The Financial Conduct Authority has fined Clydesdale Bank £20.7million for “serious failings” in its PPI complaint handling procedures.
The fine is the largest ever imposed by the FCA for matters relating to PPI.
Between May 2011 and June 2013, the bank decided on 126,600 PPI complaints. The FCA says that, as a result of Clydesdale’s conduct, up to 42,000 may have been rejected unfairly and up to 50,900 upheld complaints may have resulted in “inadequate redress” for customers.
The watchdog says that 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 2013 and June 2013, the bank provided false information to the Financial Ombudsman Service after it requested evidence of Clydesdale’s records regarding sold PPI policies.
The FCA says a team within the bank’s PPI complaint handling operation “altered certain system print outs… to make it look as it Clydesdale held no relevant documents and deleted all PPI information from a separate print out listing the products sold to the customer.”
It also notes that the practices were not known to or authorised by the bank’s PPI leadership team or any members of 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.”
The FCA also says that as Clydesdale agreed to settle at an early stage of the investigation, it qualified for a 30% discount on the fine. If it had not settled, the financial penalty would have totalled £29,540,500.
Debbie Crosbie, Acting chief executive of Clydesdale and Yorkshire Banks, said: “In 2011 we introduced changes to our policies and procedures that were designed to help us respond to PPI complaints.
“A number of these changes were inappropriate and have disadvantaged some of our customers. We got this wrong and I am sorry for that.
“We deeply regret any instance which led to the Financial Ombudsman Service receiving incorrect or incomplete information from us.
“These practices were not authorised or condoned by the Banks. As soon as this issue was discovered, we took immediate steps to stop it; we made the regulator aware and rapidly introduced strict new monitoring procedures to prevent any recurrence.”