Fines imposed on members of the financial industry such as Banks or Brokers – Some consumers are surprised when you mention fines! Why Should they be surprised?
This article is not one for light evening reading it is to advise of some of the fines imposed, the seriousness of the same and the amount of this considerable problem of which the Guardian Newspaper believe that one out of 5 claims only have been made.
In previous blogs I have mentioned the fine to Clydesdale Bank of 20.6 Million. Clydesdale Bank and their sister Bank – Yorkshire Bank were fined for, including providing false information about complaints to the Financial Ombudsman Service, meaning that many of the 126,600 PPI complaints that Clydesdale Bank made a decision on between May 2011 and July 2013 up to 42,200 may have been rejected unfairly.
The Financial Conduct Authority also says that some 50,900 upheld complaints may have resulted in the consumers receiving inadequate redress.
Of considerable concern to the Financial Conduct Authority was that Clydesdale’s failings mainly occurred after April 2011 which was the date when the High Court effectively rules that it was unfair to place cases on hold and providers had to follow a list of rules to proactively find and compensate consumers who were mis-sold.
Lloyds Bank were fined £117 Million in a decision published in June 2015 in respect of their failures between March 2012 and 2013. During that period more than 2.3 Million PPI Policies were considered and 37% of claims were rejected.
Lloyds were hit with fines due to the fact that they had issued guidance to the complaint handlers that the overriding principal when assessing complaints was that Lloyds PPI sales were compliant and robust. This was defined as the overriding principal.
Lloyds did not advise their own complaint handlers of know failings identified by them in their sale process. Many complaint handlers happily followed in this Overriding Principal to unfairly reject the complaints of the consumers.
Here are some of the others:-
- EGG – fined £721,000 in December 2008 for serious failings in its credit card PPI sales by telephone between January 2005 and December 2007. The FSA found failings in approximately 40% of telephone sales of credit card PPI made by EGG in a 2 year period. When customers said on the phone they did not wish PPI the Firm directed its sale staff to use techniques to persuade the customers to take the Insurance called “objected handling”. These techniques included over-emphasising the positive feature of the PPI or telling the customer they could take the PPI for a free period and cancel it later if they didn’t want it. In some cases, even when the customer did not consent, PPI was applied to their credit card anyway.
- Alliance & Leicester (Santander) were given fines of £7 Million in October 2008 for serious failings in its PPI telephone sales between January 2005 and December 2008. Alliance & Leicester (Santander) did not make it sufficiently clear that PPI was optional and it trained its staff to put pressure on customers where they queried the inclusion of PPI in their quotation or challenged Advisors recommendations.
- 5 Motor Retailers: GK Capitals Group Limited; George White Motors Limited; Ringways Garages (Leeds) Limited; Ringways Garages (Doncaster) Limited and Parks of Hamilton (Holdings) Limited – Fined £175,000 in August 2008 for exposing 2,175 customers to the risk of being sold unsuitable PPI Policies.
- Liverpool Victoria fined £840,000 for serious failings in the sale of single premium PPI by telephone.
- Land of Leather fined £210,000 for not having effective monitoring or training of PPI sales. In addition, their Chief Executive was fined £14,000 for failing to properly oversee the sale of PPI by the Firm.
- HFC Bank (also trading as Household Bank) and Beneficial Finance fined £1.085 Million for putting customers at an unacceptable risk of being sold an unacceptable Policy.
- Black & White Group Limited (now in Liquidation). This would have led to a fine of £2.2 Million.
- Regency Mortgage – fines of around £56,000
- Loans.co.uk – fined £455,000
- Redcats (Brands) Limited – fined £270,000
- GE Capital Bank – fined £610,000
- Hadenglen Financial plc – fined £133,000 and their Chief Executive was fined £49,000
- Swinton Group – fined £770,000
- CT Capital Limited (CT Capital) – fined in 2000 – £360,900 (in the case of CT Capital between May 2011 and November 2013 dealt with some 6,669 PPI complaints). CT Capital failed to put in place complaint handling processes to deal with PPI complaints appropriately which resulted in consumers missing out on redress payments to which they were entitled. The effect on individual consumers was potentially significant. The average redress payment made in respect of a fully upheld complaint during that period was £5,959. It appears that despite being aware that specific provisions governed 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. Even after that time CT operated flawed Policies.
Clydesdale Bank – fined £20,678,300 for serious failings in its PPI handling. In the Clydesdale’s case the Judicial Review decision in April 2011 they implemented in mid-2011 inappropriate policies to deal with complaints. In effect its complaint handlers were not taking into account all relevant documents when deciding how to deal with complaints. In addition, between May 2012 and June 2013 Clydesdale provided false information to the Financial Conduct Service in response to requests for evidence of the records Clydesdale held on PPI Policies sold to individual consumers. 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 documentation and deleted all PPI information from a separate print out listing the products sold to the consumers. These practises were not know to or authorised by Clydesdale PPI Leadership Team or more senior management.