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Saving For a Space Ship

Rbs Admits Mis-Selling Enterprise Finance Guarantee Loans To Small Firms

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RBS admits mis-selling Enterprise Finance Guarantee loans to small firms

http://www.businesszone.co.uk/topic/finances/rbs-admits-mis-selling-enterprise-finance-guarantee-loans-smes/59046

RBS has admitted to mis-selling loans through the government'sEnterprise Finance Guarantee scheme which is designed to help companies struggling with credit.

In a statement issued on Thursday the bank said it had identified "a number of instances" where it did not properly explain borrower and guarantor liabilities to small businesses. In total, it has lent over £900m to 9,000 small firms through the initiative.

The EFG scheme is operated by the British Business Bank and provides a 75% government guarantee to lenders loaning money to small businesses. It was originally set up in 2009 to assist companies finding it hard to get a bank loan.

Following complaints from customers and discussions with the British Business Bank, the examination of several EFG customer files revealed that some businesses were not properly informed that the guarantee is for the bank rather than the customer. As a result they did not realise they remained 100% liable for the loan.

A spokesman for RBS, which is 80% owned by the taxpayer, told BusinessZone it plans to contact around 1,800 businesses that have either defaulted or were showing signs of being at risk.

However, he confirmed the company will not make a general announcement to the 9,000 customers who have borrowed money through the scheme and may not have had their liability for the loan properly explained.

The mis-selling led customers to believe the 75% government guarantee was for their benefit, rather than the banks. The RBS spokesman claimed that of the businesses that had defaulted, 85% repaid less than 25% of the loan, meaning they would not impacted by the liability issue........

EDIT : Looking at the Gov owned "http://british-business-bank.co.uk" infoat bottom of page Here

FFS! If by your own admission & disclaimer you say you are not a bank, how can you be allowed to call yourself a bank !!

British Business Bank plc is the holding company of the group operating under the trading name of British Business Bank. It is a development bank wholly owned by HM Government which is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). The British Business Bank operates under its own trading name through a number of subsidiaries, one of which is authorised and regulated by the FCA. British Business Bank plc and its subsidiary entities are not banking institutions and do not operate as such. A complete legal structure chart for British Business Bank plc can be found on this website.
Edited by Saving For a Space Ship

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