CT Capital Ltd has been fined £2.3m by the regulator for serious failings in its historic payment protection insurance (PPI) complaint handling processes.
Customers of the CT Group of lenders and loan brokers missed out on redress payments to which they were entitled, because the firm failed to put in place processes to deal with PPI complaints appropriately, according to a statement by the Financial Conduct Authority.
With the average redress payment made in respect of a fully upheld complaint during the period being £5,959, the impact on individual customers could have been “significant”, the FCA stated.
Between 2005 and 2008, CT Group sold 31,591 regulated PPI policies, receiving approximately £63m net in commission as a result.
CT Capital was responsible for handling 6,669 PPI complaints on behalf of the CT Group between May 2011 and November 2013.
Despite being aware specific provisions governing the handling of PPI complaints had come into force in December 2010, CT Capital failed to put in place processes designed to follow these provisions until November 2011, according to the FCA.
Mark Steward, director of enforcement and market oversight at the regulator, said in a statement firms’ failure to handle complaints appropriately means they risk treating customers unfairly for a second time.
“We remain determined to ensure that firms put right the harm caused by PPI mis-selling and regain the trust of the public. We will continue to monitor how firms are dealing with complaints and will not hesitate to take action where we see firms not complying with their obligations.”
Following feedback from the FCA in 2013, CT Capital revised its complaint handling process and reviewed approximately rejected 4,800 complaints, or complaints where full redress had not been paid.
By January 2016, it had paid approximately £74m (including interest) in redress arising from PPI complaints.
The failings were uncovered as part of a thematic review into the handling of PPI complaints in 2012. CT Capital agreed to settle at an early stage of the FCA’s investigation and therefore qualified for a 20 per cent discount. Were it not for this discount, the firm would have paid nearly £3m in fines.
The latest data showed PPI remained the most complained-about financial product, with Fos still receiving up to 4,000 such cases each week - a total of 188,712 or just over half over the service’s total workload.
Last year, the FCA fined Clydesdale Bank £20.6m and the Lloyds Banking Group £117m for failing to handle PPI complaints fairly, the latter penalty being the largest ever retail fine.
Having dragged on for years, in November the regulator stated its intention to introduce a deadline for PPI complaints.
peter.walker@ft.com
