'Britain's most helpful bank' is fined £2.8m over complaints

The state-owned Royal Bank of Scotland was yesterday hit with a £2.8m fine for "multiple failings" in its customer complaints handling.

The Financial Services Authority's investigation into RBS and its NatWest subsidiary – currently advertising itself as "Britain's most helpful bank" – unearthed a decidedly unhelpful picture of the company's operations with more than half of the complaint files it reviewed showing "deficient handling". In total 62 per cent also showed a failure to comply with FSA requirements on timeliness and disclosure of customers' rights of referral to the FSA Ombudsman, and nearly a third "failed to demonstrate fair outcomes for consumers".

The watchdog harshly criticised what it said were delays in responding to customers and poor quality investigations into complaints – with handlers failing to obtain and consider all the appropriate information when making their decisions. It lambasted the poor training received by the handlers and said too many lacked proper "product knowledge" for the complaints they were dealing with.

The FSA further said correspondence from the bank did not fully address concerns raised by customers and failed to explain why complaints had either been upheld or rejected.

The fine could not have come at a worse time for RBS, which is preparing for a fresh storm of controversy over chief executive Stephen Hester's remuneration package. Including the long-term incentive plan – paid in later years for his work in 2010 – Mr Hester could be paid a maximum of £9m for just 12 months' work. Thousands of jobs have been axed since he was called in by the Government to turn around a business that had nearly collapsed during the financial crisis.

Royal Bank of Scotland is now 83 per cent owned by the tax payer, after the injection of £45bn of direct aid. Tax payers have also made available a further £8bn should the economy significantly deteriorate and have provided insurance for £280bn of potentially toxic assets on RBS's books.

Margaret Cole, the FSA's managing director of enforcement and financial crime, said of the company: "We expect firms to treat customers fairly and that consumers can be confident that their complaints will be dealt with properly. The failure of these two high street banks to deal adequately with complaints put consumers at unacceptable risk and the fine of £2.8m reflects this.

"The poor complaints procedure of RBS and NatWest came to light during our review of complaint handling in major banks. The review showed that banks need to make major changes to handle consumer complaints fairly and the FSA will continue to take appropriate action to ensure these changes are put in place."

The watchdog said the fine would have been £4m had RBS not agreed to settle early. As a result of its "thematic review", five banks have undertaken what the FSA described as "significant action" to improve their complaint handling.

Brian Hartzer, chief executive, UK Retail, Wealth and Ulster Bank at RBS, said: "We acknowledge the findings of the FSA investigation. It confirmed shortcomings in our routine complaint handling that we assessed in our own internal review and which we are committed to putting right.

"We recognise the importance of complaint handling for our customers and are focussed on addressing the root causes of complaints. Such is our determination to get this right for our customers that complaint resolution features as one of our customer charter commitments." The company insisted that the complaints covered were "non complex".

Start your day with The Independent, sign up for daily news emails
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Business Development Executive / Sales - OTE £40,000

£18000 - £40000 per annum: Recruitment Genius: This fast growing Insurance Bro...

Guru Careers: Research Associate / Asset Management Research Analyst

£40 - 45k (DOE) + Benefits: Guru Careers: A Research Associate / Research Anal...

Ashdown Group: Finance Accountant - Financial Services - Central London

£30000 - £35000 per annum + benefits : Ashdown Group: Finance Accountant - Fin...

Ashdown Group: Chief Technology Officer (CTO) - Glasgow

£90000 - £98000 per annum + benefits : Ashdown Group: A truly exciting opportu...

Day In a Page

Solved after 200 years: the mysterious deaths of 3,000 soldiers from Napoleon's army

Solved after 200 years

The mysterious deaths of 3,000 soldiers from Napoleon's army
Every regional power has betrayed the Kurds so Turkish bombing is no surprise

Robert Fisk on the Turkey conflict

Every regional power has betrayed the Kurds so Turkish bombing is no surprise
Investigation into wreck of unidentified submarine found off the coast of Sweden

Sunken sub

Investigation underway into wreck of an unidentified submarine found off the coast of Sweden
Instagram and Facebook have 'totally changed' the way people buy clothes

Age of the selfie

Instagram and Facebook have 'totally changed' the way people buy clothes
Not so square: How BBC's Bloomsbury saga is sexing up the period drama

Not so square

How Virginia Woolf saga is sexing up the BBC period drama
Rio Olympics 2016: The seven teenagers still carrying a torch for our Games hopes

Still carrying the torch

The seven teenagers given our Olympic hopes
The West likes to think that 'civilisation' will defeat Isis, but history suggests otherwise

The West likes to think that 'civilisation' will defeat Isis...

...but history suggests otherwise
The bald truth: How one author's thinning hair made him a Wayne Rooney sympathiser

The bald truth

How thinning hair made me a Wayne Rooney sympathiser
Froome wins second Tour de France after triumphant ride into Paris with Team Sky

Tour de France 2015

Froome rides into Paris to win historic second Tour
Fifteen years ago, Concorde crashed, and a dream died. Today, the desire to travel faster than the speed of sound is growing once again

A new beginning for supersonic flight?

Concorde's successors are in the works 15 years on from the Paris crash
I would never quit Labour, says Liz Kendall

I would never quit party, says Liz Kendall

Latest on the Labour leadership contest
Froome seals second Tour de France victory

Never mind Pinot, it’s bubbly for Froome

Second Tour de France victory all but sealed
Oh really? How the 'lowest form of wit' makes people brighter and more creative

The uses of sarcasm

'Lowest form of wit' actually makes people brighter and more creative
A magazine editor with no vanity, and lots of flair

No vanity, but lots of flair

A tribute to the magazine editor Ingrid Sischy
Foraging: How the British rediscovered their taste for chasing after wild food

In praise of foraging

How the British rediscovered their taste for wild food