NATIONAL WESTMINSTER BANK PUBLIC LIMITED COMPANY

Activities and protection

What they can do, and how you are protected

• Hold or safeguard your money · Handle payments & transfers FSCS may apply
  Eligible deposits are typically protected by the FSCS up to £120,000 per person, per banking group.
• Give regulated advice FSCS may apply
  A claim for unsuitable advice is itself FSCS-protected, up to the limit that applies to the product you were advised on.
• Manage or trade investments FSCS may apply
  Eligible investment and pension claims are typically FSCS-protected up to £85,000 per person, depending on the product and your circumstances.
• Sell or arrange insurance FSCS may apply
  Eligible insurance claims may be FSCS-protected, often 90%, or 100% for compulsory or long-term cover.
• Advise on or arrange mortgages FSCS may apply
  Mortgage advice and arranging may be FSCS-covered, up to the limit that applies.
• Lend or arrange credit · Hire out goods to consumers No FSCS cover
  Consumer credit is not covered by the FSCS, so there is no compensation scheme if the firm fails.

Check your FSCS cover →

Complaints: You can refer a complaint about this firm to the Financial Ombudsman Service for free, whichever activity it relates to.

Track record

Action taken against them, and what customers complained about

5 fines between 2010 and 2016, £96.87m in total. This is part of the official register record and is worth reviewing before going ahead.

• Fined £14m on 5 February 2016

  On 19 November 2014, the PRA issued a Final Notice to the Royal Bank of Scotland Plc, National Westminster Bank Plc and Ulster Bank Ltd (together the “Banks”), which imposed on the Banks, pursuant to section 206 of the Financial Services and Markets Act 2000, a financial penalty of £14,000,000 for breach of Principle 3 of the FSA’s (and after 1 April 2013, the PRA’s) Principles for Businesses (now the PRA’s Fundamental Rule 6). The financial penalty was imposed on the basis that, during the period between 1 August 2010 and 10 July 2012, the Banks’ failed to meet their obligation to have adequate systems and controls to identify and manage their exposure to IT risks, in particular:  i)  the RBS Group’s Technology Services function (the centralised Group IT function which provides services to the Banks) did not manage and plan changes to the RBS Group’s IT systems adequately; ii)  the Technology Services Risk, Business Services Risk and Group Internal Audit (together the “The Three Lines of Defence specific to IT for the Banks through the RBS Group), did not take sufficient care to control IT risks responsibly and effectively; and  iii)  the RBS Group had a limited understanding of IT operational risk. A copy of the Final Notice for NatWest can be found on the Bank of England website and can be accessed.

  Read the FCA notice →

• Fined £60m on 20 November 2014

  The Financial Conduct Authority (FCA) imposed a fine on the Royal Bank of Scotland Plc, (RBS) National Westminster Bank Plc (NatWest) and Ulster Bank Ltd (Ulster Bank) (together the Banks) £42 million for IT failures which occurred in June 2012 and meant that the Banks' customers could not access banking services. The Banks breached Principle 3 of the FCA Principles for Business in that they failed to take reasonable care to organise and control their affairs responsibly and effectively, with adequate risk management systems. The Banks agreed to settle at an early stage of the Authority's investigation and therefore qualified for a 30% (Stage 1) discount under the FCA's executive settlement procedures. Were it not for this discount the FCA would have imposed a financial penalty of £60,000,000 on the Banks. The actual cause of the IT incident was a software compatibility problem with the underlying cause being the Banks' failure to put in place adequate systems and controls to identify and manage their exposure to IT risks. The IT failure affected over 6.5 million customers in the United Kingdom for several weeks. Over the course of that period customers could not use online banking facilities to access their accounts or obtain accurate account balances from ATMs; customers were unable to make timely mortgage payments; customers were left without cash in foreign countries; the Banks applied incorrect credit and debit interest to customers' accounts and produced inaccurate bank statements; and some organisations were unable to meet their payroll commitments or finalise their audited accounts.

• Fined £14.47m on 27 August 2014

  On 27 August 2014, the FCA imposed a penalty of £14,474,600 on the Firms for breaches of Principles 2 and 9 of the FCA's Principles for Businesses and MCOB rule 4.7. The breaches occurred between 1 June 2011 and 31 March 2013 (the Relevant Period). The Firms agreed to settle in Stage 1 and qualified for a 30% discount under the executive settlement procedures. Were it not for this discount, the penalty would have been £20,678,000. In the Relevant Period, the Firms failed to take reasonable care to ensure the suitability of mortgage advice to customers and thereafter failed to adequately remedy the failings when they were identified by the FSA in November 2011. When providing mortgage advice, firms must ensure that any recommendations they make are suitable for customers. The specific nature of the Firms' breaches was as follows: (1) the advised mortgage sales process was not fit for purpose In particular: (i) the Firms' process for assessing affordability was inadequate; (ii) they were not providing compliant advice to customers seeking to consolidate debt; and (iii) they were not advising on the appropriateness of a customer's preference regarding term. This led to an unacceptable risk that the Firms' customers would not receive suitable mortgage advice; (2) the monitoring of advised sales was inadequate and ineffective, as a result the Firms were not aware of the full extent of the issues; (3) no individual or team was properly accountable and responsible for the sales process and no-one ensured it was updated and compliant with regulatory requirements; and (4) their response to the issues raised by the FSA was seriously inadequate. They did not adequately assess the risks related to the issues and as a result customers were placed at prolonged and continued risk of receiving unsuitable advice. The Firms have agreed to conduct a customer contact exercise with the intention of identifying and addressing any detriment that may have resulted from the failings within the advised mortgage sales business during the Relevant Period. They will write to all customers who received advice during the Relevant Period and invite them to raise any concerns that they have about the advice received.

