The UK Financial Services Authority (FSA) has imposed a monetary penalty of £113,300 against The Co-operative Bank (Co-op) for failing to fairly handle payment protection insurance (PPI) complaints.
During the British Bankers Association’s (BBA) unsuccessful High Court challenge of new FSA measures, which was designed to ensure that all PPI complainants are treated fairly, the accused wrongly kept PPI complaints pending that were suitable of being progressed.
The UK market watchdog claimed that the bank put many complaints on hold, despite the FSA’s letter dated 21 January 2011 that dictated the types of cases that should be processed while the judicial review was in progress.
The market regulator found that during 21 January 2011 and 9 May 2011, the bank unfairly kept pending a significant proportion of 1,629 complaints, citing that the judicial review is underway.
During its own course of sample review of complaints, the FSA revealed that 100% of the cases examined could have been progressed.
FSA director of enforcement and financial crime Tracey McDermott 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," McDermott added.