RBS rapped by watchdog over PPI failures

RBS failed to provide reminders to almost 11,000 of its customers for up to six years, the CMA noted. Picture: AFP
RBS failed to provide reminders to almost 11,000 of its customers for up to six years, the CMA noted. Picture: AFP
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Royal Bank of Scotland has been rapped over the knuckles by the competition watchdog over its handling of payment protection insurance (PPI) compensation.

The Competition and Markets Authority (CMA) has ordered RBS and fellow high street lender Santander to appoint auditors to check how they remind customers who have PPI amid a mis-selling scandal over the policies.

The banks failed to adequately remind customers about their PPI, some of whom might be due compensation as a result of the scandal, in which more than £36 billion has been paid back to those impacted.

RBS failed to provide reminders to almost 11,000 of its customers for up to six years, the CMA noted. It means that those affected were unable to fully assess whether they wanted to continue paying for PPI, and were stopped from shopping around effectively. Many customers may not have even been aware they still had PPI, the watchdog added.

It is not the first time RBS and Santander have breached the order, with both banks being warned by the CMA to improve their PPI practices in 2016.

Adam Land, the CMA's senior director of remedies, business and financial analysis, said: "It is unacceptable that some banks aren't providing PPI reminders - or are sending inaccurate ones - eight years after our order came into force.

"The legally binding directions we've issued today will make sure that both RBS and Santander now play by the rules.

"These are serious issues that, in the future, may result in fines if the government gives us the powers we've asked for.

"For now, we expect RBS to repay all affected customers quickly, and for both RBS and Santander to make sure that similar breaches do not happen again."