RBS accused after landlady left on brink of bankruptcy

By Grimsby Telegraph | Posted: 1 Feb 2018

A PUBLICLY-owned bank is under investigation by MPs after being accused of leaving a Grimsby landlady teetering on the edge of bankruptcy.

MPs on the Treasury Committee have announced an inquiry into the Royal Bank of Scotland’s Global Restructuring Group (GRG) after allegations that the unit pushed small companies into bankruptcy in order to cheaply buy-up their assets.

Andrea Willows, who owned nine properties, is currently awaiting a bankruptcy hearing after the GRG asked for £635,000 in loans to be paid back in full.

After spending £45,000 – including much of her firefighter husband’s pension – on fighting the move, Mrs Willows has turned to Grimsby MP Melanie Onn for help.

The town’s MP said her constituent, who she described as a “good landlord”, had done “nothing wrong” but had now “lost everything”.

The GRG unit – an offshoot of the publicly-owned Royal Bank of Scotland (RBS), which also runs NatWest – operated between 2005 and its closure in 2013. 

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It was marketed by RBS – which was bailed-out by taxpayers in 2008 – as a turnaround specialist which could help businesses which experienced financial difficulties.

But Financial Conduct Authority investigators found “inappropriate action” was experienced by 92 per cent of the “viable firms” that GRG dealt with.

Ms Onn, Labour’s housing spokeswoman, raised Mrs Willows’ plight in Parliament, telling ministers of the “impossible” situation her constituent had been put in.

“She had to come up with the full cost of multiple loans to pay off about £635,000, which made things completely impossible for her,” she said in the House of Commons.

“That is exactly what these banks have done – they have made it impossible for hard-working people to continue to run their businesses although they were not in trouble in the first place.”

Speaking after the debate, Ms Onn said: “This is a David and Goliath situation – and there are a lot of Davids all around the country. Mrs Willows always made her loan repayments on time and she never took a repayment break. She was a good landlord and she told me she had some very vulnerable people in her properties – some of them even referred from the local authority’s homeless service. She in fact adapted one of her homes for a disabled tenant.

“Her and her husband have spent a fortune in legal fees to get to the bottom of this – it has been so stressful for them. 

“This is not her fault. All she did was move her product to a bank – she did nothing wrong but has lost everything.”

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RBS said Mrs Willows’ business was in “financial difficulty” and so GRG made the decision to appoint receivers and took the properties off the Grimsby resident. 

Mrs Willows has accused the receiver of mismanaging the houses. She is said to have told Ms Onn that the receivers stopped taking rents and failed to carry out maintenance on her properties, meaning her company had no income and caused the tenants to vacate.

The receivers are then alleged to have taken out a £100,000 overdraft in her name and are said to be refusing to allow her access to her company’s financial details, preventing her from filling out a tax return. Nicky Morgan, chair of the Treasury committee, said the MPs’ inquiry wanted to ensure small businesses were “treated fairly when they borrow from banks”.

The former education secretary said: “The case of GRG has undermined the trust of small firms in banks, and highlighted the imbalanced and potentially exploitative relationship between banks and small and medium-sized enterprises.

“Little has changed since GRG to prevent similar mistreatment happening again, nor to guarantee victims access to fair and reasonable redress.”

A spokeswoman for RBS said: “We recognise that it is stressful when a business is experiencing financial difficulty. 

“The bank provided extensive forbearance to this customer after the loans expired but ultimately had to appoint Law of Property Act Receivers to market the properties in order for the loans to be repaid.”

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