Clydesdale Bank fined £20.7m for PPI failingsLargest ever fine imposed by the FCA for failings relating to PPI

14 April 2015


Clydesdale Bank has been fined a record £20.7m by the banking regulator for serious failings in its handling of Payment Protection Insurance (PPI) claims. 

The failings also relate to Yorkshire Bank, which is a sister business of Clydesdale. 

The Financial Conduct Authority (FCA) found that in mid-2011 Clydesdale Bank implemented inappropriate policies.

This meant its PPI complaint handlers were not taking into account all relevant documents when deciding how to deal with complaints.

The banks are now reviewing all PPI complaints handled prior to August 2014 and are offering redress to any customers impacted by rejected or paid claims made between May 2011 and July 2013. 

If you think you may have been affected you don't need to take any action – Clydesdale will be contacting all affected customers in due course.

Have you been mis-sold PPI? You can claim for free using our PPI claim tool.

PPI fine should be a warning shot

Which? executive director Richard Lloyd said: 'These failings add insult to injury for customers who have already been ripped off once. 

'It's been clear for years that banks should be doing more to resolve the mistakes they’ve made and this fine should be a warning shot for others who still aren’t treating customers fairly. 

'The regulator must force banks to change their culture so that nothing like this ever happens again.'

False information 

In addition, between May 2012 and June 2013, Clydesdale Bank provided false information to the Financial Ombudsman Service (FOS) in response to requests for evidence of the records it held on PPI policies sold to individual customers.  

A team within Clydesdale’s PPI complaint handling operation altered certain system print outs to make it look as if Clydesdale held no relevant documents and deleted all PPI information from a separate print out listing the products sold to the customer.  

These practices were not known to, or authorised by, Clydesdale’s PPI leadership team or more senior management.

Georgina Philippou, acting director of enforcement and market oversight at the FCA said: ‘Clydesdale’s failings were unacceptable and fell well below the standard the FCA expects.  

'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.'

More than 90,000 PPI claims affected

Of the 126,600 PPI complaints decided by the banks between May 2011 and July 2013, 42,000 may have been rejected unfairly and just over 50,000 upheld complaints may have resulted in inadequate redress for customers.

Clydesdale's acting chief executive Debbie Crosbie said: 'In 2011 we introduced changes to our policies and procedures that were designed to help us respond to PPI complaints.

'A number of these changes were inappropriate and have disadvantaged some of our customers. We got this wrong and I am sorry for that.

'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.'

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