Things have been pretty quiet on the banking fines front recently, after a flurry of penalties for Libor manipulation, forex rigging and PPI mis-selling last year. But today the FCA spectacularly reminded the world of its existence by fining Clydesdale Bank £20.7m, the biggest ever penalty meted out for PPI-related misdeeds.
The regulator said Clydesdale, which also runs Yorkshire Bank, gave false information to the Financial Ombudsman Service after being asked for evidence of its records of PPI policies sold to individual customers.
A team of Clydesdale staff altered some printouts to make it look as if the bank had no relevant information and deleted all PPI info from another printout which listed the products sold to a customer, the FCA said, though it added senior management didn't know what was going on.
The conduct meant as many as 42,200 claims for PPI from Clydesdale may have been rejected unfairly, and 50,900 customers who were successful may not have got enough compo.
‘The fact that Clydesdale misled the Financial Ombudsman by providing false information about the information it held is particularly serious and this is reflected in the size of the fine.’ said Georgina Philippou, the FCA’s acting director of enforcement and market oversight. ‘In ignoring documents it held which were relevant to its customers’ complaints, Clydesdale failed to treat its customers fairly.’
'We deeply regret any instance which led to the Financial Ombudsman Service receiving incorrect or incomplete information from us,' said the bank's acting chief exec Debbie Crosbie. 'These practices were not authorised or condoned by the Banks. As soon as this issue was discovered, we took immediate steps to stop it; we made the regulator aware and rapidly introduced strict new monitoring procedures to prevent any recurrence.'
The fine is a blow to the bank’s reputation just months before it is expected to float on the stock exchange. Clydesdale has been eyeing an IPO since its owner, the National Australian Bank, announced it wanted to get out of the UK market back in October.