RBS Invoice Finance Ltd

[Missy Allen]

My husband took out an Agreement with RBS Invoice Finance Ltd in July 2007. A representative (salesman) came out to us a couple of times and the last time he came out he came armed with the Agreement for us to sign. He told us that he was going to take the Agreement back to the office with him when we had signed it because he didn't trust the postal system.

 

During the meeting at our home he told us the few positives about the agreement and asked us if we had any questions before we signed. I asked him if there was anything in the agreement that we really needed to know and he said "no not really". There actually was quite alot the main point being that we were paying a monthly service charge for bad debt protection but the bad debt protection was at the descretion of RBS Invoice Finance so in effect we were actually paying for something we weren't receiving.

 

We stopped trading on 8 April 2008 and we have since found out that a company we were trading with went bust but it was also a customer of RBS Invoice Finance. RBS refused to offer bad debt protection but RBS held a debenture over the assets of the said company so if RBS allowed that company to run up a debt with us, not offer us bad debt protection and the company went bust (which it did) RBS was in a win win situation because it was going to get its money back from the Debenture.

 

RBS say we now owe them the money that particular company went bust for I am arguing the toss that there is a conflict of interest and the rep should have pointed out everything we needed to know and should have allowed us time to look at the agreement without him saying he should take it away with him.

 

Does anyone know where we stand with this?

 

Missy Allen

[citizenB]

It might be worth having a word with the Financial Ombudsman to see if you are able to make a formal complaint. Have you exhausted RBS' complaints procedures ?.

[Missy Allen]

I haven't actually gone down the route of the complaints procedure there has just been correspondence between myself and the Director of Client Relations.

 

On the telephone the Director of Client Relations said that they were not regulated by the FSA but when I checked the FSA register they are on there.

 

I will ask him for the complaints procedure and see where we go from there.

 

Thanks

[citizenB]

That would be the best way I think. Once you have their Final Response letter you can make your complaint to the FOS.

[rbssls]

Sorry to hear of the difficulties you have experienced with RBSIF. Unfortunatley the mistake you made was not to have read the agreement in detail. You might expect RBSIF to act with integrity as they are part of a large bank, sadly this too is a mistake.

The sales functions of RBSIF should be treated with the same caution that you would use when buying double glazing as their sole interest is in securing a sale regardless of whether this is the right for the customer, they have a target for bad debt protection so will always try to add this to a facility as they did in your case.

The client relations function is not targeted in the same way as the sales arm and they will enforce every term and condition to the letter if to their advantage even if that means you go bust.

Sadly I doubt you will have any joy in dealing directly with the client director and the FSA will not regualte the BDP products as RBSIF rather cutely market this as bad debt cover rather than an insurance. Perhaps moving onto your next verture would be the best use of time and of course do let you business associates have the benefit of your experiences with RBSIF.

[yourbank]

Sorry to hear of the difficulties you have experienced with RBSIF. Unfortunatley the mistake you made was not to have read the agreement in detail. You might expect RBSIF to act with integrity as they are part of a large bank, sadly this too is a mistake.

The sales functions of RBSIF should be treated with the same caution that you would use when buying double glazing as their sole interest is in securing a sale regardless of whether this is the right for the customer, they have a target for bad debt protection so will always try to add this to a facility as they did in your case.

The client relations function is not targeted in the same way as the sales arm and they will enforce every term and condition to the letter if to their advantage even if that means you go bust.

Sadly I doubt you will have any joy in dealing directly with the client director and the FSA will not regualte the BDP products as RBSIF rather cutely market this as bad debt cover rather than an insurance. Perhaps moving onto your next verture would be the best use of time and of course do let you business associates have the benefit of your experiences with RBSIF.

 

Who would they be regulated by if it is bad debt cover?

[volvodriver]

bad debt cover rather than an insurance.

 

What is cover if its not insurance.

 

If it looks like a duick, and quacks like a duck.....

 

Perhaps as a new poster to the site you might like to establish your credentials to make definitive statements of this nature.

[rbssls]

BDP is an unregulated product, it forms a part of the funding agreement between IF and the client. Their sales people require no training or accreditation to sell the BDP. So far as the client is concerned it is an insurance but you wont find it described as such in any IF literature and staff are drilled not to dscribe it as such..... its the wild west out there.

