Clydesdale fined £20.7m for ‘serious’ PPI failings

CLYDESDALE Bank has issued an apology after being fined a record £20.7 million by the City watchdog for “serious failings” in the way it handled complaints over mis-sold payment protection insurance (PPI).

Picture: Ian Georgeson

Debbie Crosbie, acting chief executive of the Glasgow-based lender, said “appropriate disciplinary action” had been taken as a result of the scandal, which affected thousands of customers, but refused to say whether anyone had been sacked.

The Financial Conduct Authority (FCA) said that, in mid-2011, Clydesdale – which also owns Yorkshire Bank – implemented “inappropriate policies” that meant its PPI complaint handlers were not taking into account all relevant documents when deciding how to deal with complaints.

Staff failed to search for documents if they fell outside a seven-year timeframe, even if they were still readily available, the regulator said.

In addition, between May 2012 and June 2013, Clydesdale provided false information to the Financial Ombudsman Service (FOS) in response to requests for evidence of records held on PPI policies.

A team within Clydesdale’s PPI complaint-handling operation altered a small number of printouts to make it look as if the lender held no relevant documents and deleted all PPI information from a separate print-out listing the products sold to the customer.

Ms Crosbie told The Scotsman: “This misinformation issue wasn’t known to any member of the management team – as soon as it did come to light we were in touch with the regulator. People can be confident that we will be putting it right.

“Anybody who’s affected by this issue should know that I am sorry for that. We’ve done an extensive review of what went wrong.”

Ms Crosbie insisted that only a small number of employees within one PPI complaint-handling team had provided false information to the FOS, an independent body that examines customers’ concerns if they are not happy with they way they have been treated by banks.

“To date, we can only find two examples of misinformation [to the FOS],” she added.

The FCA said that, 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.

The £20.7m fine is the largest ever imposed by the FCA for failings relating to PPI and Georgina Philippou, acting director of enforcement and market oversight at the watchdog, 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. Clydesdale failed to treat its customers fairly.”