
Leaked Files Reveal Royal Bank of Scotland Harmed British Small Businesses - samsolomon
https://www.buzzfeed.com/heidiblake/dash-for-cash?utm_term=.pb7Mw80k8o#.id72oDYNDg
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Lio
I'd like to see both the RBS executives responsible for this and Clifford
Chance, the legal firm RBS called in to do an "independent review" sanctioned
in some meaningful way.

Their independent review was clearly a sham even down to the point that RBS
denied to MPs that their Global Restructuring Group was being run as a profit
centre for the bank. Something we now know was the deliberate intention from
the top of the bank down.

As someone running a small business the idea that a bank could deliberately
try to destroy its customer's profitable businesses in order to seize their
assets at a knocked down rate is terrifying and should be treated as criminal
matter.

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Scirra_Tom
Oh Clifford Chance. They facilitated a competitor sending us groundless* cease
and desists which caused a great deal of anxiety. Guess I'm not surprised to
see them rubbing shoulders with my favourite bank RBS.

RBS ran a great scam when I was at University, free 3 year railcards for
signing up a student account. No one I knew ended up getting one unless they
complained.

I forgot about it, and complained 6-12 months later and asked for a 2 year
railcard. They denied, and basically said I shouldn't be so entitled and that
the bank are doing students a favour and that I should of complained earlier.

RBS is also a bank I phoned up in tears because I couldn't manage my credit
card debt when I was younger and in a bad time in my life. Was offered zero
breaks. I expressed commitment to repaying the debt, but needed a couple of
months breathing space on the repayments. Nope, not an option.

They are one of the shittiest banks in the world, and I'm always more than
happy to tell people my experiences of them when they pop up in conversation.

* This is my opinion of the letter. Guess I have to make that explicit in this context.

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vidarh
For future reference (or for others..): If you really can't pay in the UK, set
out your expenses and income clearly in a letter, demonstrating that you've
taken reasonable step to limit your spending, address it to all your
creditors, and ask for interest to be frozen and offer what you believe you
can afford (proportional to debt) to pay to each creditor on weekly or monthly
basis. If they refuse, then pursue a debt management plan.

Most creditors in the UK will play hardball if you talk to first line staff,
but will act more reasonable if you demonstrate that you have done your
homework in determining what you can actually afford to pay, partly as that
implies that you likely is also aware of alternatives like a debt management
plan or IVA (Individual Voluntary Arrangement), or ultimately bankruptcy,
which may leave them without full repayment.

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jacquesm
In nl we had the 'NMB' (since merged with the postbank to become ING), which
was the abbreviation of 'Nederlandse Middenstands Bank' (Dutch Bank for small
and medium Businesses).

With the general public they were known as the 'Nederlandse Meeneem Bank'
(Dutch takeaway bank) because one of their strategies was to suddenly ask for
the whole principal back in one go (something very few businesses can afford,
and as your bank they'll know exactly when you can and when you can't) and if
you didn't pay up immediately they'd buy up your assets in the bankruptcy
proceedings that would immediately follow.

After selling off enough of the assets to satisfy the principal they'd sell
off the remainder to friendly parties in order to make an easy profit.

Very nasty practice.

Don't ever put yourself in a position where you are dependent on a single
bank, if you need an 'x' amount try to split 'x' across multiple loan
providers if you can (it's not always possible, for instance with mortgages).

For a business to have only a single banking relationship is an un-necessary
risk.

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retube
I don't understand how it is legal / allowable for a bank just to call in a
loan (unless the call option is explicitly documented and paid for by the
originator / issuer).

If a loan is being serviced then it shouldn't be possible for a bank just to
randomly demand repayment, jack up the interest rate, or otherwise change the
terms of the loan. That seems grossly unfair.

If this is the standard in the UK, then I think we need legislation.

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anexprogrammer
It's not uncommon for businesses to have overdrafts in place of or additional
to loans for cashflow.

