The Financial Conduct Authority today handed out a record £20.7m fine to Clydesdale Bank PLC for serious failings in its processes for handling payment protection insurance complaints.
The FCA said the fine, which related to complaint responses over more than two years up to July 2013, is the largest ever imposed in relation to PPI.
Between May 2012 and June 2013, the FCA said Clydesdale, which operates both the Clydesdale Bank and Yorkshire Bank brands, provided false information to the Financial Ombudsman Service in response to requests for evidence of the records the bank held on policies sold to individual customers.
Documents were altered in a small number of cases to make it look as if Clydesdale held no relevant papers and staff deleted all PPI information from a separate print-out listing the products sold.
These practices were not known to or authorised by the bank’s PPI leadership team or more senior management.
The FCA said of the 126,000 PPI complaints decided between May 2011 and July 2013, up to 42,200 may have been rejected unfairly and up to 50,900 may have resulted in inadequate redress.
Georgina Philippou, acting director of enforcement and market oversight at the FCA said Clydesdale’s failings were ‘unacceptable’ and fell well below expected standards.
‘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.’
Clydesdale has said it will review all PPI complaints handled prior to August 2014 and offer redress to any customers impacted.
The bank agreed to settle at an early stage of the FCA’s investigation and therefore qualified for a 30% stage 1 discount. Were it not for this the FCA would have imposed a financial penalty of almost £30m.