RBS Reimburses Customers After FX Scandal

RBS, Banking, Foreign Exchange, Scandal, News

The Royal Bank of Scotland (RBS) is reimbursing 40 million pounds ($53 million) to about 730,000 customers after workers at the bank were found to be manipulating foreign money transfers to get more money for the financial institution, according to a report by The Guardian.

The bank has been slowly trying to rebuild its reputation after a number of issues it has dealt with regarding customers since the financial crisis. Workers in the bank’s foreign exchange team allegedly brought tens of millions of pounds to the bank by rigging exchange rates between 2010 and 2014.

The workers would add 60 pence on top of every 1,000 pounds ($1,335) sent through bank transfers overseas. The cash was then tied to bonuses based on the inflated earnings, and all of the bank members who received the bonuses are no longer with the company. Discovery of the scheme happened while the bank was investigating a different foreign exchange rigging scandal.

The scandal is the first one to happen during the tenure of new RBS boss Alison Rose, who took over for Ross McEwan in November. The bank recently reached a $4.9 billion agreement with authorities in the U.S. over similar customer-related issues.

“We are proactively refunding the difference, with interest, for incorrect foreign exchange rates that were applied to some international payments for certain customers between 2010 and 2014,” said a spokesperson for the bank. “We identified and addressed the source of the incorrect exchange rates in 2014, and put in place additional checks and controls to prevent this happening again. We apologize to those customers impacted.”

In other news, earlier this year, RBS awarded four FinTech firms with money to boost financial services and increase competition in the U.K. small business banking space.

Atom Bank, Currencycloud, Modulr and Iwoca secured a portion of the 775 million pounds ($1 billion) allocated from RBS as a government mandate to support competition in the market. Together, the companies have been awarded 40 million pounds ($53 million).