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FCA fines Clydesdale Bank £20.6m over PPI complaint handling

The FCA has fined Clydesdale Bank £20.6m over serious failings in the way it handled payment protection insurance complaints.

This is the largest ever fine imposed by the FCA for PPI-related failings.

The FCA says 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.

Between May 2012 and June 2013, Clydesdale also provided false information to the Financial Ombudsman Service in response to requests for evidence of the records the bank held on PPI policies sold to individual customers. 

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

These practices were not known to or authorised by Clydesdale’s PPI leadership team or more senior management.

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. Up to 50,900 upheld complaints may have resulted in inadequate redress for customers.

FCA acting director of enforcement and market oversight Georgina Philippou says: “Clydesdale’s failings were unacceptable and fell well below the standard the FCA expects. The fact that Clydesdale misled the FOS 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 missold PPI.  In ignoring documents it held which were relevant to its customers’ complaints, Clydesdale failed to treat its customers fairly.”

Clydesdale’s policies meant that, for PPI complaints about loans and mortgages which had been repaid more than seven years prior to the date of the complaint, its complaint handlers would not search for any documents on the basis that they fell outside Clydesdale’s seven-year document retention period.

However, in some cases relevant documents were still readily available.

When calculating redress for credit card PPI complaints, handlers ignored those credit card statements that Clydesdale held for the period before the year 2000.

The FCA also found that complaint handlers were failing to identify cases where the PPI policy sold was unsuitable for the customer, and found deficiencies in the training and monitoring of complaint handlers.

Clydesdale will review all PPI complaints handled prior to August 2014 and offer redress to any customers impacted by the failings.

Clydesdale agreed to settle at an early stage of the investigation and therefore qualified for at 30 per cent discount. Had it not done so, the FCA would have imposed a fine of £29.5m.

Clydesdale and Yorkshire Banks acting chief executive Debbie Crosbie says: “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 FOS 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 made the regulator aware and rapidly introduced strict new monitoring procedures to prevent any recurrence.”



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There are 5 comments at the moment, we would love to hear your opinion too.

  1. Another day, another bank failure.

    “Between May 2012 and June 2013, Clydesdale also provided false information to the Financial Ombudsman Service in response to requests for evidence of the records the bank held on PPI policies sold to individual customers.”

    “These practices were not known to or authorised by Clydesdale’s PPI leadership team or more senior management.”

    Why would anyone outside of these teams or senior management take it upon themselves to falsify information they provided the FCA? Something isn’t right here.

    And to think how much time and effort went into bringing small companies and IFA’s into line when all the while the regulatory focus should have been on the areas of major concern and complaints. The Banks.

  2. Alasdair Sampson 14th April 2015 at 11:38 am

    So the leadership and senior management within the Clydesdale Bank claim they didn’t know what its claims assessors were getting up to in dealing with PPI claims?

    One has to wonder if that was stupid ignorance, an attempt at plausible denial or simply wilful ignorance.

    What sort of Bank is it that makes a habit of professing that it did not authorise and being ignorant of the actions of its officers that lead to widespread financial distress to the public?

    I do not undertake PPI claims but I have been dealing with claims under the Bank’s voluntary “support scheme” re the disgraced Arck LLP.

    Arck LLP promoted unregulated overseas property developments. It did so on the back of documentation between it and the Bank in terms of which the Bank was to hold all investors’ money for a specific period and not to release it.

    Yup… guessed it. The money disappeared – all £45m-£60m of it.

    Well, not so much disappeared as allowed by the Bank to be removed from the account contrary to the agreement its manager had bound the Bank to – once the Bank let it go, then the money disappeared.

    Yup… also guessed it. The Bank later claimed that the actions of the manager in entering into that agreement with Arck LLP was not authorised and was not known to the Bank’s leadership and senior management.

    One would be forgiven for asking if there is a pattern developing here. That every time the Bank gets up to something nefarious it’s senior management and leadership stand back when the ordure flies.

    Two separate instances you might say – and, being generous, you may be right.

    However, if this were an IFA he/she would not be given the benefit of the doubt. They would not only be fined but their permission would be cancelled.

    So what is it about Clydesdale Bank? Why are its CF1, CF4 and CF10 officers not in the dock and banned from the financial services industry.

    If a broker can lose his livelihood for cheating on a few train fares for a couple of thousand why aren’t the Chief Executive of Clydesdale and its CF10 reduced to selling newspapers.

    But I do the news media a disservice – even they have certain moral standards.

  3. Another Bank another Fine – or as some might say – Protection Money to stay in business and cheap their customers ? No issues for the Directors or the CEO or The Chairman ! Why Not ? Why are Bankers livelihoods not at risk ? Why are their salaries not forfeited Why do they NOT HAVE TO PERSONALLY CONTRIBTE TO THEIR financial failures – their Gross Negligence ? Why are their employer pension contributions NOT RECLAIMED ? What level of qualification do you require to be a Banker ? What level of qualification do you need to be a Director of a BANK ? There is clearly NO RISK attached to being a dodgy director capable of Gross Negligence – these crooks are extracting the Urine ? and the FCA basks in their on going failures . . . . . .perhaps the VICTIMS need to take matters into their own hands . . . . .take responsibility . . . .otherwise you have another BT on your hands ( a Monopoly and the most abysmal service . . .lack of support form Directors and Chairman – and NO BODY CARES . Businesses are being driven out of business by the President of the CBI Sir Michael Rake Chairman of BT . I wonder how much BT contributed to the Con servative Party Funds – to remain a MONOPOLY . . . . to continue with poor service and being unnacountable to OFCOM OFTEL Government . . . .etc.,

  4. George Osborne jumps with joy !!! 20.6 million !!!

    “Come on FCA, that’s my boy, daddy needs new shoes and I might even get new golf clubs”

  5. Dont expect this to be the last!!!

    From day one CMC’s have been SHOUTING how corrupt the banks have been and the only response we have received from the FOS is ‘dont be silly’!

    We have all said that Clydesdale and Yorkshire were inappropriately (wish i could spell the word fraudulantly, but i cant so i wont say that) changing DPA requests (even the ICO have agreed) for many years and have been getting away with it.

    £21million – an absolute windfall for Clydesdale and well worth the gamble. Funny how every other CEO or MD in any other company in other industry would have to know exactly what their staff are doing at all times and would have to accept the consequences, but in the banking industry you can get away with ‘it’s a big company, how am i supposed to know what all my staff are doing?’ – THAT IS YOUR JOB!!!

    The (second) biggest question is when will the FOS get their act together and do something about this? The first, when will the FCA? Banks are too big to fail and certainly too big to pay!

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