• Fined £2.8m on 11 January 2011

  On 11 January 2011 the FSA imposed a financial penalty of £2,800,000 on Royal Bank of Scotland Plc and National Westminster Bank Plc (together, the Firms) for breaches of Principle 3 (management and control) and Principle 6 (customers' interests) of the FSA's Principles for Businesses and Rules in the Dispute Resolution: Complaints Sourcebook (DISP) which occurred between 1 December 2008 and 25 March 2010 (the Relevant Period). The Firms agreed to settle at an early stage of the FSA's investigation. They therefore qualified for a 30% (stage 1) reduction in penalty, pursuant to the FSA's executive settlement procedures. Were it not for this discount, the FSA would have imposed a financial penalty of £4,000,000 on the Firms. During the Relevant Period, the Firms' complaint handling arrangements for their UK Retail bank branch network (RBS UK Retail) and for dealing with escalated complaints arising from the branch network breached the FSA's Principles and Rules. In particular, the FSA has identified the following failings: 1) the monitoring undertaken at branch level and the resulting management information produced was ineffective in assessing whether customers were being treated fairly. It focused on whether complaint handlers adhered to process and did not assess the quality of customer outcomes. For example, the controls focused on measuring whether complaint handlers dealt with complaints within target timeframes and did not assess the quality of the investigation performed, the correspondence produced or the overall outcome for the complainant; 2) RBS UK Retail failed to ensure that complaint handlers properly reviewed complaints taking account of all relevant factors. For example, the FSA's review of complaint handling arrangements within RBS UK Retail (the Thematic Review) found: a) the quality of the investigation undertaken was inadequate with complaint handlers failing to obtain all relevant and reasonably available information when investigating a complaint; b) the guidance provided to staff on how to investigate properly a complaint was limited. It provided a high level overview of complaint handling with an emphasis on resolving complaints within target timeframes; c) there was no formal requirement to consider and feed back the results from FOS decisions to complaint handlers and/or teams outside of the dedicated FOS team. As a result, complaint handlers, with the exception of the specialist FOS Team, were not always aware of and did not always take account of FOS decisions when deciding complaints; and d) the complaint handling process applied led to delays in sending out responses to customers, multiple attempts to resolve the complaints with customers and led to delays in customers receiving details of their FOS referral rights. 3) RBS UK Retail failed to ensure that correspondence sent to complainants addressed fully all concerns raised by the customer and set out the outcome of the investigation in a way that was fair, clear and not misleading. RBS UK Retail's breaches are viewed as serious because: 1) RBS UK Retail is the second largest provider of retail banking products and services in the United Kingdom with approximately 2,200 bank branches and 15 million customers during the Relevant Period. The majority of consumers make complaints through the branch network, which, as the first point of contact, in most cases retained responsibility for resolving any complaint received. Therefore, given the nature of the failings there is an unacceptably high risk that customers may not have been treated fairly; and 2) the ability of RBS UK Retail to effectively monitor and assess its complaint handling arrangements was impacted for around two and a half years. RBS UK Retail was aware from Quarter 2 2007 that complaint handlers were failing to attach on the complaint handling management system the mandatory acknowledgment and resolution letters. This was not fulresolved until November 2009. RBS UK Retail's failures therefore merit the imposition of a significant financial penalty. In deciding the level of disciplinary sanction, the FSA recognises that RBS UK Retail has co-operated fully with the FSA throughout its investigation, accepting the findings of the Thematic Review at an early stage. The FSA also acknowledges that these issues were assessed during the Firms' Cross Divisional Review in Quarter 4 2009. RBS UK Retail has agreed to make significant changes to its complaint handling arrangements as a result of the findings from this review and the FSA's Thematic Review, and has already started to implement such changes. This has included: 1) proactively seeking to address and agree the issues identified by the FSA's thematic review at an early stage; 2) working with a skilled person to undertake an extensive review of all parts of its complaint handling arrangements; 3) increasing the types of complaints which are required to be handled by specialist complaint handlers so more complaints are now owned by specialist areas; and 4) undertaking a re-assessment of a number of complaint files. The FSA expects that these changes will lead to improved outcomes for customers.

