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FSA fines Co-op Bank £113k over PPI complaints handling

by Jun Merrett on Jan 04, 2013 at 11:03

FSA fines Co-op Bank £113k over PPI complaints handling

The Financial Services Authority (FSA) has fined The Co-operative Bank £113,300 for its failure to handle payment protection insurance (PPI) complaints fairly.

The FSA said the Co-op unfairly put on hold a 'significant proportion' of 1,629 PPI complaints between 21 January 2011 and 9 May 2011, the period of time the British Bankers Association's ran unsuccessful High Court actions against new measures from the regulator on PPI complaints.

The FSA said the Co-op had incorrectly decided the complaints could not be determined until the outcome of the final decision was revealed and that its own sample of complaints put on hold showed that all should have been progressed.

The regulator said it had made clear in January 2011 that many claims could be progressed normally while the case was in progress and set out the types of cases that should be progressed. A letter from the FSA also warned of enforcement action on firms that failed to treat PPI complaints fairly.

Tracey McDermott (pictured), director of enforcement and financial crime at the FSA said: 'The FSA made it clear that firms must continue to process complaints where possible during the judicial review and we warned that enforcement action could be taken if this was not done.

‘Despite this warning Co-op put in place a policy that was likely to lead to complaints not being dealt with properly during the legal proceedings.

'While nobody suffered any financial loss, the Co-op’s actions meant that a significant number of people had the resolution of their valid complaints delayed for no good reason. We will continue to take action where we find PPI customers have not been treated fairly.'

1 comment so far. Why not have your say?

Ian Lees

Jan 06, 2013 at 11:52

How interesting that the Co Op who are puchasing Edinburgh based TSB Bank branches and customers - should be fined for misselling PPI insurance - and fined for failing to apply any proper process - to deal with their complaints. Still as they advertise the Co Op is " good with food ", but not so hot on keeping accurate records and negligent when getting complaints, and so many regulatory failures. It would be interesting to see how much time Tracey McDermot and her team at the FSA has spent i.e man hours and financial cost - to the regulator - which is added to FSA fees for those remaining in the financial services. In my opinion any proper business wil be able to record their time spent and costs associated with the Co Op bank strategies of defying their regulator - destroying trust and terminating customer confidence - and should be charged accordingly.

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