finance

Hundreds of new claimants join loans legal action against Clydesdale Bank



More than 800 small businesses have now joined forces in a long-running legal fight against Clydesdale Bank, after hundreds of new claimants became part of the claim.

Claims firm RGL Management, which is managing the legal action, said it added another 436 claims on behalf of 266 small firms against Clydesdale, which is now part of Virgin Money, and its former owner National Australia Bank (NAB).

The latest tranche takes the total number of claims to 1,345 – representing 823 small businesses – according to RGL.

The case, which has been running since 2017, relates to fixed-rate tailored business loans that Clydesdale and Yorkshire Bank offered to small businesses between 2001 and 2012.

RGL alleges small firms were unfairly charged high break fees when they sought to end the loans early. It also alleges that the lender “deliberately and systematically” overpriced the interest rates on the loans without first informing customers.

RGL stated that the claims are expected to amount to hundreds of millions of pounds, with about 6,500 small firms sold the loans – with potentially thousands more set join the action.

James Hayward, chief executive of RGL Management, said: “With this significant new wave of claims, the largest to date, we remain supremely confident in the strength of our case.

“There is irrefutable evidence which proves the bank’s unlawful treatment of its fixed rate loan customers and we are well on the way to securing them the compensation they deserve, which is in the hundreds of millions of pounds.”

Clydesdale and Yorkshire Bank merged to form CYBG in 2016 after NAB divested its UK operations. It was then renamed Virgin Money in 2019, following a £1.6bn takeover.

A spokesman for Virgin Money responded: “There is absolutely no merit in the allegations made in RGL’s claims, which involve four live claimants.

“Their case is weak and we remain confident of defending our position.”

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