The FSA (Financial Services Authority) has fined the Co-op bank for a sum of £113,300 for failing to settle growing PPI complaints.
By putting 1,629 PPI complaints on the back burner in 2011, while disputing the Financial Services Authority’s new rules at the High Court, the Co-op bank has earned itself public wrath and a fat fine.
Writing to the Building Societies Association and the British Bankers’ Association in the first month of 2011, the FSA stated: “We will take tough action against any firm which cannot demonstrate it is delivering fair outcomes for consumers, including because the firm is inappropriately relying on [part of the FSA's complaints rules] to defer consideration of those PPI complaints that could and should be progressed during the judicial review.”
The FSA’s strict action comes as a relief to thousands of PPI victims, several of whom have been waiting anxiously for justice over the past few years.
Receiving flak for practices that many have found to be misleading and unethical, the Co-op bank is just one among many others to have duped the public into applying for PPI loans. Several other banks in the United Kingdom are expected to be similarly disciplined. With public anger rising to a boiling point, banks have already set aside £12bn to settle the colossal bill.
Speaking on the issue, FSA’s Enforcement and Financial Crime Director Tracey McDermott stated: “While nobody suffered any financial loss, Co-op’s actions meant that a significant number of people had the resolution of their valid complaints delayed for no good reason,”
Admitting to the mistakes it had committed, a Co-op spokeswoman had this to say – “In this instance, our procedures have fallen short of the high standards rightly expected of us,”
“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,” she concluded.