consent.
While the couple thought they were paying back debts on which no interest was due, high rates were in fact being levied.
A bank statement for Debbie Birch’s account, which has been seen by The Sunday Times, shows that interest of £15,883 was charged in just one quarter in 2001.
According to another document, the Birches were being charged 80% interest when they were trying to pay back their debts. The bank claims the error was rectified.
There are other victims. Paul Walton, 41, from Rotherham, South Yorkshire, discovered that RBS had created different accounts in his name without his consent. He also demanded bank documents under data protection laws after being told in 2006 he owed £16,000 on a loan taken out eight years earlier for less than £9,800.
The documents showed his accounts had been changed and a previous overdraft with the bank converted to a “flexible capital and interest loan”. He was also sent two loan agreements that had been drawn up without his consent.
According to a letter sent to Walton’s MP, Healey, in November last year, a senior banking official said: “I confirm that Mr Walton has never signed or agreed to these loans. The loans have never existed. The forms were inaccurate and sent in error.”
RBS said the court judgment against the Birches governed the amount they owed and “this is all they have been asked to pay”.
The spokesman said the bank accepted it had made errors in regards to Walton. Significant interest had been charged on accounts in his name but this was an “administrative” process that had no bearing on the sum he owed.
This weekend, the bank was unable to say how much the Birches owed or how the debts had mounted up.
“We just can’t see any light at the end of the tunnel,” said Duncan Birch.
source: Couple stung by loan - Times Online
</div></div></div>
------------------------------- merged -------------------------------
Darn it, I bodged the first copy and past :o
------------------------------- merged -------------------------------
RBS secretly charged 80% interest on loan
------------------------------- merged -------------------------------
THe bloody link does not allow a copy and paste
It basically says that
ROYAL Bank of Scotland has secretly changed customers’ overdrafts into personal loans with up to 80% interest, generating debts of as much as £100,000, an investigation has revealed.
The bank, which was effectively nationalised 10 days ago, has admitted that its debt collection branch drew up new loan agreements and accounts for customers without their consent. MPs this weekend questioned whether the scheme was legal.
“Victims” of the changes claim the bank has demanded back money on loan accounts created without permission. The bank denies trying to claim the money and says the new loan accounts were “purely” for administration.
John Healey, a formerTreasury minister and now a local government minister, said the bank had demanded payments from one of his constituents on spurious debts built up through one of the loan accounts. “The bank says these accounts were for administration, although their exact purpose is unclear, but the system does not appear tight enough to prevent them becoming the basis of real debt demands and court action. It is deeply disturbing,” Healey said. Duncan and Debbie Birch believe they are being pursued for debt accumulated on new loans created without their permission. They say a £24,100 overdraft ballooned into a debt of £100,000, even though they say they had paid off £33,000.
Documents show that at one point the couple were being charged an interest rate of 80%, although the bank says this was rectified. Yet it has now obtained a legal charge of £70,000 on their home.
RBS said it was never intended that debts in internal accounts should be collected.
------------------------------- merged -------------------------------
I am not going to make any comment on the contents of the article about RBS and CMS in Telford.
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