Rbs And 'secret' Loans...

[thefinalbear]

This article appeared today in the Sunday Times..

Georgia Warren and Jon Ungoed-Thomas

ROYAL Bank of Scotland has secretly changed customers’ accounts 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.

Duncan and Debbie Birch from Torrington, Devon, say their £24,100 overdraft ballooned into a debt of £100,000 when new loan accounts were created without their permission.

Documents show that at one point the couple were being charged an interest rate of 80%, although the bank claims this was rectified. Yet the couple say it has now obtained a legal charge of £70,000 on their home.

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Another customer, Paul

Walton, 41, from Rotherham, South Yorkshire, found loan documents drawn up in his name for new accounts. “They were fabricated and there was interest accumulating in the accounts,” he said.

The bank claims the new loan accounts were created “purely” for administration and that it was never intended that the debts should be collected. They were unable to

explain exactly what the purpose of the “administrative accounts” was, why they had created them and how many customers were affected.

John Healey, a former Treasury minister and Walton’s MP, said the situation was “deeply disturbing”.

“The system does not appear tight enough to prevent [these accounts] becoming the basis of real debt demands and court action,” he said.

http://www.timesonline.co.uk/tol/news/uk/article5299256.ece

Is it possible that they are creating 'phantom' loans in order to get access to more bailout cash or to sell them on the government backed rescue schemes? If they are then this is massive..........

[injustice]

I am familiar with Paul Walton, he got his MP involved with his phantom loans.

Link

Pauls story from 2006

Edited December 7, 2008 by injustice

[thefinalbear]

If there is any eveidence that this type of thing is systemic then we should be seeing dawn raid and bankers in jail. I hope this gets properly followed up.

[@contradevian]

If there is any eveidence that this type of thing is systemic then we should be seeing dawn raid and bankers in jail. I hope this gets properly followed up.

Hopefully but I won't hold my breath though.

[injustice]

On a similar subject.

[thefinalbear]

I think that first apperaed on Consumer Action Groutp a while ago........:-) Its a good example of how RBS conducts business which is why I am very, very suspicious of the above stories.

[geezer466]

I think that first apperaed on Consumer Action Groutp a while ago........:-) Its a good example of how RBS conducts business which is why I am very, very suspicious of the above stories.

Why do you say that? Surely the intranet document suggests impropriety on the part of RBS or am I missing something here?

It may not be downright illegal to recreate documents in this way but at best it is severely testing of good banking practice.

[thefinalbear]

sorry I wasnt being too clear. I think it IS downright illegal to recreate docs that way and the fact that RBS seem to be doing it all the time makes me think that there is a lot more to the above stories.

[slurms mackenzie]

Is it possible that they are creating 'phantom' loans in order to get access to more bailout cash or to sell them on the government backed rescue schemes? If they are then this is massive..........

Can overdrafts be securitised?

[bobmo]

These dodgy loans must be inflating their balance sheet a fair bit.

[thefinalbear]

Can overdrafts be securitised?

Can non existant overdrafts be securitised?

[Bloo Loo]

These dodgy loans must be inflating their balance sheet a fair bit.

And they certainly accounted for a few execs bonuses, targeted to sell loans, and well, they got them.....not

[Bjørn]

Here's a zoom-in of the RBS intranet image shown in post#5

So, a document can be "created" in "the style" of a real RBS document and £250,000 can become "value added to the bottom line".

Gives a whole new meaning to the phrase "bank robbers"!

[prognosis]

I have never quite understood RBS and the way the account for 'accounts'

I regularly have accounts with a large positive balances in them that seem duplicated but whenever I try to draw on them the system claims I have insufficient funds. Double entry accounting?

[Bjørn]

Royal Bank of Scotland crookery could fill a book, but it ought to fill a prison.

[RufflesTheGuineaPig]

Is this just RBS creating paperwork so they can securitise credit card debt and overdraft debt?

[Timm]

Is this just RBS creating paperwork so they can securitise credit card debt and overdraft debt?

Whatever it is, it seems a murky practice for a state controlled bank.

[debbbsy]

Hi all,thanks for posting our story. Just wanted to clarify why we believe the RBS create secret loan accounts.

The 'NEW' loan accounts were created by the recovery department in Edinburgh. They closed a business current account with an unsecured debt of £44k [ of which @ £30k was interest & charges]. In June 1996, they closed this account & replaced it with a Business Loan Capital & Interest account.

In March 1997 they did the same with 2 personal current accounts, they became Flexible Loan Capital & Interest Accounts. But they also attached to all these 'New' accounts a quarantee from a business loan that had been paid off in full in 1996. All of this is recorded in their Solicitors files. [We did a SAR on them aswell].

In correspondence with us in Nov 97 the RBS informed us that the we had 'NEW' account numbers because the accounts were being moved to Edinburgh. At the same time, they wrote to their Sols & informed them that we had a Secured Business Term Loan account. There are other discrepencies between what the bank was telling us & what they were telling the Sols. This is why we never realised what was going on.

For whatever reason,whether it was merely for internal accounting, or perhaps the recovery department were paid on bonuses. But they had successfully taken an unsecured debt & turned it into an asset. Which of course inflates their balance sheet.

In Nov 1998 they litigated on these new accounts. They used the 'New' account no's, but the old account types when filing their claim against us. They LIED when they said in the press that these accounts are only for internal accounting purposes.

Debbie

[Converted Lurker]

a question needs to be asked; is there enough individual loans, on single dwellings, to account for the trillions of dollars worth of securitised deals out there? IMHO the global market for securitisation is 50% phantom.

[SHERWICK]

Hi all,thanks for posting our story. Just wanted to clarify why we believe the RBS create secret loan accounts.

The 'NEW' loan accounts were created by the recovery department in Edinburgh. They closed a business current account with an unsecured debt of £44k [ of which @ £30k was interest & charges]. In June 1996, they closed this account & replaced it with a Business Loan Capital & Interest account.

In March 1997 they did the same with 2 personal current accounts, they became Flexible Loan Capital & Interest Accounts. But they also attached to all these 'New' accounts a quarantee from a business loan that had been paid off in full in 1996. All of this is recorded in their Solicitors files. [We did a SAR on them aswell].

In correspondence with us in Nov 97 the RBS informed us that the we had 'NEW' account numbers because the accounts were being moved to Edinburgh. At the same time, they wrote to their Sols & informed them that we had a Secured Business Term Loan account. There are other discrepencies between what the bank was telling us & what they were telling the Sols. This is why we never realised what was going on.

For whatever reason,whether it was merely for internal accounting, or perhaps the recovery department were paid on bonuses. But they had successfully taken an unsecured debt & turned it into an asset. Which of course inflates their balance sheet.

In Nov 1998 they litigated on these new accounts. They used the 'New' account no's, but the old account types when filing their claim against us. They LIED when they said in the press that these accounts are only for internal accounting purposes.

Debbie

Geez! But why am I not in the least bit surprised...