Grimsby landlady facing ruin after told to pay back £635,000 by bank unit being investigated over loans scandal
Grimsby MP Melanie Onn told ministers landlady Andrea Willows had been put in an 'impossible' situation by the Global Restructuring Group which is now being investigated
Patrick DalyBristol Post parliamentary correspondent
Shadow housing minister and Great Grimsby MP Melanie Onn (Image: Richard Addison)
A landlady from Grimsby is facing bankruptcy after a bank at the centre of a loans scandal told her to pay back a staggering £635,000.
Andrea Willows, who owned nine properties, some housing vulnerable families, was ordered to pay back the huge sum by the Royal Bank of Scotland's Global Restructuring Group (GRG).
It is now under investigation by MPs after allegations it pushed small companies into bankruptcy in order to cheaply buy-up their assets.
Mrs Willows and her husband, a retired firefighter, have now called on Grimsby MP Melanie Onn for assistance after spending £45,000 in legal fees fighting the move.
Mrs Willows is currently awaiting a bankruptcy hearing after the GRG asked for their loans to be paid back in full, even though she had never missed a payment.
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Ms Onn said her constituent, who she described as a "good landlord", had done "nothing wrong" but had now "lost everything".
Great Grimsby MP Melanie Onn raised Andrea Willows' case in Parliament (Image: Getty / Grimsby Telegraph)
The GRG unit – an offshoot of the publicly-owned Royal Bank of Scotland (RBS), which also runs NatWest – operated between 2005 and its closure in 2013.
It was marketed by RBS – which was bailed-out by taxpayers in 2008 – as a turnaround specialist which could help businesses which experienced financial difficulties.
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But Financial Conduct Authority investigators found "inappropriate action" was experienced by 92 per cent of the "viable firms" that GRG dealt with.
Ms Onn, Labour's housing spokeswoman, raised Mrs Willows' plight in Parliament, telling ministers of the "impossible" situation her constituent had been put in.
"She had to come up with the full cost of multiple loans to pay off about £635,000, which made things completely impossible for her," she said in the House of Commons.
Landlady Andrea Willows 'lost everything' when RBS GRG recalled £635,000 in buy-to-let loans (Image: BrianAJackson)
"That is exactly what these banks have done – they have made it impossible for hard-working people to continue to run their businesses although they were not in trouble in the first place."
Speaking after the debate, Ms Onn said: "This is a David and Goliath situation – and there are a lot of Davids all around the country.
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"Mrs Willows always made her loan repayments on time and she never took a repayment break. She was a good landlord and she told me she had some very vulnerable people in her properties – some of them even referred from the local authority's homeless service. She in fact adapted one of her homes for a disabled tenant.
"She and her husband have spent a fortune in legal fees to get to the bottom of this – it has been so stressful for them.
"This is not her fault. All she did was move her product to a bank – she did nothing wrong but has lost everything."
RBS said Mrs Willows had been in 'financial difficulty'
RBS said Mrs Willows' business was in "financial difficulty" and so GRG made the decision to appoint receivers and took the properties off the Grimsby resident.
Mrs Willows has accused the receiver of mismanaging the houses. She is said to have told Ms Onn that the receivers stopped taking rents and failed to carry out maintenance on her properties, meaning her company had no income and caused the tenants to vacate.
The receivers are then alleged to have taken out a £100,000 overdraft in her name and are said to be refusing to allow her access to her company's financial details, preventing her from filling out a tax return.
Chair of the Treasury committee, Nicky Morgan MP, said her committee's inquiry, announced this week, wanted to ensure small businesses were "treated fairly when they borrow from banks".
Nicky Morgan MP, chair of the Treasury committee
The former education secretary said: "The case of GRG has undermined the trust of small firms in banks, and highlighted the imbalanced and potentially exploitative relationship between banks and small and medium-sized enterprises.
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"Little has changed since GRG to prevent similar mistreatment happening again, nor to guarantee victims access to fair and reasonable redress."
A spokeswoman for RBS said: "We recognise that it is stressful when a business is experiencing financial difficulty.
"The bank provided extensive forbearance to this customer after the loans expired but ultimately had to appoint Law of Property Act Receivers to market the properties in order for the loans to be repaid."
Melanie Onn