High Street Banks Face New Investigations 

High Street Banks Face New Investigations 

Aug 28, 2017

Britain’s banks are once again facing questions from consumers and regulators as two high-street banks have this month become embroiled in yet more scandal.

RBS and Co-op bank have both come under fire following damning allegations against both lenders. The Co-op bank, who have found themselves in financial difficulty since they failed to take over 630 branches from Lloyds and a £1.5bn capital shortfall, this month was on the receiving end of allegations regarding former chairman Rev Paul Flowers who has been released on bail after being arrested in connection with a “drugs supply investigation”.

The bank has admitted that it is losing customers following the recent revelations amongst existing scandals. The bank said- “Recent events may have caused some brand and reputational damage, but it is too early to form a definitive view as to the extent of such damage”. The ethically branded company last week faced a vote to decide on the restructuring of the bank, which resulted in the bank being saved from collapse however it means that 70% of the Co-op bank will be owned by investment institutions.

Banking giant RBS has also faced criticism following a damning report by government advisor, Lawrence Tomlinson who has accused RBS of putting viable businesses into default with the intention of making more profit. RBS would allegedly pass ‘risky’ loans to the Global Restructuring Group (GRG) lending division which then generates revenue for the bank through increased profit margins and the purchase of the devalued assets.

Business Secretary Vince Cable has referred the Tomlinson report to city regulators, the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) while Bank of England governor Mark Carney described the allegations as “deeply troubling and extremely serious”.

The FCA has since announced that they will investigate the claims made in the Tomlinson report citing “concerns as to whether RBS has treated customers appropriately, in particular those in financial difficulties”. The FCA will assign an independent person to review the allegations and take necessary action if the findings reveal issues.

While the UK economy continues to build momentum, the continuing stream of banking scandal does little to support consumers working hard to recover from the lasting effects of the recent recession. To learn that both RBS and Co-op are facing investigation over alleged wrong doing is another blow to consumers who over recent years have already suffered as a result of significant and long-lasting banking scandals.

Written by We Fight Any Claim

You may also like