• Fined £5.6m on 9 August 2010

  On 2 August 2010 the FSA imposed a financial penalty of £5,600,000 on four members of the Royal Bank of Scotland Group (RBSG) for breaches of the Money Laundering Regulations 2007 (the Regulations) which occurred between 15 December 2007 and 31 December 2008. The breaches related to the systems and controls put in place by RBSG to prevent breaches of UK financial sanctions. RBSG agreed to settle at an early stage of the FSA's investigation. It therefore qualified for a 30% (Stage 1) discount under the FSA's executive settlement procedures. Were it not for this discount, the FSA would have imposed a financial penalty of £8,000,000 on RBSG. RBSG failed to consider properly what policies and procedures were required to comply with their obligations under the Regulations and the UK financial sanctions regime. Consequently, RBSG failed, for an extended period of time, to put in place adequate systems and controls to screen both its customers and the payments they received against the list of sanctioned entities maintained by HM Treasury (the Treasury list). In particular, RBSG failed to establish and maintain appropriate and risk-sensitive policies and procedures relating to the following matters: (1) RBSG failed properly to implement and oversee the systems used to screen relevant customers and payments against the Treasury list. As a result, notwithstanding that RBSG were one of the largest processors of foreign payments among UK banks, they did not screen the following cross-border payments: (a) any incoming payments to customers; (b) Sterling payments made by customers (except those going to US based institutions); and (c) Euro payments made by customers (until 9 June 2008). Whilst these issues were identified by RBS Group Security & Fraud (GS&F) within RBS Group's Manufacturing Division, and GS&F had put in place a plan to address them, such actions were not taken in a sufficiently timely manner. (2) RBSG's automated screening failed to screen the majority of trade finance SWIFT messages generated in the international trade transactions that it carried out. (3) RBSG did not consistently record sufficient information relating to the directors and beneficial owners of its corporate customers. Where information relating to directors and beneficial owners was recorded, RBSG failed to ensure that such individuals were screened against the Treasury list on an ongoing basis. (4) After the screening systems used to check customers and payments against the Treasury list had initially been set up, RBSG failed to ensure that the design and implementation of the 'fuzzy matching' capabilities in the screening software - used to identify close matches to the Treasury list - continued to operate satisfactorily. After the initial set up, the results produced by the screening filters were not routinely reviewed or monitored by RBSG to ensure that they were appropriate. This meant that over time the 'fuzzy matching' parameters initially set by RBSG became significantly less effective at identifying potential matches. The lack of adequate policies and procedures in respect of these matters gave rise to an unacceptable risk that RBSG could have breached the UK financial sanctions regime. The FSA considers these failings to be particularly serious because: (1) The involvement of UK financial institutions in providing funds, economic resources or financial services to designated persons on the Treasury list undermines the integrity of the UK financial services sector. Unless they have in place robust systems and controls, UK financial institutions risk being used to facilitate transactions involving sanctions targets, including terrorist financing. As the Joint Money Laundering Steering Group (JMLSG) guidance advises, small amounts of funding could be sufficient to finance terrorist activities and hence the sanctions-related systems and controls implemented by firms need to be robust enough to capture sucpyments. The FSA's financial crime and market confidence statutory objectives are both endangered by firms' failures in this area. Adequate systems and controls relating to financial sanctions is an integral part of complying with the FSA's requirements on financial crime. (2) The systems and control failings at RBSG presented a serious risk to the FSA's financial crime and market confidence statutory objectives. During 2007, the London division responsible for processing payments for RBSG dealt with the largest volume of foreign payments of any financial institution in the UK. For example, it processed £7.6 trillion of inward Euro payments and £8.6 trillion of outward Euro payments, across a total volume of 1.8 million payment transactions. (3) RBSG, through GS&F, were aware of deficiencies in the screening systems used during the Relevant Period but did not act on these deficiencies in a timely manner. This contributed to the above failings in systems and controls remaining in existence for one year and not being remedied earlier. For example, GS&F raised issues relating to their sanctions screening software with the software provider but failed to ensure that these issues were resolved promptly. Further, after GS&F instructed a leading firm of accountants in early 2008 to carry out an independent review to benchmark RBSG's screening software against a peer group, the key issues identified in the review were not appropriately escalated and as a result were not considered by the relevant committees within RBSG who would have overseen remedial action. The required remedial action was not taken until a number of months later. RBSG's failings therefore merit the imposition of a significant financial penalty. In deciding the level of disciplinary sanction, the FSA recognises that RBSG have taken action to mitigate the seriousness of their failings, including: (1) once the failings came to the attention of the current management within RBSG, they promptly reported them to the FSA; and (2) RBSG took expedient and appropriate remedial action in respect of screening payments, improving the effectiveness of the software and improving governance and oversight of UK sanctions compliance. This included implementing screening of all inbound payments, outbound domestic Sterling payments, various Trade Finance messages and payments entered directly into the gateway application for SWIFT messages. Since the discovery of its failings in December 2008, RBSG and its current senior management have fully cooperated with the FSA's investigation.

Common questions

Frequently asked questions