Charging orders rap for Royal Bank and NatWest

THE Office of Fair Trading has criticised the Royal Bank of Scotland and National Westminster Bank for using charging orders to try to recover customer debts.

The OFT found evidence the banks were not always taking account of customers’ efforts to repay their debts and that charging orders – which place a charge on a debtor’s property – were being used to secure relatively small amounts of debt, sometimes under £5,000.

Charging orders are a leg­itimate way to recoup unpaid debts. However, the OFT said there were problems with the way RBS and NatWest were using them.

David Fisher, OFT director of consumer credit, said: “Lenders are entitled to use charging orders, but they must do so proportionately and not to secure relatively small amounts of debt.

“Where we consider the use of charging orders to be unfair or oppressive we will take action to protect consumers.”

An RBS spokesman said the investigation concerned historic cases, dating from 2007 and 2008 and that the banks had changed the way they used charging orders since the OFT began its investigation.

“We are committed to helping customers who find themselves in financial difficulty. We changed the thresholds for using charging orders ourselves in 2008. The cases reviewed by the OFT preceded these changes. We use charging orders only as a last resort.”