Clydesdale Bank is being sued by RGL Management on behalf of firms who took out tailored business loans
City AM, 07.07.2017
Clydesdale Bank (CYBG) is being sued by RGL Management on behalf of companies who took out tailored business loans (TBLs) between 2002 and 2012.
RGL, group that intiates and builds cases in large, complex multi-party commercial legal actions, said more than 6,000 small businesses “have legitimate grounds to join this action”.
According to RGL, more than 8,000 TBLs made to CYBG customers over the ten year period “purportedly contained embedded or hidden swaps which were not disclosed to customers who thought they were entering into a simple fixed rate loan”.
“The swap or hedging element was similar to that of a standalone interest rate hedging product, in particular, through the purported hedge Clydesdale sought to charge disproportionate and crippling break costs in the event that customers wanted to exit the loan early and also had the effect of locking them into higher interest rates and higher bank margins as interest rates fell,” RGL said.
Many firms that took out TBLs later lost their businesses to insolvency as a result of the fraudulent behaviour of the bank, RGL said. The group added that it has “already recruited a significant number” of businesses to its group and encouraged any company that took out a TBL to contact RGL.
“Clydesdale’s conduct is actionable and we’ll be suing those involved in order to recover damages for those customers it harmed,” said James Hayward, chief executive of RGL. Proceedings will probably be issued later this year, however the exact timing is difficult to predict and will depend primarily on what gives us the greatest tactical advantage. Anyone wishing to join the action should get on board quickly or risk being left out.”
RGL’s case is being funded by Augusta Ventures.
A CYBG spokesperson said: “CYBG has no record of a TBL claim being submitted by either RGL Management or Augusta Ventures. If and when any claim is made, we will deal with it in the appropriate way.”
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