The bank calls in the overdraft because of the bank's bottom line, rather than
for anything related to the business itself or change in profitability. Was
quite common in both the 08 and 91 recessions.

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amorphid
Depending on a line of credit to fund your business' operations definitely
makes you the bank's biyotch. I remember Zappos being encourages/forced to
sell for the same reason [1]. Their outcome had a happier ending, but they
still had to sell.

[1] [http://www.inc.com/magazine/20100601/why-i-sold-
zappos.html](http://www.inc.com/magazine/20100601/why-i-sold-zappos.html)

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Veen
I've recently been binging Sopranos. Last night I watched the season two
episode in which an old friend of Tony's who owned a sporting goods store
borrowed money from Tony.

When the shop owner couldn't pay back the principle, Tony applied massive
interest rates and "fines", and when the guy couldn't pay those, took over his
business, using it to order stock that the business couldn't pay for —
eventually forcing it into bankruptcy.

As Tony is fond of saying, there's really not much difference between the mob
loan sharks and "legitimate" banks, except that the banks have the law on
their side so there's less need for knee-cappings and the like.

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akie
Can we please put people in jail for stuff like this? Please? Just once?

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Shivetya
government owned bank, if it works the same over there as in the US (fannie
mae/mac here come to mind) I doubt there is much that can be done but use
taxpayer money to make people whole again.

the options versus private entities are much more varied compared to what can
be done to a government institution. Sovereign immunity is a means that even
horribly negative effects of policy or work can be shielded from restitution.
Does that exist in European countries too?

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pidg
It's a slightly different situation to Fannie May, in that RBS was a
privately-owned business, and only became government-owned because it ran into
so many problems. It's not a 'government institution' as the Bank of England
is - the government just took control to stop it collapsing.

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lifty
No wonder why people are voting with the Trumps and Farages of the world.
Natural self correcting behaviour in an entrenched and corrupt system. When so
many institutions and people are behaving in this manner there must be some
kind of correction.

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scandox
Private Eye magazine was covering cases like these when they were actually
happening...3 or more years ago.

The targeting they described was frightening. Ome case of a successful
business forcibly sold to associates of advisors connected to the bank.

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retube
Absolutely unconscionable, literally extortion. The individuals involved need
to be held to account.

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anexprogrammer
It's not like this is an novel development. Banks were doing this in the early
90s recession. Little or nothing was done, and Gordon further relaxed banking
regulation after the '97 election.

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objectiveariel
What a scoop! Banks engage in unethical business practices? But I thought they
were charitable institutions, for heaven's sake.

It's not like their greed has ever caused a global financial crisis.

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candiodari
Banks' greed ... not so much. Government pushing banks to do this ... yes. As
documented in this case. Think about it: for a bank to risk stuff like this
without assurances that the government will be behind it when there is
pushback ...

Besides, if you know economics even a little bit you know that there are 2
sets of accounting rules : one for banks, one for everyone else. No bank can
satisfy the normal rules for solvency, so they simply don't apply to them.
Banks can't exist without government backing, even in individual cases of
small banks.

Yes this is the banks' doing. But ... the government is not the solution,
sadly.

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logronoide
Extorsion is a great business model.

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raverbashing
Off topic: Interesting to see how Buzzfeed is moving into the News segment
(and will be probably dislodge some entrenched participants)

I've noticed the trend before, but I suspect this is the first time they broke
some major news

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piva00
They have been doing this for a while now, I already got used to see their
long-form pieces and I can say that every time there is a comment identical to
yours.

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chillydawg
Bank gives loan, debtor can't pay, bank seizes assets?

OK so the internal incentives and transfer for assets to their property
investment wing were set up to make this process probably too aggressive, but
fundamentally it's sound, surely?

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snovv_crash
You missed the 'bank calls in entire loan when they think the business is
least capable of coming up with money at short notice, eg after major
equipment expenditure.'

