Co-op fined for PPI complaints-handling
The Co-operative Bank has been fined £113,000 for failing to handle payment protection insurance (PPI) complaints fairly.
The bank had put a ‘significant proportion’ of its 1,629 complaints on hold in 2011 whilst the British Bankers Association’s ultimately unsuccessful High Court challenge to new Financial Services Authority measures was ongoing, the authority said today.
This was despite the FSA making it clear to the industry at the start of 2011 that claims could be progressed normally while the judicial review was in progress.
The FSA’s review of the complaints put on hold found that 100% of the cases could have been progressed.
Tracey McDermott, the FSA’s director of enforcement and financial crime, said: ‘The FSA made it clear that firms must continue to process complaints where possible during the judicial review and we warned that enforcement action could be taken if this was not done.
‘Despite this warning Co-op put in place a policy that was likely to lead to complaints not being dealt with properly during the legal proceedings.
‘While nobody suffered any financial loss, Co-op’s actions meant that a significant number of people had the resolution of their valid complaints delayed for no good reason.’
The BBA’s legal challenge against new complaint-handling measures was dismissed by the High Court in April 2011. The rules were intended to trigger improvements in the way customers were treated when complaining.
Between the new measures being introduced and October 2012, £7.5bn was paid out in redress by financial institutions for mis-sold PPI.
Comments
ABS mal
On 28 March 2012 the Gazette reported as follows:
John Wotton, president of the Law Society, said: 'The Co-operative Group is a well-known brand on the high street, with a substantial profile and a strong reputation for ethical business.
'I’d like to welcome Co-operative Legal Services into the Law Society fold..."
Please could someone remind me who owns Co-operative Legal Services?
Brand
This cross-pollination of bad PR from non-legal to legal services and vice versa, and the internal pressure this creates, is one very good reason for law firms to stay independent!
I find it interesting that
I find it interesting that co-op have been fined for this. Obviously they had a very small proportion of complaints (1,629) compared to others who did just the same thing.
I would expect that if the fines are in anyway linked to the volume of customers who had justice delayed then Lloyds will be looking at a fine in the region of £250million. RBS, Barclays, Bank of America, all of them unlawfully held up complaints between October 2010 and May 2011.
In any event i would expect to see quite a few lenders punished. Co-op have simply been unlucky that they are the first.
Having said that it does amuse that this story lines up nicely with their introduction as an ABS.
The point is that the Co-op
The point is that the Co-op put the complaints on hold-not that there were complaints or the volume of them.
I'm aware of the point. My
I'm aware of the point.
My point was whether or not the size of the fine was linked to the volume of complaints they put on hold. Hence my "justice delayed" comment.
Following on from the recent
Following on from the recent the Co-operative Funeral Services debacle and now the Co-operative Bank I really do think its about time the Co-operative Group stopped "harping" on about its ethical standards and values.