The vast majority of my work is photography, but just like everyone else who works in journalism, I still get tip-offs that lead to good stories. Last month I got a tip-off from a Royal Bank of Scotland employee who was concerned about the bank falsifying statement dates and then charging customers for being overdrawn on dates that they weren’t overdrawn.
First of all, allow me to backtrack a little, to explain why I’ve resurrected this old blog to post a story that really should be going in a newspaper to warn millions of customers of RBS (and other banks). Back in September 2012 I got a huge exclusive about 700,000 people being given a defective typhoid vaccine. The story stood up well but you still have to give a right to reply, and the company that made the vaccine dragged their heels for a week, passing me back and forward between different PR people, always promising that a statement was coming. I was naive and didn’t realise what was happening. After a week they put the story out themselves, and effectively controlled their own bad publicity. Rather than being a shock exclusive from some jumped up freelance reporter, it looked like a voluntary admission from a company that had actually been hiding the truth for months.
While working on this story about RBS I’ve encountered similar delaying behaviour, not from RBS themselves (who have simply denied the story) but from the Financial Conduct Authority, who have been asked to comment on which regulations, if any, RBS have been infringing. Now you may wonder why I need to get a statement from a regulator when the bank’s actions are surely illegal? Well because journalistically it’s very difficult to describe any financial activity as “illegal”. It’s much more effective to get a regulator to go on record as saying that the activity breaks a guideline or a regulation, because you can then state that as a fact.
With that said, let’s get straight to the point. I suspect that either the FCA or RBS Group are preparing to put this story out themselves, in order to manage the bad press in much the same way as Sanofi Pasteur managed the coverage of their defective typhoid vaccine. So I’ve decided to release the story myself online. Frankly it’s annoying that I feel I have to do this because I worked on the story in order to sell it to a paper, but the bottom line is that I want the story out there so I can stop fretting over it and get back to my main work in photography.
As a customer of RBS myself, evidence was easy to come by. I simply took pairs of screenshots from RBS’s banking app, last thing at night and then first thing in the morning. Here are a couple of screenshots from the bank’s app taken on 11 June 2015.
As you can see, at 00:34 the last recorded transaction was on 9 June. But by 08:08 a set of three transactions dated 10 June had appeared. The three transactions had been applied to the account on 11 June but dated 10 June, which is what I believe violates the FCA’s regulations and is potentially illegal.
In case it isn’t immediately obvious, the reason why this back-dating is a problem is that a lot of people arrange for direct debits and standing orders to come out on the day that their salary is paid in to their bank account. But if someone is paid on, say, the 28th of the month, and direct debits that come out on the 28th are dated the 27th, then the person’s account will potentially go overdrawn and RBS can charge them a penalty fee. Worse, unless they’ve gone through the process of methodically taking screenshots as I have, what evidence will they have to prove the back-dating? The only evidence available to them is a bank statement from RBS which will of course have the wrong dates on it.
For no better reason than to break all this text up with another picture, here are a couple more screenshots taken today, 17 June 2015.
At 00:01 the last recorded transaction was on 15 June. By 06:35 there were four transactions dated 16 June. All four transactions were applied to the account on 17 June but dated 16 June and affecting the end-of-day balance for that date (which is what penalty charges are based on).
My understanding from the FCA is that RBS and Natwest (part of RBS Group) are both known to back-date transactions in this way, and other banks do it too but I don’t know which ones and understandably the FCA won’t reveal that information.
As for why it happens, the explanation from the FCA goes like this: A customer buys something on their debit card on, for example, the 15th. The retailer stores up transactions and makes a bulk request from the bank on, say, the 17th. The bank waits for the next business day so the request is processed on the 18th but back-dated to the 17th. The FCA questions whether or not this is actually detrimental to bank customers.
RBS simply deny that transactions are ever back-dated. Their written response says: “We are physically unable to do this.”
As of today (17 June) three press officers at the FCA have been researching their own policy for six days. Today, having promised a policy statement by close of business, they told me at 5:32pm that they don’t fully understand what has been happening and therefore can’t give a statement until tomorrow.
So that’s the story. If I’ve correctly understood the scale of the problem then millions of customers of RBS and other banks can finally understand why they’ve been charged for going overdrawn when they were sure they hadn’t.
What will happen next, I don’t know. Either a newspaper will pick up on the story and run with it, or RBS or the FCA will put out their own version of the story with their own positive spin on it. Or maybe nothing will happen and bank customers will continue to pay penalty charges because of banks back-dating transactions, which may or may not be illegal.
One thing for sure is that I’m stepping away from the whole murky operation and going back to making pretty pictures for a living 🙂