More than 500 small businesses have now joined forces in a class legal action against Clydesdale and Yorkshire Bank as the case heads to court.
Claims firm RGL Management said another 365 small firms have joined the group action against CYBG, now called Virgin Money, and its former owner National Australia Bank (NAB), taking the total claimants to 509.
The legal action is now set for a case management conference on December 14 to 16.
It is thought this could set the stage for the case to go to court in the second half of 2021.
“With the first court date now on the horizon, we are more confident than ever of securing the hundreds of millions of pounds in compensation owed to Clydesdale and Yorkshire Bank customersJames Hayward, RGL Management
The case relates to fixed-rate tailored business loans that CYBG 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, while it also alleges there was “deliberate and systematic” overpricing of the interest rates on the loans without first informing customers.
It said the claims are expected to amount to hundreds of millions of pounds, with the current action representing 867 individual loans.
RGL said it believes around 6,500 small firms were sold the loans, which could see thousands more join the action.
James Hayward, chief executive of RGL Management, said: “With the first court date now on the horizon, we are more confident than ever of securing the hundreds of millions of pounds in compensation owed to Clydesdale and Yorkshire Bank customers.
“There is an overwhelming body of evidence to prove the banks’ unlawful treatment of their fixed-rate loan business customers.
“RGL is now redoubling its book building efforts to ensure as many borrowers as possible receive the compensation they deserve.”
Ian Lightbody, chairman and founding member of the Virgin Money Remediation Support Group, hailed the increase in claimants to the action as a “great achievement”.
A spokesman for Virgin Money said: “There continues to be absolutely no substance or merit in the allegations made in RGL’s claim and we have made this clear in our defence.
“Over recent years we have worked hard to investigate all historic SME conduct issues and we are confident we have done the right thing for those customers involved.
“We will continue to defend our position robustly throughout any legal process.”
A spokesman for NAB said: “NAB declines to comment while the matter is before the court.”
Clydesdale and Yorkshire bank group CYBG was formed in 2016 after the NAB divested its UK operations and was recently renamed Virgin Money after a £1.6 billion takeover of Sir Richard Branson’s banking group.