14 April 2015
The Financial Conduct Authority (FCA) heavily fined Clydesdale Bank Plc for serious failings in its Payment Protection Insurance (PPI) complaint handling processes.
The bank has been fined a record sum of £20.6 million for failings between May 2011 and July 2013 and is the largest ever fine imposed for failings relating to PPI.
In mid-2011 Clydesdale implemented inappropriate policies which meant that its PPI complaint handlers were not taking into account all relevant documents when deciding how to deal with complaints.
Additionally, between May 2012 and June 2013, Clydesdale provided false information to the Financial Ombudsman Service in response to requests for evidence of the records it held on PPI policies sold to individual customers.
A team within Clydesdale’s PPI complaint handling operation altered certain system print outs (in a small number of cases) to make it look as if the bank held no relevant documents and deleted all PPI information from a separate print out, which listed the products sold to the customer. These practices were not known to or authorised by Clydesdale’s PPI leadership team or more senior management.
Georgina Philippou, acting director of enforcement and market oversight at the FCA said:
‘Clydesdale’s failings were unacceptable and fell well below the standard the FCA expects. The fact that Clydesdale misled the Financial Ombudsman by providing false information about the information it held is particularly serious and this is reflected in the size of the fine.
‘We have been very clear about how firms should treat customers who may have been mis-sold PPI. In ignoring documents it held which were relevant to its customers’ complaints, Clydesdale failed to treat its customers fairly.’
As a result of Clydesdale’s conduct, of the 126,600 PPI complaints decided between May 2011 and July 2013, up to 42,200 may have been rejected unfairly and up to 50,900 upheld complaints may have resulted in inadequate redress for customers.
Clydesdale agreed to settle at an early stage of the FCA’s investigation and therefore qualified for at 30% stage 1 discount. Were it not for this the FCA would have imposed a financial penalty of £29,540,500.