Advertisement

'Goes away or goes under'? Are the banks dragging their feet on mis-selling?

RBS has been accused of 'deliberately delaying' finding on compensation claim. Photo: John Giles/PA Wire

After a vigorous campaign last year, thousands of businesses around the country were rewarded by the promise of compensation for mis-selling of interest rate 'swaps', a bit like insurance policies.

They were policies sold to protect them from the risk of soaring interest rates, that with years of rock bottom interest rates, actually led to them losing out.

But that promise is taking an awfully long time to keep.

Only just over a thousand claims have been settled so far, with some going under before the case could be resolved.

And one Derby charity is tonight accusing RBS of dragging its heels over their claim, leaving them at risk of having to close down services.

Direct Help and Advice is a debt advice charity. Credit: Barry Cronin/PA Wire

Debt charity Direct Help and Advice believes its future is in jeopardy after they were sold an interest rate policy they claim they should not have been given, costing it at least £150,000.

They claim the bank persuaded them to take on the deal in early 2009 with the promise that it was a 'zero cost' option.

They also say they were not told it would cost £250,000 to exit the deal.

The charity says the hearing considering its claim was back in August, but they still are waiting, leaving the future of the charity's finances - and its services for vulnerable people - uncertain.

Rafe Nauen, Chair of Trustees, said:

This is a very difficult time for us. We have been asking the bank repeatedly for a decision and we were meant to be prioritised, but we have been receiving no information at all.

We have little choice but to assume that RBS is deliberately delaying giving its decision in the hope that we will go away or go under; either way it will get them out of paying any compensation.

We are a small charity and being continually held at arms’ length by the bank makes it very difficult for us to plan ahead properly. It is a classic case of the little man versus the big institution but we will not simply disappear to make life easier for the Royal Bank of Scotland.

RBS told ITV tonight that the charity's case is likely to be resolved soon and they have apologised for the frustration of it taking some time.

We are sorry to hear of the frustrations experienced and can confirm that this enquiry is in the very latter stages of review by the Independent Reviewer.

We have advised the customer of the reason for the delay and hope to have this matter resolved shortly.

– RBS spokesperson

The process to resolve claims over mis-sold swaps is not necessarily straightforward.

Industry sources have suggested that buyers should have been more aware of the nature of the deals they were signing up to.

But many customers - the DHA charity included - believe that the risks were never pointed out to them, and that the banks are now dragging their heels in making up for past mistakes.