The Co-operative Bank Plc, a customer-owned lender, was fined 113,000 pounds ($181,300) by U.K. financial regulators over delays in handling complaints about sales of payment-protection insurance.
The Co-Operative, based in Manchester, treated customers unfairly when they complained about so-called PPI during a period in 2011 when guidelines for handling such grievances were being challenged in court, the Financial Services Authority said today in a statement.
“While nobody suffered any financial loss, Co-op’s actions meant that a significant number of people had the resolution of their valid complaints delayed for no good reason,” Tracey McDermott, the FSA’s director of enforcement and financial crime, said in the statement.
By last October, U.K. banks had already reserved more than 9 billion pounds to compensate clients who were forced to buy, or didn’t know they had bought PPI to cover repayments on mortgages, credit and other loans. Martin Wheatley, the U.K.’s chief markets regulator, said about 95 percent of PPI policies were sold inappropriately.
The bank, a unit of the Co-Operative Group Ltd., which also runs grocery stores, received a 30 percent discount for settling the PPI dispute at an early stage, the FSA said.
The Co-Operative “put some complaints on hold which were capable of being progressed without waiting for the judicial review to be concluded,” the bank said today in an e-mailed statement. “In this instance our procedures have fallen short of the high standards rightly expected of us.”
From January to May 2011, the Co-Operative delayed a “significant proportion” of 1,629 complaints based on the incorrect decision that they couldn’t be determined until a trade group’s court challenge was resolved.
“The FSA’s own review of a sample of the complaints put on hold revealed that 100 percent of the cases examined could have been progressed,” the regulator said in the statement.
To contact the reporter on this story: Erik Larson in London at firstname.lastname@example.org
To contact the editor responsible for this story: Anthony Aarons at email@example.com