GOVERNMENT adviser Lawrence Tomlimson has told MPs he has been contacted by more than 1000 businesses claiming mistreatment in the wake of the publication of his scathing report on Royal Bank of Scotland's treatment of small firms.
Mr Tomlinson said the vast majority of complaints relate to Edinburgh-based RBS which he claimed stood out from other institutions for the "systematic" way its restructuring arm ran down companies.
He said that RBS's global restructuring group (GRG) became a "debt collecting agency".
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"I have had so many cases, wherever I go it seems to be systematic to me. The cases with RBS/GRG are all pretty much identical," he told Parliament's Treasury committee.
The Department for Business, Innovation and Skills' one-day-a-week entrepreneur-in-residence said that after being in contact with around 100 businesses, of whom 20 merited inclusion in his initial report published in November, up to 1200 more have come forward.
"What happened was that GRG was turned basically into a debt collecting agency," he said.
Mr Tomlinson believes that 81% state-owned RBS took advantage of covenants in firms' loan deals.
He said: "If you are four days late putting in your accounts, you should not really go into GRG.
"If you have missed six months' payments and do not look like you are going to make it, then that is a material breach."
He said that often "unsophisticated" small business people could not negotiate the terms of loan deals.
"There is a huge amount of trust smaller businesses put in their bank," he said.
Earlier this month, the Financial Conduct Authority appointed consultancy Promontory Financial Group and accounting firm Mazars to conduct a review of Mr Tomlinson's claims.
Mr Tomlinson will meet FCA officials next month.
"They (the FCA) will be shocked by the lives that have been ruined," he said.
Mr Tomlinson said his proposal to split RBS and Lloyds Banking Group into six separate banks is feasible given the work to carve Williams and Glyn and TSB out of the two banks already.
"It is putting these projects on steroids," he said, adding it could take just 18 months to implement.
An RBS spokesman said: "The vast majority of businesses that have gone through GRG have had a positive outcome, either returned to the main bank, rebanked or paid their debt back with only a minority facing insolvency."
There is "no evidence" of a systematic effort to profit from customers in trouble, he said.