RBS foreign exchange rigging
Royal Bank of Scotland are set to pay out £40 million in compensation to 730,000 customers after staff rigged foreign money transfers to bolster the Bank’s profits. Staff in the Bank’s foreign exchange team is believed to have earned RBS tens of millions of pounds in extra profit by manipulating exchange rates between 2010 and 2014.
Computer systems were altered by the Bank’s employees, which meant 0.06pc was added to the rate applied to more than 10 million foreign exchange payments. This resulted in an extra 60p of costs on to every £1,000 sent abroad through bank transfers. The group of less than 10 employees, all of whom have since left the Bank, did not personally receive the funds but they were able to claim bonuses linked to inflated earnings by their department.
This is believed to be the first case of foreign exchange rigging of this kind in the UK. RBS discovered the scandal 5 years ago but is only now paying out to customers due to the scale of the problem. The Bank has now launched a compensation scheme of its own accord, although The Financial Conduct Authority have been informed and were alerted at the time of discovery.
Those affected include individuals and small businesses using RBS, NatWest and NatWest Markets. Customers are being written to and will receive a refund of the additional rate paid, plus 8% simple interest, which will be paid automatically into their accounts.
This comes shortly after five banks including Royal Bank of Scotland and Barclays were fined more than £875 million by the European Union for rigging the multi trillion-dollar foreign exchange market.
The European commission said the banks, which also include Citigroup, JP Morgan and MUFG (Mitsubishi UFJ Financial Group), formed two cartels to manipulate the spot foreign exchange market for 11 currencies, including the US dollar, the euro and the pound.
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If you believe you have been affected by the RBS foreign exchange rigging scandal, please contact the Banking and Financial Litigation Department. We are experienced in dealing with claims and complaints against the banks and financial institutions.
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