Ulster Bank faces action in overcharging controversy
ULSTER Bank is facing a raft of legal actions from companies which accuse the lender of overcharging them so much that it forced them out of business. The Sunday Independent understands the cases could cost the bank millions of euro if it loses them.
The Government has been so concerned at the allegations against the British-owned bank that officials from the Department of Finance met its representatives to discuss them.
The latest allegations have prompted Fianna Fail finance spokesman Michael McGrath to ask Finance Minister Michael Noonan to look at bringing in an independent reviewer of how Ulster Bank has operated in the State.
The controversy erupted three weeks ago in the Sunday Independent when a whistleblower alleged that the bank closed down viable Irish businesses to improve its own bottom line.
That followed similar claims in Britain, which were highlighted in a report by Lawrence Tomlinson, a special adviser to UK Business Secretary Vince Cable.
More than 20 people from Ireland will meet him in Belfast on January 23, all of them insisting that their viable businesses were "wrecked" by Ulster Bank. Their claims have now been supported by the financial watchdog company bankcheck.ie which specialises in clawing back fees from banks who overcharge clients.
The group's finance expert Eddie Fitzpatrick alleges Ulster Bank practices were "particularly crucial" in closing some business.
"Some companies are going to close. That's the reality of life," he said. "But what we have been able to prove in quite a number of cases is that it was the actions of the Ulster Bank which closed otherwise viable businesses.
"They did this through a combination of measures: by overcharging customers, levying fees, increasing rates and decreasing limits," he said.
One Dublin businessman who hired Fitzpatrick to trawl through his accounts claims Ulster Bank overcharged him €70,000. Other cases due before the courts involve sums much larger than that.
"The fees and charges were morally and legally wrong," the Dublin businessman said.
He is still involved in a legal wrangle with Ulster Bank, but insisted: "It was only when I read the Sunday Independent that it suddenly dawned on me that it wasn't just me.
Although he is based in Belfast, Fitzpatrick said that "95 per cent of the Ulster Bank cases I investigate are from the Republic of Ireland".
He added: "There's a sense of unfairness. When I tell clients who have lost their businesses that it was the overcharging of the bank which led to the loss of their company, it is quite a shock."
Mr McGrath raised the Sunday Independent revelations with Mr Noonan last week. He said he believed there were grounds for the appointment of an independent professional to review alleged mistreatment of small business customers by Ulster Bank.
In a Dail response, Mr Noonan revealed that his officials had met with Ulster Bank representatives on November 27 in response to the Tomlinson report.
"The report contained allegations about West Register (the bank's property company) and my officials were assured that West Register was involved with a very small number of Irish businesses. There is no reference to Ireland in the report," he said .
"I understand that RBS has appointed Clifford Chance to independently review the treatment of distressed customers by the (Ulster Bank's) Global Restructuring Group and report early in the New Year. I also understand that the findings will be applied across the RBS Group."
An Irish whistleblower inside Ulster Bank told the Sunday Independent this weekend: "I've read Mr Noonan's response. It is good to see him respond to the Tomlinson report but this is not just about what assets West Register has in Ireland. That's being disingenuous. Not all assets seized by Ulster ended up with West Register."
Ulster Bank declined to comment, although the Sunday Independent has learned some bank officials gave off-the-record briefings last week referring to cases raised in this newspaper as "basket cases".
Mr Noonan said he would keep the issue "under review".