Co-op bank fined for mishandling PPI claims
The Financial Services Authority (FSA) has fined the Co-op bank for failing to handle complaints about the Payment Protection Insurance (PPI).
The Financial Services Authority (FSA) has fined the Co-op bank for failing to handle complaints about the Payment Protection Insurance (PPI).
The bank will be forced cough up £113,300 after it was accused of unfairly putting on hold 1,629 complaints in the first half of 2011 while the banking industry was in the High Court challenging the FSA's new rules.
The FSA's rules were designed to ensure PPI complaints were dealt with fairly.
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The Co-op admitted it had put complaints to one side until the court case was lost.
"In this instance, our procedures have fallen short of the high standards rightly expected of us," a spokeswoman said, according to BBC News.
"We accept that there was an unnecessary delay created for some of our customers, including the small sample of cases reviewed by the FSA.
"We have co-operated with the FSA throughout their investigation and we are confident that this would not occur again if similar circumstances were to arise."
The FSA had pressed firms to continue processing complaints during the judicial review, warning legal action would be taken if they failed to comply.
However that didn't stop the bank from delaying complaints during legal proceedings.
"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.
A number of other banks which used the same practice are expected to get hit with a similar fine.
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