The alleged mis-selling of long-term loans with massive breakage fees to small and medium-sized businesses has been raised in the Scottish Parliament.
The debate was sparked by a motion lodged by North East Fife MSP Rod Campbell, who called for the banks to compensate affected businesses and for the Scottish Government to “engage with stake-holders to ensure that customers throughout Scotland are offered appropriate redress.”
Representatives of the north east-based chapter of the NAB Support Group including a number of business people from Tayside and Fife travelled to Holyrood for Thursday’s debate.
The 61-member group has been calling for the Financial Conduct Authority to review fixed rate tailored business loans provided to them by the Clydesdale and Yorkshire banks, subsidiaries of National Australia Bank.
They believe the loans, which they claim come with punitive breakage costs, should be included in a directive issued by the Financial Services Authority the FCA’s predecessor last year which forced banks to review the issue of interest rate swap agreement to SMEs.
A spokesman for the north east chapter said more than £100 million of disputed loans were tied up in the local group alone.
He claimed that breakage fees associated with those loans were in excess of £14m, a figure he said prevented the individual businesses from being able to cancel their banking arrangements and access new lending at a better rate.
“Our business members are struggling and some have gone bankrupt as a result of this,” the spokesman said.
“What we are looking for is the FCA to include tailored business loans in their review.
“They are the same as the other products that have been included in the review. There is no difference.”
Providing compensation for mis-sold interest rate swap agreements has already cost the UK banks hundreds of millions of pounds and it is expected that bill would significantly if TBL loans were also subject to review.