PressPort logo

Bank Bosses to Face Questions on PPI, Co-op Fined Over Claim Delays

Press release January 10, 2013 Business

Bank deliberately stalled claims

Banking bosses are set to be held publicly accountable for the first time over the PPI claims scandal.

Sky News reports that some of the UK’s biggest banks have been asked to provide a list of names of executives with direct involvement in the mis-selling of payment protection insurance, to appear before the Parliamentary Commission on Banking Standards (PCBS).

The banks have been told the lists should include the names of former executives, even if they left the company years ago.

Before witnesses from the banks appear, the PCBS, headed by Conservative MP Andrew Tyrie,  is due to speak to consumer groups to get their views of the PPI scandal and hear the experiences of those who were victims of the mis-selling.

Meanwhile, the Co-op bank has been fined £113,000 for stalling over PPI claims. The Financial Services Authority (FSA) has imposed the fine after the Co-op was found to have delayed 1,629 complaints during the first half of 2011, while the banking industry was unsuccessfully challenging new PPI regulations in the High Court.

Tracey McDermott, the FSA’s director of enforcement and financial crime, 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.”

More banks could be in line for similar punishments, though the FSA has refused to comment on any future action.

A Co-op spokeswoman has admitted the bank made mistakes. She said: “In this instance, our procedures have fallen short of the high standards rightly expected of us.

“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 banks have set aside more than £12 billion to deal with the growing numbers of PPI claims. Consumer Finance Claims deals many types of financial claim and specialises in no-win, no-fee PPI cases, with an average claim value of £4,000.