[Missy Allen]

I do understand what has been said but the actual company RBS Invoice Finance Ltd is regulated by the FSA so surely it shouldn't matter what product they sell to you as long as the agreement is with RBS Invoice Finance Ltd (which ours is/was) then they should be covered by the FSA? I did have a telephone conversation with the Client Director who offered me a 50% reduction on the outstanding debt. I actually declined this on the basis that their salesman had a responsibility to ensure we knew all the facts and that question was specifically asked to him, also the salesman put us under a degree of duress by insisting that he was taking the contract back to the office with him signed that day and also that there was a conflict of interest in RBS Invoice Finance Ltd holding a Debenture over one of our clients and RBS not contacting us and informing us that there was a problem with this company but allowing us to trade with him and then RBS refusing bad debt protection. I put this in writing to them on 12 September and I haven't heard anything further from them yet but will keep you posted.

 

If anyone is reading this please please please never take out a Factoring Agreement it is not the answer.

[Factoring Solutions]

I've come to this thread rather late having found this thread after Googling for someting else

 

It's a sorry state of affairs and not one that I find to be unusual as at least one of the High Street owned factoring companies are reknowned for having a sales force that promise prospective clients all sorts of things that the operations department later refuse.

 

It's all well and good stating that the company should have read the agreement in detail but with the best will in the world which small company will read a multi page document all written in legal gobbledygook.

 

You cannot compare a salesman from a subsidiary of RBS with a double glazing salesman unless of course you are happy to compare Royal Bank of Scotland with a double glazing form.

 

People are entitled to expect higher standards from such a well known bank and at the very least the agreement and operation of the factoring facility should be explained fully to all new clients.

 

The bank may come under the banking regulatory body but unfortunatly the factoring subsidiary does not and whilst many think that there should be seperate regulation for factoring companies, sadly there isn't

[Missy Allen]

Well Factoring Solutions, I have good news.

 

I stuck to my guns and when the Customer Services Director telephoned me I kept insisting that as they were regulated by the FSA they had a responsibility to ensure we understood the agreement and that as one of our customers was also one of their customers there was a clear conflict of interest. Eventually they conceded and the outstanding debt of £3,000 was written off by RBS.

 

Sometimes it is just like a battle of wills but I was not backing down as I felt I was in the right.

 

I hope my experience will help other people.

 

Missy Allen

[Factoring Solutions]

I am pleased that they backed down as all too often these bank subsidiaries steamroller the small company knowing that they have unlimited funds (now ours) whilst their client can probably not afford to take the matter to court.

 

I have been in factoring for donkey's years and many years ago even designed a new factoring agreement which naturally protected the factoring company from almost every eventuality whilst affording little protection for the client.

 

These agreements aren't the sort of document that anyone would read in great depth and understand the full ramifications and if they did they probably wouldn't want to sign it. Factoring agreements are signed unread just as are mortgages and hire purchase agreements as one signs them in the hope that the well known name that you are entering into an agreement with will act honourably at all times.

 

Still, all's well that ends well.

 

Ian

[lexingtonjust]

From all that I see here, is RBS Invoice Finance Ltd any good at all?

[Johnny580]

No they are not any good but I think all Factoring Companies are the same!

[ianster10]

Unfortunately this is an all too common problem. A factoring company whether bank owned or an independent is essentially sales driven. They will take every precaution to ensure their risks are mitigated and their income is maximised.

 

RBS Invoice Finance did indeed sell Bad Debt Protection and in their small business team it was to 99% of new clients back in 2007. I am led to believe the director who pushed this has now gone. The BDP is a totally unregulated product and is not governed by anyone.

 

The business finance sector as a rule is unregulated.

 

In sourcing a factoring facility it is important to find a company that is both honest and transparent. It would appear that RBS Invoice Finance were not. This is not the first time I have heard this.

 

However, I would not say that this is a reason to avoid factoring altogether. I think the real lesson is to take proper impartial advice and read the agreements you are signing.

[macie]

Don't do factoring if you can possibly avoid it. Factors suck everything they can out of your business with interest, assignment charges, reassignment charges etc. You'll find that after all the charges are taken out you will be paying 30% interest plus on the pitiful amounts they advance. No matter who the factor they are invariably the same.

 

Stay well clear if you can.

 

Make no mistake, they sell you hope and deliver excrement !