FSA fines Co-op £113,000 over complaints handling
Bank lacked adequate systems to identify PPI complaints which could be progressed and thus failed to treat customers fairly.
The Financial Services Authority has fined Co-operative Bank £113,300 for failing in its handling of payment protection insurance mis-selling complaints.
According to the FSA, Co-op failed to pay due regard to the interest of its customers and treat them fairly.
In 2010, the British Bankers’ Association and Nemo Personal Finance Ltd launched a judicial review challenging an FSA policy statement on PPI complaints handling. During the period that the review was being heard the Co-op failed to adhere to FSA guidance on handling complaints, despite a letter from the regulator which explicitly stated that firms adhere to the disputed policy while the JR was ongoing.
The BBA subsequently dropped the JR, confirming in May 2011 that it would not appeal the high court decision to deny legal challenge of the FSA’s PPI redress rules.
However, the FSA said Co-op failed to make the relevant changes in light of the FSA letter.
In a final notice to the bank, the FSA said: “Co-op’s process for dealing with PPI complaints during the JR was inadequate and was likely to lead to a failure to identify complaints capable of being progressed during that period.”
The regulator said Co-op’s process would have delayed rather than denied consumers redress, and did not point ot widespread problems or weaknesses in the bank. Also, the regulator acknowledged that no consumers suffered financial loss as a result.
Because the bank agreed to settle with the regulator early on, it qualified for a 30 per cent discount on the fine, which would have otherwise been £161,910.