FSA fines The Co-operative Bank plc for failing to handle PPI complaints fairly

08 Jan 2013

The FSA has fined The Co-operative Bank plc (Co-op) £113,300 (including a 30 per cent discount) for failing to handle payment protection insurance (PPI) complaints fairly in breach of Principle 6 of the FSA’s Principles for Businesses and Rules in the Dispute Resolution: Complaints Sourcebook.

Between 21 January 2011 and 9 May 2011 the FSA found that it was likely that Co-op had unfairly put on hold a significant proportion of 1,629 complaints, when in fact the FSA had made it clear that most PPI complaints could progress as normal while the British Bankers’ Association challenge by way of judicial review over the FSA’s proposed PPI complaint handling measures was progressing. The FSA sent a letter on 21 January 2011 to various trade associations (which was also published on the FSA website at the same time) stating that the FSA expected firms to continue dealing with PPI complaints notwithstanding the judicial review, outlined which type of complaints could be progressed and warned that enforcement action could be taken if this was not done. The FSA’s own review of a sample of the PPI complaints that Co-op had put on hold revealed that 100 per cent of the cases examined could have progressed.

The FSA recognised that Co-op has cooperated with the FSA in relation to this matter and in order to address the undue delay in resolution of the complaints, interest was paid to consumers in a manner which Co-op considered to be in line with FSA guidance.

Copies of the final notice http://www.fsa.gov.uk/static/pubs/final/co-op.pdf and related press release http://www.fsa.gov.uk/library/communication/pr/2013/001.shtml are available